SpaceX IPO filing has buoyed space stocks. How should investors play it?
Space stocks are pushing ahead with their recent rally after the Memorial Day break, propelled by enthusiasm surrounding the initial public offering for SpaceX that was filed officially last week, CNBC notes / Photo: Redwire
Space stocks have surged after Elon Musk’s SpaceX officially filed for an IPO last Wednesday. CNBC describes the rally as an “IPO premium” benefiting both SpaceX’s partners and competitors.
Details
SpaceX’s official IPO filing last Wednesday sparked a bull market in aerospace stocks, CNBC noted. CNBC identified 14 companies whose shares reacted most strongly: 12 gained, while two retreated.
Redwire, a spacecraft manufacturer and developer of infrastructure solutions for Mars, surged 49% from last Wednesday through Tuesday. During that period, the company also announced several new contracts. One of them was with the European Space Agency to develop a prototype robotic arm for a lunar lander.
AST SpaceMobile, a developer of a commercial satellite communications network, gained 34% in the period.
Voyager Technologies, which specializes in orbital infrastructure, rose 16%.
MDA Space, a Canadian manufacturer of satellite systems and space robotics listed on the New York Stock Exchange, advanced 11.6%.
Intuitive Machines, which develops lunar rovers, added 3.5%. The stock had been rising through Tuesday but then plunged after NASA excluded the company from the list of firms that will send robotic landers, rovers, and drones to the Moon.
Firefly Aerospace, a developer of launch vehicles and orbital spacecraft, climbed 33.7%. Its stock performance was also affected by NASA’s list – unlike Intuitive Machines, Firefly was selected.
Iridium Communications, the only global mobile satellite communications operator providing 100% Earth coverage, gained 10.8%.
Planet Labs, a supplier of satellite data, rose 13%.
Viasat, a telecommunications corporation, advanced 8%.
Rocket Lab, which specializes in cargo delivery to orbit, gained 6.6%. On Tuesday, the company announced the completion of its acquisition of Motiv Space Systems, which specializes in space robotics.
Gilat Satellite Networks, an Israeli satellite company listed on the Nasdaq, climbed 14%. One day before SpaceX filed for its IPO, on Tuesday, May 19, the company announced that Boeing would install its in-flight connectivity antennas as standard equipment onboard aircraft.
Globalstar, a satellite operator that Amazon is acquiring for $90 per share, rose 1.3%.
NextNav, which develops geolocation systems, fell 0.7%.
EchoStar, a satellite communications operator and SpaceX shareholder, dropped 13.2%.
Opportunities and risks around the SpaceX IPO
The SpaceX IPO could benefit not only the company’s suppliers and partners, but also its competitors, CNBC wrote. Cantor Fitzgerald analysts highlighted two companies worth watching: Rocket Lab and Intuitive Machines.
Truist Securities previously spotlighted Redwire shares. The company had focused exclusively on the space sector, but after acquiring drone specialist Edge Autonomy last year, it has transformed into a diversified provider of next-generation defense technologies, its analysts explained.
CNBC also wrote that AST SpaceMobile and EchoStar shares remain popular among retail investors.
However, investment firm Vanda sees risks for retail traders. “Retail investors appear increasingly focused on ‘picks-and-shovels’ space names rather than direct launch competitors,” the firm said in a research note. The risks involve “smaller and more speculative space names,” including Sidus Space, Satellogic, and Planet Labs.
