Fortunes have been decidedly mixed for the space businesses that merged with publicly traded shell companies in search of capital as COVID-19 ravaged the economy.
While merging with a special purpose acquisition company (SPAC) provides a shortcut to the stock market without the rigors of a classic IPO process, post-SPAC space firms are still subject to the intense regulatory and public scrutiny that comes with being publicly traded.
It is probably not too surprising, then, that stock exchanges have served multiple members of the SPAC Class of COVID-19 with delisting warnings over the years, following missed filing deadlines and shares that have fallen too low.
And although there are bright spots in the class, there are those that have been sold on the cheap, taken private, given up on space — and one that went bankrupt and shut down.
Nearly half the class has also announced significant workforce reductions since going public as funds from investors increasingly wary of post-SPAC companies failed to materialize.
Wildly missed revenue projections from most of the class in their eagerness to drum up investor support for their SPAC merger have not helped their reputation. But where do these companies now stand after weathering the pandemic and a few years in the limelight?
Virgin Galactic: Pioneering space tourism
Sir Richard Branson’s suborbital tourism venture is an honorary member of the COVID-19 class. Its shares began trading in October 2019, less than two months before the first COVID infections emerged in Wuhan, China.
The company is credited with opening the floodgates for the space SPAC mergers that surged during the pandemic, largely due to its shares initially soaring on the wave of excitement surrounding the emerging space tourism industry.
While the shares soon got caught up in broader pandemic-induced declines, they hit new highs in early 2021 as investors salivated over prospects for a new major player in commercial spaceflight.
However, regulatory challenges, flight testing delays and other operational setbacks later weighed on the stock.
Virgin Galactic’s shares also recently sank even further following a planned shutdown of commercial operations to focus on heavily investing in a next-generation spaceplane slated to start flying in 2026.
The company plans to ramp up to around 125 spaceflights a year, initially two Delta-class suborbital spaceplanes, each designed to carry six customers paying an average $600,000 each for a ticket.
A total addressable market of 300,000 people worldwide for space tourism is growing 8% every year, according to Virgin Galactic, which recently recorded about 700 customers.
Even still, the company’s delays have boosted Blue Origin and SpaceX as they seek to strengthen their foothold in the emerging space tourism market.
Virgin Galactic’s shares on the New York Stock Exchange (NYSE) are currently trading at around $7, less than half their debut and a long way from more than $62 during the 2021 peak.
Virgin Galactic (SPCE): Best hair (Branson).
Honorary member: Went public just before the pandemic.
Market influence: Opened the floodgates for space SPACs after shares initially soared on space tourism excitement.
Setbacks: Regulatory challenges, flight testing delays and operational setbacks have caused stock declines.
Future plans: Focused on investing in a next-generation spaceplane slated for 2026, initially aiming for around 125 spaceflights per year.
Current status: Shares trading below their debut and far below a 2021 peak.
Virgin Orbit: A brief and tumultuous ride
Small satellite launcher Virgin Orbit joined its older sister on the stock market two years after Virgin Galactic’s debut.
Despite some successful missions for Virgin Orbit’s air-launch system out of California, its shares suffered from an onslaught of technical issues and launch failures that undermined investor confidence in the business.
The most notable setback came in January 2023, when an anomaly prevented LauncherOne from completing the first-ever orbital mission from British soil.
That failure dealt a critical blow to a company that desperately needed to secure new contracts and revenues as financial challenges mounted for its costly operations.
With dwindling cash reserves, mounting debts and an inability to secure new funding, Virgin Orbit soon laid off most of its staff and halted operations.
Then, in April 2023, the company filed for Chapter 11 bankruptcy to mark the end of its brief and tumultuous stint on the stock market.
Virgin Orbit’s factory in Long Beach, California, lives on under fellow classmate Rocket Lab, which, along with others, bought some of the company’s assets during its bankruptcy auction.
Virgin Orbit: Gone but not forgotten.
Enters the fray: Joined the stock market two years after Virgin Galactic.
Challenges: Faced technical issues and launch failures, notably a 2023 launch failure that undermined investor confidence.
End of operations: Filed for bankruptcy in April 2023 and assets auctioned off.
Current status: Out of business.
