First Light Acquisition (FLAG) Stock

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Contributor, Benzinga
September 13, 2021
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Following a tumultuous election cycle in 2020, President Biden may have felt that the worst of the societal upheaval — a consequence of the devastating COVID-19 pandemic — was over. However, because of the tragic outcome of the U.S. pullout from Afghanistan, the Biden administration faces a steep challenge to placate angry Americans distraught at the loss of lives and international reputation.

Recently, news broke that North Korea successfully tested long-range missiles, demonstrating the rogue nation’s bad-faith efforts in supposedly supporting peace initiatives in the Asia-Pacific region. Given that the unprecedented meeting between President Trump and Supreme Leader Kim Jong-un epitomized a landmark moment for the prior administration, Biden is under severe pressure to respond.

One possible outcome is the ramping up of defense-related investments, which augurs well for special purpose acquisition company (SPAC) First Light Acquisition Group. Just launching its initial public offering (IPO), First Light’s management team strongly hinted at targeting a business combination with a defense or security firm.

When is the First Light Acquisition Group IPO Date?

First Light Acquisition IPO’d at $10 per share on September 9, 2021. However, the stock transferred to the NYSE American exchange, taking the ticker symbol FLAG on November 14, 2022.

First Light Acquisition Group Financial History

As a shell company, First Light Acquisition itself has no operating history; therefore, it’s impossible to gauge its financial history or outlook. That said, First Light’s leadership team stated in its prospectus with the Securities and Exchange Commission that it’s potentially seeking a defense-related enterprise.

In its filing for its IPO, First Light declared that it intends to focus its efforts on “identifying prospective opportunities that provide technology-enabled solutions with high-growth, mission-critical applications in government and commercial markets.” Further, the key executives of the SPAC have experience that lean heavily toward military aviation.

Reading between the lines, it’s possible — though absolutely not guaranteed — that First Light may be targeting a defense contractor in the broader aviation industry, perhaps in the area of smart-technology-integrated unmanned aerial vehicles.

If so, First Light would be engaging one of the most viable markets which offer extensive defense and civilian applications. According to data from Fortune Business Insights, the global military drone market reached a valuation of nearly $10.7 billion in 2020. Naturally, the pandemic imposed a dent on the sector’s demand trajectory. However, by the end of this year, the drone market could be worth $11.25 billion and command a value of $26.12 billion in 2028.

But how likely is it that First Light moves in this direction? Compelling evidence comes from the executive team’s experience, which the SPAC officially intends to leverage. This includes CEO William J. Weber, a former U.S. Army officer who most recently served as president and CEO of KeyW Corporation (NASDAQ: KEYW), which handles among other businesses agile cyber operations and warfare.

Further, executives such as Thomas A. Vecchiolia, Admiral William J. Fallon and General James E. Cartwright served as aviators in the military, lending credence to the speculated business combination. Aviation-related terms appear 18 times on First Light’s IPO prospectus, while aerospace appears 31 times.

First Light Acquisition Group Potential

Before you get too excited about First Light’s potential, you must remember that a SPAC’s only obligation is to find a merger candidate, not necessarily to find a good one or even a deal that makes sense. While First Light states on paper that it seeks a company with mission-critical applications for governmental and commercial markets, the shell company could just as easily combine with a hotdog stand franchise.

You might laugh or roll your eyes, but this is the nature of the SPAC business. 

At the same time, the heavy influence of former military officers and defense industry experts implies strongly that First Light is serious about its intentions. Further, that the combined experience of the SPAC is geared toward aviation and aerospace suggests that FLAG stock may benefit from multiple addressable markets.

On the defense front, the Biden administration faces critical geopolitical flashpoints that it cannot ignore. Moreover, the tarnishing of the U.S. reputation means the nation’s defense sector enjoys robust incentives to right the ship. From a commercial viewpoint, advanced aeronautical solutions may help address critical economic challenges, such as the last-mile problem in parcel shipments.

Finally, states that “Retirees should not engage in personal or professional activities which are incompatible with the standards of conduct expected of active duty personnel.” Therefore, it’s highly unlikely that distinguished admirals and generals will besmirch their honorable reputations by knowingly dumping junk stock on an unsuspecting public.

How to Buy First Light Acquisition Group (FLAG) Stock

While many critics have blasted the dilutive nature of SPACs — leading to several mainstream publications taking note of shell companies’ weak performance post-merger — this special investment class offers privileges that deserve careful consideration.

Primarily, a SPAC-based IPO puts investors on the same playing field. By purchasing shares of blank-check firms before they make their merger announcement, retail investors can acquire shares on the ground floor — a typically unthinkable concept for traditional public market debuts.

Also, since SPACs are themselves publicly traded entities, the process of participation is easy if you already know how to buy stocks. If you don’t, just follow the simple steps below.

Step 1: Pick a brokerage.

While online brokerages were once an expensive novelty, today, the myriad platforms available forced industry participants to standardize financial incentives like commission-free trading. This dynamic allows you to narrow your list of best brokers to attributes you care the most about.

Step 2: Decide how many shares you want.

No matter what kind of IPO you participate in, new offerings are always risky. Therefore, it’s best to choose a balanced share count, one that facilitates upside rewards but also mitigates downside risk if your thesis goes awry.

Step 3: Choose your order type.

Before wagering, get to know these market concepts.

  • Bid: The buyer’s maximum offer, the bid is always lower than the ask.
  • Ask: The seller’s minimum accepting price, the ask is always higher than the bid.
  • Spread: Simply the difference between the bid and ask, the spread also indicates market liquidity and risk. Tighter spreads imply higher liquidity and lower risk, while wider spreads indicate lower liquidity and higher risk.
  • Limit order: Trade requests to be executed at a specific price, limit orders provide transparency but no execution guarantees.
  • Market order: Market orders guarantee fulfillment but only at the current rate, which usually fluctuates.
  • Stop-loss order: A defensive tool, a stop-loss order automatically exits your position at either a predetermined price or anything lower.
  • Stop-limit order: Stop-limit orders only execute at a specified price, providing control in 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:

  1. Select your action type (buy or sell).
  2. Enter the shares you want to acquire (or sell).
  3. Hit the Buy (or Sell) button.

Follow the same sequence for limit orders (but include your execution price).

Aiming High with Your SPAC Portfolio

As a pre-merger-announcement SPAC, no one knows for sure where First Light Acquisition is headed. Nevertheless, key hints suggest that the shell company will attempt to merge with an aeronautics specialist. If so, FLAG stock could be sitting atop a dual civilian and defense market goldmine.

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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.