Did the Space SPAC companies go public too soon?
For many companies that are currently in their R&D phase, why do they go public while they're building out their products, awaiting approval from regulators, etc.?

Is it because private investors aren't interested in remaining patient for a bit longer? Or is it because the founders wanted to capitalize on the high valuation that publicly traded startups are reaping?

During the SPAC boom, many space companies from $SPCE $MNTS $ASTR $SATL etc. all went public while being in their pre-revenue phase. All of them are currently generating losses.

The nature of these infant industries is that they need to take their time to develop a working product before they can start generating profits. And most Wall St. investors aren't fond of waiting for profits to come in. They base their decisions on each quarterly earnings release. If milestones are taking longer to reach, these investors lack patience and they'll sell tons of stock at once and depress the company's valuation. Having a lower valuation makes it more expensive to raise capital. And even if that's the cheapest way of raising capital, diluting existing shareholders will create more problems.

With the SPAC bubble, many startups took advantage of the opportunity being presented to them. Because of this, the founders got a huge windfall, the company is under more scrutiny, and the objectives of these companies have changed. The recent stock market sell-off is one reason why many innovative companies like SpaceX and Stripe choose to stay private. They would prefer to see their valuation endure less volatility and work with investors who have more patience for the products and services that the company is developing.

In the meantime, I'll remain skeptical about the many space companies that have gone public. I wish them the best and hope that they can find ways to raise more capital to facilitate their cash burn. If the stock market continues to decline and interest rates continue to surge, the tight credit markets could be a make-or-break moment for these space companies. Since these companies have a high risk of dilution, I see the huge stock market sell-off not providing much of a margin of safety for investors looking to buy the dip on those space companies.
You’re missing $RKLB off your list. Its share price has suffered a similar fate to other space companies but I’ve still got faith because they actually launch rockets into space regularly and more importantly successfully
View 3 more comments
Just finished the Contrarian Investor Virtual Conference No. 7

Two actionable ideas emerged from this:

Jonathan Boyar of Boyar Value Group is long $SMG

Adam Gefvert of White Diamond research is short $MNTS

(The latter is an exclusive idea he shared with us)
Taylor's avatar
$96.8m follower assets
1 of 4
Are SPACs Back? My thoughts on a SPAC Picker’s Market.
Since SPAC sentiment hit it’s peak in February with the announcement of the CCIV and $LCID merger, it has been quite popular for mainstream financial media and financial Twitter alike to bash SPACs, and for good reason. Companies like $NKLA, $RIDE and $MNTS have left a sour taste in the mouth of investors for promising massive growth opportunities and downright lying in same cases. However, just like it has been a stock pickers market for all of 2021, I believe that there are absolutely some diamonds in the rough within the SPAC ecosystem.

Four companies I like moving forward include: $MP (Complete de-SPAC) $LCID (Recently went through PIPE sell off), $ASTR and $RKLB. These companies represent the various stages of a SPAC life cycle and offer very different investing/trading opportunities.

$MP is a rare earth materials mining company located in Las Vegas, Nevada that owns and operates the Mountain Pass Mine, the only currently operation rare earth minerals mine in the Western Hemisphere. MP Materials looks to grow the rare earth materials supply chain and return it to the United States after China has taken over 90% of the worlds supply chain. With the adoption of batteries for electric vehicles, increased use of wind turbines and other applications, look for this $6 billion dollar market cap company continue to make moves to the upside. Current analyst price target average: $45 (32% upside)

$LCID Lucid Motors is most certainly a household name for all investors by this point, engulfing retail traders in excitement and anticipation for the announced merger with CCIV in February, after which coincided with the significant drop we saw at the end of February and into March. Consistently labeled as the $TSLA killer, Lucid has yet to deliver a single car. Rightly so, there are a lot of questions about its high valuation just over $37 billion. While $37 billion is a high valuation for a company with 0 deliveries (this will change in October with the first vehicles slated for delivery), $LCID, like $TSLA, is a technology company. Batteries in development currently have over a 500 mile range and there are talks about licensing and manufacturing these batteries for other legacy automakers looking to get involved in the EV trend. With deliveries incoming, there are many positive catalysts on the calendar over the next few months. Current analyst price target average: $28 (22% upside)

$ASTR is a company I made a post on recently, with its recent earnings report along with its first commercial launch conducted for the DOD and Space Force. While the launch was not a complete success, getting to space is extremely difficult. I believe that the space sector of the market will only continue to grow its important and prevalence in our society. With possible contracts in the pipeline and a successful commercial launch on the horizon this stock has the ability to move. Current analyst price target average: $13 (36% upside - only one analyst initiated coverage)

Lastly, my current personal favorite - $RKLB. The only publicly traded direct competitor to SpaceX, Rocketlab has been named the “highest quality space asset to enter the public market so far.” With a proven track record of successful launches under its belt, $RKLB will look to continue building out its “Satellite-as-a-Service” business model along with its contracts with NASA and other government agencies. Perhaps most exciting is the mission planned to the moon for NASA’s Artemis mission later in 2021. With a rocket in development, the Neutron, a direct competitor to the Falcon 9, a mission to Venus and a mission to Mars, this company is a leader in the space sector. However, the lock up expiration period will end on the 22nd of September, so there may be movement to the downside over the short term. Yet, with missions planned for September 30th and throughout October, I will continue to DCA. Current analyst price target: $24 (37% upside)

Honorable SPAC Mentions:
Commonstock is a social network that amplifies the knowledge of the best investors, verified by actual track records for signal over noise. Community members can link their existing brokerage accounts and share their real time portfolio, performance and trades (by percent only, dollar amounts never shared). Commonstock is not a brokerage, but a social layer on top of existing brokerages helping to create more engaged and informed investors.