Momentus: Navigating a rocky start
Momentus had the most difficult start of the socially distanced space stocks, and things have not been smooth sailing for the in-space transportation provider since.
The company was among the first in the class to announce a SPAC merger in a deal that would have initially valued it at $1.2 billion. However, that valuation was soon cut in half as the merger plan was revised following regulatory issues and souring investor sentiment.
Mikhail Kokorich stepped down as CEO in 2021 and sold off his stake in the U.S.-based company, as did fellow Russian co-founder Lev Khasis, as foreign ownership concerns threatened to derail the deal.
Momentus lost opportunities to launch its first Vigoride space tugs as U.S. national security concerns delayed regulatory approvals, and ultimately carried out its first demonstration mission in May 2022.
The seven-year-old space tug provider has only launched three Vigorides to date, most recently in April 2023, and plans for its next mission remain up in the air.
Momentus has also used standard deployers from third parties to place customer satellites in precise orbits after launching together on a shared rocket, but in its latest mission in November, it failed to deploy three of five satellites this way.
Announcing another round of layoffs in early 2024, Momentus said it had decided to postpone Vigoride-7, which had been slated to join SpaceX’s Transporter-10 rideshare mission two months later.
In June, Momentus said it could use Vigoride-7 on a future mission, sell the tug to another company or convert it into a satellite bus as part of a new business line announced last year.
But while the company recently secured loans to support business development efforts, including bidding on government satellite programs, its financial status remains unclear amid delays in submitting regulatory filings covering the first half of 2024.
Still, NASA announced Aug. 22 that it had added Momentus to its Venture-Class Acquisition of Dedicated and Rideshare (VADR) contract, enabling the company to compete for launching what are typically small satellites willing to accept higher levels of risk in exchange for lower launch costs.
Momentus (MNTS): Most changed.
Early struggles: Faced regulatory issues soon after announcing a SPAC merger.
Leadership changes: Co-founders sold their stakes due to foreign ownership concerns.
Operational delays: Slow regulatory approvals led to missed launch opportunities.
Financial uncertainty: Recent financial difficulties and delays in regulatory filings cloud future.
Current status: Added to NASA’s VADR contract but plans for future space tugs are unclear.
Arqit: Pivoted away from space
U.K.-based Arqit entered the public market in September 2021 with a promise to revolutionize cybersecurity using satellites and quantum computing breakthroughs.
The company attracted significant attention for ambitious plans to develop and launch satellites that would distribute quantum encryption keys that not even quantum computers could break.
Less than two years as a public company, Arqit dropped its space plans amid mounting technological and cost challenges.
Instead, Arqit said it could deliver its quantum encryption services more effectively and efficiently through terrestrial networks.
But the company continues to face scrutiny from investors who remain cautious about its ability to deliver on its revised business model.
After initially trading at around $10 when it first went public, Arqit’s share price had fallen to $0.31 by Aug. 29 on the NASDAQ.
Arqit (ARQQ): Most likely to stay grounded.
Market entry: Went public with the promise of quantum encryption through satellites.
Business model shift: Dropped space plans due to technological and cost challenges, focusing instead on terrestrial networks.
Investor concerns: Ongoing scrutiny about the company’s ability to deliver on its new business model.
Current status: Shares have fallen far below $1.
AST SpaceMobile: A turnaround story
AST SpaceMobile is close to closing the chapter on manufacturing and launch setbacks that have delayed its first operational satellites for most of its tenure as a public company.
At of late August, the Texas-based venture had a launch window with SpaceX in the first half of September for launching five BlueBird satellites, built in-house to bring connectivity directly to standard smartphones to help cellular partners combat dead zones.
After doubling in value following their debut on NASDAQ in April 2021 at around $10, AST SpaceMobile’s shares plummeted back to Earth and reached around $2 in April 2024 as delays and a high cash burn rate turned off investors.
But then, in one of the greatest comeback stories for the class, AT&T and Verizon announced they had made small prepayments to use the constellation, which would also use their cellular frequencies to provide nationwide coverage in the United States.
With pandemic-related supply chain issues finally behind the satellite operator, the customer news helped send AST SpaceMobile’s shares rocketing, peaking at around $39 in late August.
While the shares have slightly fallen since, the company’s market cap currently sits among the world’s highest-valued space businesses, though far behind SpaceX.
