TAMPA, Fla. — Terran Orbital will address shareholder concerns about its growth prospects in a virtual town hall event Oct. 26 during what is usually a quiet period for a public company just weeks away from announcing earnings.
“This is an out-of-the-box idea to try to improve communications,” CEO and chairman Marc Bell told SpaceNews in an Oct. 25 interview.
The town hall comes amid calls from some of the small satellite maker’s minority investors for management changes to reverse declining shares. Those changes include replacing Bell as CEO and separating the chairman and CEO roles.
Bell said the town hall event has nothing to do with an Oct. 11 letter from investors collectively holding 8.4% of Terran Orbital — including three engineers who co-founded its primary operating subsidiary Tyvak, which called for leadership changes in addition to a strategic review to improve market credibility.
“It has to do with my stock price being under $1 and people not understanding what’s going on here,” Bell continued.
The New York Stock Exchange warned Boca Raton, Florida-headquartered Terran Orbital Oct. 20 it would be booted off the public market if it does not have an average closing share price of at least $1 over a calendar month during the next six months.
Terran Orbital’s shares fell below the $1 mark a month ago and closed at $0.83 Oct. 25, after declining from around $10 soon after its market debut in March 2022.
The manufacturer started trading shares after merging with a special purpose acquisition company (SPAC), a financial vehicle for rushing businesses to the public market that has proved controversial in the space industry. Other space firms that went public via SPAC mergers are also underperforming as some of them have wildly missed their revenue projections.
According to Bell, Terran Orbital’s poor stock performance is partly due to investors linking the company to other space firms that have merged with a SPAC, despite significant differences in their businesses.
“We’re still stuck in this newspace SPAC world,” he said, “and most of these newspace SPAC companies aren’t going to last, aren’t going to survive — and we’re thriving.”
Terran Orbital expects to get $180 million this year alone for early work to build satellites for Rivada Space, the manufacturer said during its last earnings results in August, as part of a $2.4 billion contract that remains largely under wraps.
Bell said he aims to give shareholders more transparency around this and other large contract wins to improve its standing in the equity market, which would give the company more opportunities for raising funds.
Recently, Terran Orbital also announced a deal to build 36 satellite buses for Lockheed Martin, and a $4.7 million contract Oct. 25 with the European Space Agency for a proximity operations and in-orbit servicing mission.
The town hall event, scheduled Oct. 26 at 3 p.m. Eastern, is open to the public and will include a financial, operational, and strategic update, but will not cover quarterly financial results that will instead be part of the company’s earnings announcement Nov. 14.
“The idea is to improve communications between us and our shareholders,” Bell said, “realizing we live in a day and an age of instant gratification.”
This includes a Q&A session with Terran Orbital management that he said is open to all shareholders, including the group of minority investors led by financial services firm Sophis Investments seeking structural changes at the company.
A spokesperson for these minority investors, which calls itself the Concerned Investor Group, said Terran Orbital has not responded to requests for a meeting to discuss their concerns.
Terran Orbital’s board of independent directors issued a letter Oct. 19 to shareholders to underline its continued support for Bell and Terran Orbital’s management following the Concerned Investor Group’s letter.
The Concerned Investor Group and other individual investors do not have the equity power alone to force change at the company. Terran Orbital’s management, board of directors, and direct investors that include Lockheed Martin also have stakes in the company.
In addition to Sophis and its affiliates, the Concerned Investor Group includes Tyvak co-founders Austin Williams, Roland Coelho, and Jordi Puig-Suari.
California-based Tyvak (Tyvak Nano Satellite Systems) was founded in 2011 and was sold to Terran Orbital in 2014. Terran Orbital phased out the Tyvak brand to reflect a transition from building nanosats and cubesats to larger satellites.
Williams was one of at least three senior engineers and program executives who left the company in late 2022 following disagreements over its direction.