Three space companies at risk of running out of cash

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Three space companies at risk of running out of cash



A view from aboard the upper stage of rocket LV0009 during the company’s livestream on March 15, 2022.

Astra / NASASpace

The space sector is at the end of a boom and bust cycle. While many companies battened down the hatches to survive, some listed companies are playing it safe.

In recent years, about a dozen space companies have gone public. While stocks have performed quite dismally since their debut, the majority are still moving forward and hoping to gain momentum in the coming year, with some close to coveted profitability milestones.

But a trio of names are likely to follow the same path as Virgin Orbit, which folded last year. Here you can find out who is most at risk of delisting, takeover or even bankruptcy.

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moments

Space tug operator Momentus has already warned shareholders that it is running out of money, and earlier this month the company abandoned plans for its next mission.

Once valued at over $1 billion, moments has had a few turbulent years. Despite a 1-for-50 stock split last year, shares currently trade at nearly 80 cents, giving the company a low valuation of $7 million.

The next few weeks will likely be crucial for Momentus to find a major new backer or buyer or face bankruptcy.

Astra

Astra has been raising incremental funding rounds with a handful of investors over the past few months as the company has been almost out of cash since October.

Its rocket launch business has been on hold since June 2022 and the acquired spacecraft business is not contributing significant revenue growth. And although the company’s founders presented a take-private plan in November, there was no comment from Astra’s board on the proposal.

Once valued at over $2.5 billion, Astra’s value has been below $50 million for months.

Without completing this take-private deal, it is unclear how the company could emerge from its liquidity crisis.

Connected

Sidus room is a little-known space company that took the traditional IPO route in late 2021, trading on the Nasdaq at a valuation of nearly $200 million. Sidus has set itself the goal of building its own satellite constellation as a test or data platform for a large number of customers.

However, it has seen minimal revenue growth and increasing annual net losses. Although its first satellite was scheduled to launch in late 2022, the company has not yet put the spacecraft into orbit and is most recently targeting a launch in March.

Since its IPO, Sidus has raised small amounts of financing of $5 million or less through public stock offerings. However, the company had less than $2 million in cash at the end of September and was trading at a value of nearly $9 million, according to FactSet.

Last month, Sidus conducted a 1-for-100 reverse stock split to restore compliance with Nasdaq listing rules.

Momentus, Astra and Sidus did not respond to CNBC requests for comment.

Elsewhere in space

A fourth space company in a potentially precarious position is the satellite imaging company Satellite logic. The last financial update dates back to the end of June. At the time, Satellogic said it had significant doubts about surviving until September 2024. The company’s shares are currently trading at around $1.50, at a valuation of $21 million.

Despite likely turmoil, the space sector as a whole is not necessarily struggling and continues to attract interest from private markets. Overall, investment in the space sector rebounded in 2023, with companies bringing in $12.5 billion in investments last year.

And although industry analysts had already anticipated the consequences of the flood of public debuts a few years ago, they have not yet been as severe as predicted. Many space stocks are below where they were when they first came to market – and in many cases well below initial financial projections – but most are not on the verge of death.

For example, Terran orbital won’t come close to the $411 million in 2023 revenue it forecast when it went public three years ago. But despite its stock price at nearly 80 cents and a valuation of $156 million, Terran Orbital appears to have a lifeline from a key customer.

Earlier this month, Terran announced receipt of a milestone payment from its largest customer, Rivada, and on the same day announced that its year-end cash balance was $70 million, up from $39 million at the end of the third quarter.





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2024-01-27 12:00:01

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