The company recently took advantage of its soaring stock price to raise capital, enabling it to start producing parts for 17 larger and more powerful broadband satellites.
The first of these Block 2 BlueBirds would be ready to launch in the first three months of 2025, according to AST SpaceMobile CEO Abel Avellan.
A Block 2 BlueBird would be about 223 square meters, compared with a Block 1 BlueBird with solar arrays spanning 64 square meters.
AST SpaceMobile also expects to equip the sixth and follow-on Block 2 BlueBirds with chips developed in-house that would enable 10 gigahertz of processing bandwidth per satellite, ten times the capacity of a Block 1 BlueBird.
Upgraded Block 2 BlueBirds would also support up to 120 megabits per second (Mbps) peak data rates. The company has not disclosed the performance of a Block 2 BlueBird without its custom chipset.
According to AST SpaceMobile, its two-year-old BlueWalker 3 prototype in LEO has achieved more than 21 Mbps download speeds during tests with standard smartphones.
Just five Block 1 BlueBirds is enough to cover the entire United States, but the company has said it needs 45-60 satellites for continuous text, voice, and data coverage in the country.
However, despite fierce lobbying support from AT&T in particular, AST SpaceMobile still faces a many regulatory obstacles before it can start providing even limited services.
The Federal Communications Commission recently gave AST SpaceMobile approval to deploy and operate its first five BlueBirds, but held off deciding on permission to test its services with cellular frequencies in the United States.
The FCC also deferred a decision on AST SpaceMobile’s request to operate an additional 243 satellites for the global coverage it plans to provide via partnerships with cellular partners elsewhere.
Along with direct-to-smartphone competitors SpaceX and Lynk Global, AST SpaceMobile also needs the green light to provide its services on a commercial basis.
AST SpaceMobile (ASTS): Most likely to keep in touch.
Initial challenges: Faced manufacturing and launch setbacks that delayed satellite deployment.
Comeback: Prepayments from customers and an end to supply chain woes have revitalized investor interest.
Current status: Soaring shares helped shift focus on deploying larger and more powerful direct-to-smartphone satellites.
Astra: Exited the public market
High hopes marked Astra’s entry into the public market in July 2021 for its potential to become a low-cost, high-frequency launcher for small satellites.
However, despite successfully reaching orbit with Rocket 3.3 after its third attempt in November 2021, subsequent failures raised concerns about the reliability of Astra’s technology.
Technical challenges, coupled with high cash burn rates and the capital-intensive nature of launch businesses, weighed heavily on Astra’s finances and stock performance.
Astra later pivoted to focus on developing a more reliable version of its rocket, Rocket 4.0, and building a spacecraft engine manufacturing business.
This shift was necessary due to the string of failed launches, but also meant laying off a quarter of its workforce and pausing all rocket launches, further straining investor confidence as Astra struggled to secure new contracts.
The company’s stock fell from nearly $13 after its first day of trading to below $1 — a level at which it risked being delisted from the NASDAQ altogether.
After shares reached as low as $0.86 this past March, Astra announced it had entered into a deal to be taken private by a group of long-term investors and its co-founders, Chris Kemp and Adam London. The transaction involved purchasing all outstanding shares not owned by the founders for $0.50 each.
The deal was completed July 18, ending Astra’s status as a publicly traded company and enabling it to focus on plans without the strains of public company reporting. These plans include advancing Astra’s Rocket 4 series, which had been delayed due to financial constraints.
Astra: Most likely to say “next time.”
Early promise: Entered the market on the potential for low-cost, high-frequency launches.
Technical and financial struggles: Subsequent launch failures and high operational costs strained finances.
Going private: Taken private in July 2024 after shares fell below $1.
Current status: Focused on advancing Rocket 4 series and other initiatives outside the public market.
Satellogic: Redomiciling for survival
Uruguay-born Satellogic found it increasingly difficult to run an Earth imagery constellation business outside the United States after going public in January 2022.
Roughly a year later, the satellite operator set out to redomicile to the United States to get closer to its primary customers, namely the U.S. government, after missing revenue targets.
The company successfully secured a remote sensing license in the United States in November as part of its move, covering the 36 sub-meter resolution satellites already in low Earth orbit (LEO) and plans to add to the constellation in coming years.
