Virgin Orbit at Nasdaq
Virgin Orbit executives celebrated going public with an "opening bell" ceremony at Nasdaq headquarters Jan. 7, but the company's stock has gone up and down since trading started in late December. Credit: Virgin Orbit

ORLANDO, Fla. — After a year that saw the rise and potential fall of one tool for space companies to raise money, executives and investors have varying degrees of optimism about the state of the industry heading into 2022.

The last year was marked by a series of deals involving special-purpose acquisition corporations, or SPACs, merging with space companies. These mergers allowed space companies to raised hundreds of millions of dollars and go public, and was part of a larger surge in SPAC deals across the market.

However, by late last year interest in SPAC deals, both in space and market-wide, was waning. A high rate of redemptions, where shareholders in a SPAC get their money refunded rather than hold stock in the merged company, reduced the proceeds for some companies. Share prices of many companies that went public via SPACs fell significantly.

During a panel discussion at the SpaceCom conference here Jan. 11, Eric Stallmer, executive vice president for government affairs and public policy at Voyager Space, offered a cautionary note. “There’s a lot of potential pitfalls for moving forward, especially with the kind of investment that’s going into these companies,” he said.

He noted that he took some of his own money and bought stock in space companies that recently went public. “I called it my fun account,” he said. “Well, that money is not fun any more. There’s nothing fun about that account. I think I’m down about 50%.”

“As we move forward, we need to look at a lot of the reasons why these companies are down from their IPOs,” he said. “What are the concerns that investors have?”

The most recent space company to go public via a SPAC deal, Virgin Orbit, saw its shares fall in its first week of trading, only to rebound. But on Jan. 14, the day after the company performed its third successful orbital flight, shares fell by more than 9%.

That volatility, one executive suggests, may be due to a lack of education among investors in the industry. “We know its ins and outs, but the general public does not, especially on the public markets,” said Janice Starzyk, vice president of government operations at Virgin Orbit, on the panel. “This is a very volatile business, so it’s not something that is used to being seen on public markets. We have a tough job telling the story about it.”

However, a panelist involved with early-stage companies was far more upbeat about the industry. “I usually come across as extremely guarded, but I am very optimistic about this space,” said Benjamin Patz, managing partner of Deepwork Capital.

Patz said he shared the concerns about space companies going public via SPACs, but saw long-term potential for the industry, particularly as the cost of space access drops. “Because of that fundamental enabling of access, the number of opportunities to get into space just mushrooms,” he said.

That could lead, he argued, for exponential growth for the industry. “Why am I grossly optimistic? It’s because of an exponential growth of assets in space that that’s going to produce an exponential increase in data,” he said. “If I’m early enough on an exponential curve, I’m going to get quite a return on the back end.”

“There’s a lot to be excited for, but I think you’ve got to be very prudent as we move forward with a lot of these investments,” Stallmer said. “There’s a historic amount of money out there. I would like to see that money stay in the commercial space market.”

Jeff Foust writes about space policy, commercial space, and related topics for SpaceNews. He earned a Ph.D. in planetary sciences from the Massachusetts Institute of Technology and a bachelor’s degree with honors in geophysics and planetary science...