Space companies are a big craze among investors. After all, the vast depths of space present vast opportunities for profit…right? Unfortunately for investors, the equation hasn’t been that simple. 😢
First, let’s start with Astra Space, which came public via a special purpose acquisition company (SPAC) in early 2021. At the time, the company raised $500 million in cash at a $4.1 billion valuation, hoping to achieve its goal of cheaply and rapidly producing small rockets. 🚀
The company had reached orbit twice successfully but failed three times after going public. That, combined with other operational issues and a floundering stock market, sent its shares on a clear downward trajectory. In the context of that massive decline, the stock was back in the news today on news that it will be taken private by its founders at a roughly $30 million valuation.
Speaking of lackluster space stocks, Virgin Galactic was back on traders’ radars. The company enjoyed a 20% pop today after announcing plans for cost savings. It will pause spaceflight operations next year to focus resources on developing its next-generation Delta-class spacecraft, also cutting 18% of its workforce as part of the strategic reorganization of resources. ⏸️