Ultimately, Satellogic aims to operate a network of 200 satellites so it can map the world daily.
The operator builds its dishwasher-sized spacecraft in-house and is also hoping to sell them to other companies under a new business line announced in early 2023.
In November, the company agreed to help India’s Tata Advanced Systems Limited develop the TSAT-1A Earth observation satellite that launched the following year, marking what Satellogic said was an important step for its new space systems business.
However, Satellogic has yet to announce its first direct satellite sale as it continues to face significant financial challenges, which recently led to layoffs that reduced its workforce to around 160 employees, less than half of its size from the previous year.
The operator is also slowing the deployment of next-generation “Mark V” imaging satellites, designed to take imagery at a native resolution of 70 centimeters and use onboard processing.
Satellogic’s moves to conserve cash while waiting to see just how green the grass is in the United States comes as the company continues to grapple with slower-than-expected revenue growth.
The company generated $10.1 million in revenue in 2023, a far cry from the $132 million it had projected back in November 2021 in the run-up to its SPAC merger.
Satellogic (SATL): Most likely to live abroad.
Relocation: Went public in January 2022 and later decided to relocate to the United States to be closer to key customers.
Operational shifts: Slowing the deployment of new satellites and cutting workforce to manage costs.
Financial struggles: Missed revenue targets and ongoing financial challenges.
Current status: Continuing to operate with a smaller workforce and reduced ambitions.
BlackSky: Expanding despite market skepticism
Earth imaging and analytics company BlackSky has continued to expand its geospatial intelligence constellation and secure new contracts, despite investor skepticism around the sustainability of SPAC-backed space ventures.
The small satellite operator has enjoyed strong support from U.S. government agencies after its debut in September 2021, bolstering revenue streams and underlining the strategic value of its services even amid persistent concerns about its path to profitability.
Throughout 2022 and 2023, BlackSky’s stock price struggled amid a challenging environment for high-growth tech stocks. Rising inflation, interest ratehikes and a shift away from speculative investments led to substantial declines across the class and many other tech and space-related stocks.
In response, BlackSky focused on cost management, increasing operational efficiency and expanding its product offerings.
The company hopes to differentiate itself in an increasingly crowded Earth observation market by combining satellite imagery with artificial intelligence and machine learning for advanced analytics.
In its latest financial results, BlackSky saw some revenue growth compared to previous periods, primarily due to increased demand for its geospatial intelligence services.
However, the operator is still facing challenges related to profitability, reporting a net loss the company pinned on ongoing investments to expand its constellation and develop new technologies.
The operator has a five-launch deal with classmate Rocket Lab to start deploying its first very-high-resolution Gen-3 satellites in the final three months of this year.
The Gen-3 satellites are designed to offer significantly improved image resolution, up to 35 centimeters.
BlackSky (BKSY): Most likely to know your every move.
Government support: Continued constellation expansion with strong U.S. government support.
Market challenges: Stock price decline amid a tough environment for high-growth tech stocks.
Future plans: Deploying very-high-resolution Gen-3 satellites to enhance imagery capabilities.
Current status: Shares closed at $1.17 Aug. 29, down from around $10 on their debut, reflecting ongoing caution toward SPAC ventures.
Redwire: Betting on space infrastructure
Redwire’s focus on developing and acquiring advanced space infrastructure technologies, including on-orbit manufacturing, has positioned it as a well-connected player in the growing commercial space sector.
Like other classmates, the company’s shares began their descent from around $10 soon after their debut.
However, after languishing below $4 for much of 2022 and 2023, the stock has recently been on an upward trend thanks to multiple contracts with NASA and other government agencies.
Redwire aims to play a critical role in developing 3D printing and other technologies seen as essential for future deep space exploration and LEO commercialization.
But the company’s high level of spending on research and development, coupled with the costs associated with scaling up operations and integrating new acquisitions, has led to continued net losses.
According to Redwire’s leadership, while its aggressive investment strategy has pressured profitability, it also lays the groundwork for future success by building a robust portfolio of space technologies that are expected to generate significant revenues in the long term.
