Space SPACs in the SPAC Space

Less than a week ago, Virgin Galactic successfully completed its third spaceflight and the first-ever space travel from Spaceport America, NM. The developing business of space flight is literally rocketing forward. The industry includes shipping, retrieving, military, human transportation and recreational travel. But, other than Virgin Galactic, (SpaceX is privately held) how do investors get exposure to the exciting field?

Recently there has been a spate of SPAC acquisitions with companies involved in the space industry. The stocks don’t have a long track record, in fact, many are still on the merger launchpad, but they are all literally shooting for the stars.

SPACs Merging With Space Related Companies

Here are a few examples of companies about to be merge with a SPAC that are capturing people’s attention along with investor’s capital. Rocket maker Astra Space announced on February 2nd their intent to merge with SPAC Holicity (HOL). Astra is the fastest privately-funded company to demonstrate orbital launch capability. In a press release, Holicity announced they expect the merger to close during the second quarter of 2021. Another company, Momentus, builds in-space infrastructure services. Momentus has plans to merge with Stable Road Capital (SRAC). The company has a team of aerospace, propulsion, and robotics engineers. One of its properties is a cost-effective and energy-efficient in-space transport system based on water plasma propulsion. Rocket Lab (RKLB), entered into a definitive agreement to merge with Vector Acquisition (VACQ) in a deal valued at $4.1b. Rocket Lab is based in Long Beach, CA. The company designs and manufactures the electron and neutron launch vehicles and Photon spacecraft platform. Redwire Space is merging with Genesis Park (GNPK) to bring itself public. The deal is expected to close before the end of the second quarter.

Take-Away

A slew of start-up companies have been created with disruptive technologies that could lead the next generation of space travel. New “space stocks” are being brought to market by Special Purpose Acquisition Companies (SPACs). The SPAC method of taking the companies public allows them to avoid the IPO process yet enjoy access to capital and other benefits of being a publicly traded enterprise.

Suggested Reading: