This website collects cookies to deliver better user experience. Cookie Policy
Accept
Sign In
The Wall Street Publication
  • Home
  • Trending
  • U.S
  • World
  • Politics
  • Business
    • Business
    • Economy
    • Real Estate
    • Markets
    • Personal Finance
  • Tech
  • Lifestyle
    • Lifestyle
    • Style
    • Arts
  • Health
  • Sports
  • Entertainment
Reading: Diving SPACs Are a Warning for Aerospace Startups
Share
The Wall Street PublicationThe Wall Street Publication
Font ResizerAa
Search
  • Home
  • Trending
  • U.S
  • World
  • Politics
  • Business
    • Business
    • Economy
    • Real Estate
    • Markets
    • Personal Finance
  • Tech
  • Lifestyle
    • Lifestyle
    • Style
    • Arts
  • Health
  • Sports
  • Entertainment
Have an existing account? Sign In
Follow US
© 2024 The Wall Street Publication. All Rights Reserved.
The Wall Street Publication > Blog > Markets > Diving SPACs Are a Warning for Aerospace Startups
Markets

Diving SPACs Are a Warning for Aerospace Startups

Editorial Board Published January 8, 2022
Share
Diving SPACs Are a Warning for Aerospace Startups
SHARE

For speculative aerospace startups, taking off gets harder when market winds suddenly turn against you.

Last year consolidated special-purpose acquisition companies, or SPACs, as the preferred way to list firms that make no money but promise cosmic returns. Aerospace has fully embraced them, starting with British billionaire Richard Branson’s space-tourism venture, Virgin Galactic, in 2019 and then through a raft of small-satellite launchers—such as Rocket Lab and Astra Space —and makers of electric vertical-takeoff-and-landing vehicles, or eVTOL—like Joby Aviation, Archer Aviation, Vertical Aerospace and Lilium Air Mobility.

On Friday, Mr. Branson virtually attended the opening bell for the Nasdaq debut of his other space venture, Virgin Orbit, which was rung by Chief Executive Dan Hart. The shares closed up a whopping 24%, but are still down 12% since its SPAC merger was completed on Dec. 30.

Indeed, almost all recently SPAC-ed aerospace startups have taken a beating over the past three months, with shares in Virgin Galactic down 46% and those in Archer and Joby losing 43% and 31%, respectively.

More broadly, the market value of these futuristic moonshots has ebbed and flowed in lockstep with cryptocurrencies and “meme stocks,” launching them toward the moon in the first half of 2021 and later deflating them. As the year came to a close, investors became more discerning: They bought the shares of SPACs that had fallen close to or below their trust values, which almost ensures a return, while retaining a skeptical view of ex-SPAC ventures.

It should be a warning for upcoming aerospace startups with galactic valuations. The latest is Eve, the eVTOL subsidiary of Brazilian plane maker Embraer, which two weeks ago announced a SPAC deal that would give it a valuation of $2.9 billion—Embraer’s own market capitalization is only $3.1 billion. To be sure, Eve already has $5 billion in preorders, but it will be fighting with myriad competitors for a market that is closer to science fiction than to the $1 trillion potential size dreamed of by some analysts.

By contrast, small-satellite launchers are already a promising entry point into the burgeoning space economy. Rocket Lab remains richly valued but has taken the lead among them and stands out as the rare ex-SPAC with more conservative official projections than those of its analysts. On the other end of the spectrum, Virgin Orbit’s valuation is now the cheapest among high-profile aerospace startups relative to expected 2026 earnings and has likely fallen below that of Astra, which struggled with many failed launches last year.

Despite Friday’s rally, Virgin Orbit still looks unfairly maligned compared with its sibling Virgin Galactic, which isn’t expected by Wall Street to generate any operating income in the next five years: It is seen coming close to break-even next year and making a sizable profit in 2024. It has already delivered 19 satellites into orbit, and its clever use of a Boeing 747 jet as a mobile rocket platform provides any government with geopolitical concerns the ability to deploy satellites from its own airspace.

However, despite expecting to raise $383 million from its SPAC backers in August, it only managed to hold on to $68 million. Together with some extra funds by Mr. Branson and already committed private placements by big corporations like Boeing, the final gross proceeds added up to $228 million—barely above the minimum cash requirements of the merger agreement.

The fact that ex-SPAC aerospace stocks indiscriminately trade in tandem can provide daring investors with opportunities. But it is also a reminder of the big role that fickle sentiment will play in the fate of these speculative enterprises.