The space infrastructure specialist recently announced plans to buy Hera Systems, a manufacturer of small satellites focused on national security space missions, to strengthen its foothold in the defense market. The shares closed at $6.67 Aug. 29.
Redwire (RDW): Most likely to buy your friends.
Strategic focus: Developing advanced space infrastructure technologies through acquisitions.
Financial pressures: Continued net losses due to high R&D spending and scaling operations.
Market positioning: Recent acquisitions and government contracts position Redwire for long-term growth.
Current status: Shares have shown some recovery but remain below debut levels.
Spire Global: Regulatory challenges
The NYSE told Spire Global in August that the satellite data and analytics company risked being kicked the stock exchange after failing to submit a regulatory filing detailing finances for the three months to June 30.
Spire recently said it needs more time to prepare the 10-Q filing amid an internal review of accounting practices and procedures surrounding the timing of bookings under its space-as-a-service hosted payload business.
The company has also said it will need to restate historical financials, prompting Raymond James analyst Ric Prentiss to downgrade the stock from “outperform” to “market perform” because the revised figures could affect the covenants tied to its debt.
He expects the restatements will have an 8-9% impact on annual reported revenue.
Spire announced Aug. 29 that it agreed to pay a fee to get a waiver to avoid default under its credit facility with Blue Torch Capital, helping shares close up slightly to $8.48, though still below their debut of around $10.
The uncertainty added more pressure to shares that have fallen to around $8 after peaking soon after their debut at around $10.
Spire has been among the strongest stock performers in the class, and its accounting slip underscores the robust governance challenges facing post-SPAC space companies.
“We still believe in the continued growth story and fundamentals at Spire,” Prentiss added, pointing to the company’s target to reach positive cashflow this summer.
In its latest financial results, Spire reported $25.7 million in revenues for the first quarter of 2024, up 6% compared to the same period in the previous year.
The company also reduced its net loss by 43% to $25.2 million for the quarter.
Alongside a space services business that sees Spire host customer payloads on satellites the company builds in-house, the operator continues to see strong demand for the analysis Spire provides from its own constellation, particularly for aviation data, weather forecasting and maritime tracking applications.
Spire Global (SPIR): Most likely to have their head in the cloud.
Recent setbacks: Faces potential delisting from NYSE due to accounting issues.
Strong demand: Continues to see demand for its data services across aviation, weather and maritime sectors.
Current status: Working to resolve accounting challenges while maintaining market confidence.
Terran Orbital: Being sold to Lockheed Martin
Going down the SPAC route “was a big mistake,” Terran Orbital CEO and co-founder Marc Bell lamented on a podcast in 2023, a year and a half after becoming a public company.
Terran Orbital only received about $29 million of the $345 million capital its SPAC had in store for a merger, after many of the shell company’s investors chose to get their money back instead of holding stock in the merged company.
The satellite maker still raised $255 million in total proceeds from the SPAC merger, when including a concurrent private investment supported by companies including Lockheed Martin.
Still, “the money that was there never materialized and we went public without the money that we expected,” Bell continued.
A year after his comments aired, Terran Orbital finds itself in the middle of being taken over by Lockheed Martin for pennies on the dollar after shares declined to around $0.40.
High operational costs and the work needed to ramp up to mass satellite manufacturing aside, the company’s shares have taken a beating amid lingering questions over a $2.4 billion contract from Rivada Space Networks.
Rivada Space, a privately held company with plans that would easily make it Terran Orbital’s largest customer, remains highly grounded about how it plans to finance the 300 broadband satellites under this contract.
At one point Terran Orbital had expected $180 million in 2023 for early work on these 500-kilogram satellites.
According to Terran Orbital’s latest regulatory filings, the manufacturer has only $13.2 million to date.
Boca Raton, Florida-based Terran Orbital removed the contract from the backlog of revenues in its latest earnings update Aug. 12, citing a general move to a cash-basis method of accounting for all commercial accounts.
That reduced Terran Orbital’s backlog to $312.7 million, with 91% associated with Lockheed Martin, which at the time only owned a third of the company after dropping plans earlier in the year for a larger stake.
In the earnings update, Terran Orbital said cash on its balance sheet had fallen $13 million to $31 million, only $11 million above the minimum required to comply with its debt obligations.
