Whether you bought during the recent initial public offering (IPO) of Momentus or finish off sitting on the sidelines, one factor remains absolutely clear: You cannot afford to ignore the critical market lessons that the space transportation and infrastructure firm provided on its way to becoming a publicly traded enterprise.
On one hand, analysts project the broader space economy to command a multitrillion-dollar valuation. As the ultimate frontier market, space infrastructure has the potential to remove the suffix in science fiction.
When Did Momentus IPO?
Momentus IPO’d under the ticker (NASDAQ: MNTS) on August 13, 2021, closing at $10.68 for the day, raising around $150 million in cash.
Momentus Financial History
While Kokorich and fellow Momentus Co-Founder Lev Khasis left the organization in order for the IPO to go through, the move didn’t come cheaply. According to current CEO John Rood, in exchange for the co-founders selling their stake and exiting the company, the deal cost about $40 million.
Further, the valuation of Momentus essentially saw a 50% haircut, dropping to $567 million from $1.1 billion. As well, the matter of the falsified testing results of the company’s prototype spacecraft cost approximately $8 million in civil penalties. To say Momentus got off on the wrong foot would be a gross understatement. Nevertheless, battle-hardened speculators might see a heavily discounted opportunity here.
Despite the mountainous challenges ahead of the space transportation firm — both in terms of competitive headwinds and problems it caused on its own — management maintains ambitious goals, eyeballing a revenue target of more than $2 billion by 2027. In addition, Momentum expects to be profitable based on earnings before interest, taxes, depreciation, and amortization (EBITDA).
Though anyone can spew projections, in this case, it’s not without justification. By the company’s own estimates, the global space economy could hit a valuation of $1.4 trillion by 2030. Offering a slightly more conservative forecast is Morgan Stanley (NYSE: MS), which “estimates that the global space industry could generate revenue of more than $1 trillion or more in 2040, up from $350 billion, currently.”
Importantly, Morgan Stanley analysts stated that the “most significant short- and medium-term opportunities may come from satellite broadband Internet access,” which could play into Momentus’ core space infrastructure business. Nevertheless, investors will want to be extremely vigilant as the company is an aspirational enterprise — there was no revenue last year and management expects the same this year.
Easily one of the most contentious public market debuts over the last several years, Momentus first caught investors’ attention in October of last year when Stable Road Acquisition Corp., a special purpose acquisition company (SPAC), announced its intention to merge with the space company.
After meeting the various requirements necessary to complete the business combination, Momentus logged a date of Aug. 13, 2021, on the IPO calendar. Shares trade on the Nasdaq exchange under the ticker symbol MNTS.
At the time of the merger announcement, Stable Road Acquisition marketed Momentus as the “first publicly traded space infrastructure company at the forefront of the new space economy.” Furthermore, the merger target enjoyed significant credibility, with its partners and clients including powerful institutions like SpaceX, Lockheed Martin (NYSE: LMT) and NASA.
Moreover, through a multitiered business model, the tech startup aims to address in-space transportation and infrastructure needs, covering market segments such as satellite as a service and in-orbit solutions. According to Allied Market Research, the global satellite data services market could reach a valuation of nearly $19.4 billion by 2027.
It’s in this area that defense contractors like Lockheed Martin and U.S. government agencies like NASA have paid significant attention to. As well, this segment has drawn intensive scrutiny because of Momentus’ possible national security concerns.
As a Russian national, Momentus Co-Founder and CEO Mikhail Kokorich drew concerns from U.S. authorities that the company’s various innovations could find their way into adversarial nations’ hands. To resolve this matter, Kokorich resigned his post as chief executive and as a board member.
Unfortunately, the bad news didn’t end there, with the Securities and Exchange Commission fining Momentus for falsely claiming a successful test of one of its space technologies. In reality, it failed said test, harshly reminding investors about the risks involved in SPAC-based IPOs.