Write to Jon Sindreu at [email protected]

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

TAGGED:MarketsPAIDWall Street Publication
Share This Article
Twitter Email Copy Link Print
Previous Article What’s Your Personal-Finance Resolution for 2022? Here’s What Readers Hope For What’s Your Personal-Finance Resolution for 2022? Here’s What Readers Hope For
Next Article Mother Teresa’s Charity in India Regains Access to Foreign Funding After Ban Mother Teresa’s Charity in India Regains Access to Foreign Funding After Ban

Editor's Pick

California dwelling of lacking child’s mother and father searched; father has served time for youngster cruelty

California dwelling of lacking child’s mother and father searched; father has served time for youngster cruelty

San Bernardino County sheriff’s investigators on Sunday, Aug. 17, searched the house of the mother and father of the infant…

By Editorial Board 9 Min Read
Farmer Needs a Spouse: John Sansone and Claire Dinette Break up!
Farmer Needs a Spouse: John Sansone and Claire Dinette Break up!

Studying Time: 2 minutes It's sadly over for one more actuality tv…

4 Min Read
Meri Brown Hints at “Accusations, Heartbreak” in Instagram Publish
Meri Brown Hints at “Accusations, Heartbreak” in Instagram Publish

Studying Time: 3 minutes Meri Brown seems to be going via it…

5 Min Read

Oponion

Dianna Agron Accent Attracts Unkind Hilaria Baldwin Comparisons

Dianna Agron Accent Attracts Unkind Hilaria Baldwin Comparisons

Studying Time: 3 minutes Dianna Agron is getting in comparison…

May 28, 2025

Facebook Parent Meta to Lay Off 11,000 Employees

TechLayoffs are the first broad head-count…

November 9, 2022

Playing cards Towards Humanity recordsdata lawsuit towards Elon Musk’s SpaceX on allegations of trespassing in Texas

Try what's clicking on FoxBusiness.com. Sport…

September 22, 2024

Federal choose points key ruling in opposition to gun maker Sig Sauer in widow’s lawsuit

Take a look at what's clicking…

July 10, 2025

Tom Tugendhat knocked out of Tory management race – as James Cleverly tops newest vote | Politics Information

Tom Tugendhat has been knocked out…

October 9, 2024

You Might Also Like

Trump’s 401(ok) enlargement fuels ethereum growth
Markets

Trump’s 401(ok) enlargement fuels ethereum growth

FOX Enterprise' Gerri Willis has the main points on the funding technique on 'Varney & Co.' Practically $4 billion of…

4 Min Read
Cracker Barrel inventory plunges amid model makeover backlash
Markets

Cracker Barrel inventory plunges amid model makeover backlash

FOX Enterprise’ Jeff Flock reviews on Cracker Barrel unveiling a brand new brand as a part of a broader model…

3 Min Read
Intel will get  billion from Softbank as White Home mulls stake
Markets

Intel will get $2 billion from Softbank as White Home mulls stake

Former Chrysler and Dwelling Depot CEO Bob Nardelli praises President Donald Trump’s daring financial play because the White Home eyes…

5 Min Read
Intel will get  billion from Softbank as White Home mulls stake
Markets

White Home mulls 10% stake in Intel after CEO assembly

Former Chrysler and Dwelling Depot CEO Bob Nardelli praises President Donald Trump’s daring financial play because the White Home eyes…

4 Min Read
The Wall Street Publication

About Us

The Wall Street Publication, a distinguished part of the Enspirers News Group, stands as a beacon of excellence in journalism. Committed to delivering unfiltered global news, we pride ourselves on our trusted coverage of Politics, Business, Technology, and more.

Company

  • About Us
  • Newsroom Policies & Standards
  • Diversity & Inclusion
  • Careers
  • Media & Community Relations
  • WP Creative Group
  • Accessibility Statement

Contact

  • Contact Us
  • Contact Customer Care
  • Advertise
  • Licensing & Syndication
  • Request a Correction
  • Contact the Newsroom
  • Send a News Tip
  • Report a Vulnerability

Term of Use

  • Digital Products Terms of Sale
  • Terms of Service
  • Privacy Policy
  • Cookie Settings
  • Submissions & Discussion Policy
  • RSS Terms of Service
  • Ad Choices

© 2024 The Wall Street Publication. All Rights Reserved.

Welcome Back!

Sign in to your account

Lost your password?