Rocket Lab's shares shot up as high much as 16 per cent in Thursday (Friday NZT) trading on the Nasdaq - following an announcement that the company is expanding spacecraft production, plus a rival's spectacular failure.
Late in the session, the stock traded up 15 per cent to US$11.63 for a market cap of US$5.8 billion - meaning founder Peter Beck's 13 per cent personal stake is now worth around US$634 million ($874m).
Today's surge is also potentially good news for Sir Stephen Tindall's K1W1, ACC's investment arm and early Rocket Lab backer Mark Rocket, all of whom had holdings somewhere below the 5 per cent threshold as Rocket Lab listed on the Nasdaq (none have so far commented on whether they have sold any of their stock).
And it's also a boon for more than 100 past and present Rocket Lab staff who had been granted share bonuses worth more than $1m at last Thursday's listing price (which the stock is now above), and more than 180 granted stock now worth more than $500,000.
At first, the Kiwi-American company's Wall Street debut looked like a failure to launch.
After it listed last Thursday at US$11.50, its stock fell 10 per cent during its first session, and it troughed at US$9.50 before today's run-up.
Around 6000 New Zealanders invested in Rocket Lab's IPO via platforms including Hatch, Sharesies and Stake.
And today's surge was good news for around 3000 Hatch customers, who collectively held $7.8m in Rocket Lab stock at the start of the session, Hatch co-founder and GM Kristen Lunman told the Herald this morning.
Interest has increased. Around 2000 Hatch customers held Rocket Lab shares (via investing in SPAC company Vector Acquisitions, the vehicle for its reverse listing) as it hit the Nasdaq last week.
Factors behind today's surge
Early Rocket Lab backer Ralph Shale said rival Astra's third attempt to reach orbit - a sideways fail that went viral on social media - could have helped. Astra's third failure to reach orbit underlined that while there are dozens of space transportation startups, only SpaceX and Rocket Lab have managed to get a commercial private launch service off the ground.
Whoops. Potential Rocket Lab competitor still looking very much potential https://t.co/9skDIFIHdp— Chris Keall (@ChrisKeall) August 29, 2021
Lunman put today's rise down to Rocket Lab detailing plans to expand its space systems division. That is, making parts for satellites and its own Photon spacecraft.
Beck said construction is under way on a new plant in Auckland, due to open in the fourth quarter. It will manufacture 2000 reaction wheels per year - critical attitude and stability control systems on satellites.
Rocket Lab has leased space in buildings immediately adjacent to its existing mission control and assembly plant in Mt Wellington.
Although Rocket Lab bought Canada's Sinclair Interplanetary to boost its house-brand satellite business, "They're reliant on all these really micro, unique engineering companies to deliver the value chain of components for a satellite, which can be expensive and time-consuming; they often are these bespoke manufacturing outfits."
By expanding its in-house satellite manufacturing operation, Rocket Lab was becoming closer to Beck's vision to move be end-to-end space transportation company.
"They will own more of the value chain," Lunman said.
"It's also about speed and scale, given they're in a space race situation with the likes of Elon Musk and others."
She added, "Many who are still sitting on the sidelines who want to see these companies move aggressively. Anything that solves for speed, and scale with space is seen as a good thing at this point."
Lunman said the satellite component manufacturing news had sparked a lot of positive comments in investor chatrooms, as well as coverage on high-profile US technology investment site TechCrunch.
Stake CEO Matt Leibowitz said, "We saw trade volume on Rocket Lab rise 92 per cent on the back of the news it was investing in new factories.
"The activity has been driven by news that suggests Rocket Lab is gearing up for significant growth. While Rocket Lab may never utilise the full capacity of its new factory, the fact that it's investing in having this capacity for growth in the long term has investors really pumped."
Earlier, Beck told the Herald that the net US$740m raised with the Nasdaq listing would go to developing the much larger, crew-capable Neutron rocket, scheduled for its first launch in 2024, and expanding his company's space systems division, which it forecasts will account for 40 per cent of revenue by FY2027.
Beck said some of the space system growth could come via acquisitions. By FY2027, the currently loss-making Rocket Lab forecasts operating earnings of US$505m on US$1.57b revenue
While space systems have so far only accounted for a tiny fraction of Rocket Lab's revenue, it has three marquee interplanetary missions on the way. Later this year, a Rocket Lab Photon will ferry a Nasa satellite into lunar orbit. A privately funded mission will see a Photon sent to Venus in 2023. And Rocket Lab has won a Nasa contract to design and build two Photons that will go into orbit around Mars in 2024 to study the Red Planet's atmosphere.