Just days later, Lockheed swooped in with a plan to buy Terran Orbital for $0.25 per share in cash and retire the company’s existing debt. The aerospace and defense giant had proposed buying Terran Orbital for $1 per share in March in a deal it walked away from two months later.
Terran Orbital’s work for Lockheed Martin includes a contract for 36 satellite buses to join the U.S. Space Development Agency’s LEO mesh network of military satellites.
And while Rivada Space is no longer recorded in the company’s backlog of future revenues, Bell told SpaceNews Aug. 13 that the proposed constellation operator is all paid up to complete an ongoing preliminary design review.
Rivada Space has plans for 576 satellites in total and must deploy 288 of them by mid-2026 to comply with its regulatory license.
Terran Orbital (LLAP): Most likely to be owned by a Fortune 500 company.
Market entry: Went public with high hopes but received much less capital than expected.
Financial struggles: High operational costs and doubts over large contracts led to financial difficulties.
Sale: Pending acquisition by Lockheed Martin for $0.25 per share announced July 2024.
Current status: Planned integration with Lockheed Martin, focusing on sustainable business operations.
Planet: Hyperspectral future
Planet launched its first hyperspectral satellite, Tanager-1, on Aug. 16, part of the EO operator’s plan to achieve profitability by early next year following recent cost cuts.
Tanager-1 joined 36 SuperDove satellites on the SpaceX Falcon 9 rideshare mission for expanding Planet’s global optical imaging constellation.
Planet co-founder and CEO Will Marshall recently said the company sees strong interest in hyperspectral data from governments and commercial areas such as agriculture and oil and gas, although it is early days for the market.
The company announced record quarterly revenues of $60.4 million in June, largely driven by government customers.
However, the operator also recorded an $8.4 million loss for the quarter as it pointed to ongoing headwinds in the commercial market, mainly in the agricultural sector.
Just weeks later, Planet said it was laying off about 180 employees, or 17% of its workforce, in its second major headcount reduction since announcing plans last year to shed 117 employees to cut costs.
Planet (PL): Most likely to talk your ear off about the environment
Recent achievements: Launched its first hyperspectral satellite to diversify data offerings.
Financial struggles: Ongoing losses and multiple rounds of layoffs despite strong government interest.
Future plans: Aiming for profitability by early next year with new data products.
Current status: Shares closed at $2.75 on Aug. 29, down from around $11 after their December 2021 debut.
Rocket Lab: Resilience and expansion
In May 2021, shortly before its public listing, Rocket Lab’s Electron rocket failed in a mission to deploy two small imagery satellites for its classmate BlackSky.
The company also suffered a launch failure in September 2023 as a public company.
But despite these setbacks, Rocket Lab has identified root causes and implemented corrective measures relatively quickly to return to flight, which is important for maintaining investor confidence in its resiliency and commitment to reliability.
No earlier than mid-2025, Rocket Lab aims to demonstrate a larger rocket called Neutron to expand in the medium-lift launch market.
Neutron is part of plans to serve a greater variety of missions, including satellite deployment, space station resupply and potentially crewed programs.
Rocket Lab has also pivoted into satellite manufacturing in search of new revenue streams.
After winning a $143 million contract in 2022 to provide 17 spacecraft chassis as a subcontractor for Globalstar’s upgraded connectivity constellation, the U.S. Space Development Agency awarded Rocket Lab a $515 million contract to build and operate 18 spacecraft to join a LEO network of military satellites.
Rocket Lab announced record revenue of $106 million in its latest financial results for the second quarter of 2024, a 71% increase year-over-year after launching its 50th Electron rocket.
However, mainly thanks to heavy investments in Neutron and other development projects, the company’s string of quarterly net losses continued with a net loss of $44.3 million for the three months to the end of June.
The company’s shares closed at $6.23 Aug. 29, compared with $10.43 at the end of their first day on the market three years ago.
Rocket Lab: Most likely to reach new heights
Market positioning: Despite launch failures, continues to secure key contracts and expand its services.
Development focus: Building the larger Neutron rocket to enter the medium-lift launch market.
Financial performance: Achieved record revenue but continued net losses due to ongoing investments.
Current status: Shares trading around $6, reflecting market volatility and development costs.
This article first appeared in the September 2024 issue of SpaceNews Magazine.
