WASHINGTON — SatixFy is the latest space firm to face being kicked off a stock exchange after shares plummeted following a merger with a Special Purpose Acquisition Company (SPAC), a fast-track alternative to traditional initial public offerings of stock.
The NYSE American stock exchange has given the Israeli satcom equipment maker until Dec. 30 to submit a plan for meeting conditions for trading on the platform by May 30, 2025.
In a Dec. 1 news release, SatixFy said it ran afoul of listing requirements after its market capitalization — the total value of a company’s stock — recently fell below $50 million.
SatixFy’s shares are currently trading at around 40 cents, down more than 94% from the start of 2023.
The shares were listed in October 2022 after SatixFy merged with a SPAC called Endurance Acquisition Corp., a shell company already trading publicly in search of an investment opportunity, to get more access to capital for expanding its satellite equipment business.
SPAC mergers do not require the intensive due diligence of a traditional IPO process, and many young space companies that recently merged with a SPAC have missed revenue targets as their shares heavily underperform in the market.
Missed guidance
In a March 2022 investor presentation to drum up support for its SPAC merger, SatixFy forecast $40 million in revenue for 2022, rising to $86 million in 2023.
The company ultimately recorded $10.6 million in revenue for 2022 after supply-chain issues across the industry delayed and canceled orders by existing and prospective customers. Management changes following the death of SatixFy’s founder and CEO during 2022 had also impacted growth, the company added.
In earnings results posted a day before announcing the delisting notice, SatixFy said it had made $8.9 million in revenue for the nine months to Sept. 30, 2023, a 31% year-on-year increase.
The company reported a net loss of $28.1 million for the period, compared with a $16.8 million net loss for the same nine months in 2022, mainly because of higher research and development costs.
Even space companies not far off their near-term revenue guidance after merging with a SPAC have seen shares suffer as investor sentiment sours, such as smallsat maker Terran Orbital, which came in just 2% shy of its 2022 target.
The NYSE warned Terran Orbital Oct. 20 it would be booted off the exchange if it did not meet a requirement to have an average closing share price of at least $1 over a calendar month during the next six months. The company’s stock has yet to break this $1 threshold since, as it waits for a mammoth payment from prospective constellation operator Rivada Space.
After facing a potential delisting from Nasdaq because its price had fallen below $1 per share, rocket developer Astra’s backers are working on getting funding together to take the company private.
Regaining compliance
The plan SatixFy must submit to regain compliance will require NYSE American approval, and be subject to periodic reviews by the stock exchange.
According to SatixFy, it is working on a plan partly based on expected commercial and technological progress for its satcoms systems business, driven by chipsets the company develops in-house.
The plan will reflect “potential positive announcements it expects to make in the near-term of new customers and new orders that it believes should evidence that its valuation should be higher,” the company said in the news release.
In August, SatixFy said it was selling a subsidiary that builds antennas and other satellite systems and subsystems to MDA, a Canadian space hardware specialist, to focus on payload chips for the booming low Earth orbit constellation market.