A great irony that transpired for Momentus is that as a SPAC-based IPO, this mechanism allowed public investors to basically participate in a new offering at the ground floor. Unlike a traditional public market debut, retail buyers purchasing shares of blank-check firms before they make their merger announcement are on equal footing with almost everyone else.
However, due to the myriad problems associated with MNTS stock, those who are arriving late to the game are no worse for wear. Following its first day of trading on the Nasdaq exchange, the equity unit slipped almost 3% against the prior session. And relative to its all-time closing high of $27.42 set on February 9, MNTS shed 61%.
Ignore the distractions, apply risk-management protocols and you may find that Momentus could work out for you as a speculative opportunity. First, the space economy will likely be very popular with younger investors for years, if not decades to come. Again, it’s the ultimate frontier sector, affording first-to-market innovators a chance to dominate a viable economy for multiple generations.
Second, political overtones virtually ensure that the U.S.-based or partnered space enterprises will enjoy substantial public and private backing. According to a Morning Consult survey, nearly half of respondents wanted the U.S. to maintain its space dominance. Further, reports suggest that Kokorich left the U.S. and Momentus no longer has any business dealings with the former CEO.
Finally, investors can take solace in Virgin Galactic (NYSE: SPCE). Though it also suffered controversies related to the underlying business and its SPAC-based debut, SPCE stock offered significant upside for day traders blessed with nerves of steel.
How to Buy Momentus (MNTS) Stock
If you know how to buy stocks, you can participate right away. If not, just follow the easy steps below.
Step 1: Pick a brokerage.
Thanks to the popularity of consumer-level trading, most online brokerages nowadays offer identical financial incentives, such as commission-free trading. Therefore, you can consider other factors that are important to you, such as platform mobility and wider access to different investment products.
- Best For:Active and Global TradersSecurely through Interactive Brokers’ website
- Best For:Beginnerssecurely through Robinhood's website
- Best For:Futures Tradingsecurely through TradeStation's website
- Best For:Experienced Traderssecurely through Freedom Finance's website
Step 2: Decide how many shares you want.
To help manage risk, you should consider a balanced share count, one that will net you adequate gains if your target investment rises but also limits your downside exposure if things don’t pan out as hoped.
Step 3: Choose your order type.
Before placing your bet, familiarize yourself with these market concepts.
- Bid: The highest price a buyer will offer, the bid is always lower than the ask.
- Ask: The lowest price a seller will take, the ask is always higher than the bid.
- Spread: Beyond the bid-ask price difference, the spread signals market liquidity and risk. Narrower spreads imply higher liquidity and lower risk, while the opposite is true for broader spreads.
- Limit order: Request a trade at a specific price through limit orders. This approach offers price transparency but no execution guarantees.
- Market order: In contrast, market orders guarantee fulfillment but at the prevailing rate, which may fluctuate significantly by the time your order goes through.
- Stop-loss order: A protective mechanism for your portfolio, a stop-loss order automatically exits your position at either a predetermined price or anything lower.
- Stop-limit order: Conversely, stop-limit orders only execute at a predetermined price, ensuring maximum control of your automated exits. However, such orders carry the same nonfulfillment risk as limit orders.
Step 4: Execute your trade.
To execute a market order, follow these steps:
- Select your action type (buy or sell).
- Enter the shares you want to acquire (or sell).
- Hit the Buy (or Sell) button.
Follow the same cycle for limit orders (but include your execution price).
A Monumental Opportunity or at Least a Lesson
Frankly, Momentus is not for everyone. Speculators will take encouragement from the multitrillion-dollar potential of the space economy. Many others will see MNTS stock as a well-conceived trap. Either way, the space tech firm provides real-time wisdom: Always do your due diligence.
Frequently Asked Questions
What exactly does Momentus do?
Momentus is a commercial space company that offers transportation and other in-space infrastructure services. Their infrastructure plans to offer transfer and service vehicles to carry satellites to space.
About Joshua Enomoto
His distinct writing style of distilling convoluted data into relatable and compelling narratives has earned him recognition among several investment-related publications.