Buying More Rocket Lab After $1.9 Billion Acquisition Update
The aerospace firm announced a at-the-market share sale.
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Aspen Aerogels (ASPN)
Aspen Aerogels announced on Monday that the firm’s management will meet with Craig-Hallum at an event hosted by that firm on Tuesday, September 22.
Ocular Therapeutix (OCUL)
On Tuesday morning, Ocular Therapeutix announced that the firm had completed its pre-new drug application, or NDA, and has met with the FDA for the firm’s investigational product candidate Axpaxli. This candidate is being considered for the treatment of wet age-related macular degeneration.
Based on the pre-NDA meeting, the company’s expectations for the Axpaxli NDA package remain consistent with its prior FDA communications, including the May Type C meeting. Ocular Therapeutix remains on track to submit this NDA in the fourth quarter of this calendar year.
Ondas Inc (ONDS)
On Monday, analyst Austin Bohlig of Needham reiterated his “buy” ratings as well as his $19 target price. Bohlig is rated at one-half star out of five stars by TipRanks. He has compiled just a 26% success rate over the past two years while generating an unsightly average return of -8.6%. Bohlig is in decent company though. Readers will recall from Monday’s note that analyst Max Michaelis of Lake Street also reiterated his “buy” rating on ONDS as well as his target price of $19. Michaelis is rated at four stars out of five at TipRanks. Over the past two years, he has compiled only a 44% success rate but has generated an impressive average return of 25.5%.
Rocket Lab (RKLB)
On Tuesday morning, Rocket Lab announced the completion of several milestones to fully finance the firm’s pending acquisition of Iridium Communications (IRDM). Rocket Lab has completed its at-the-market share sale, raising approximately $1.944 billion in gross proceeds through the issuance of 29.3 million shares. That dilution event is now over. Rocket Lab intends to use those net proceeds to fund cash payments meant for the Iridium acquisition. If Rocket Lab does not consummate the Iridium acquisition or if it has excess proceeds from the offering of those shares, the company intends to use the net proceeds to fund future growth and for general corporate and working capital purposes.
For background, readers may recall that on September 15, Iridium entered into an amendment to its existing term loan facility for its outstanding $1.775 billion term loans to obtain consent from the requisite lenders to, among other things, amend the definition of “change of control” under the credit agreement to carve out Rocket Lab’s pending acquisition of Iridium.
Rocket Lab USA, Rocket Lab’s primary operating subsidiary and anticipated parent company of Iridium, will provide an unsecured guarantee of the Iridium Term Loan upon the closing of this acquisition. The company also terminated its $3.6 billion debt commitment for a senior secured debt bridge facility it had entered into in connection with the Iridium Acquisition merger agreement on June 28. The acquisition of Iridium is expected to be completed sometime in mid-2027.
Trading
The portfolio has taken its long position in Planet Labs (PL) up to a round lot. We’ll let that sit for a bit and see if the stock can dig itself out of this hole. In the meantime, we are taking our target price for that name down to $26 from $33.
The news in Ocular Therapeutix (OCUL) is positive and is what the portfolio has been waiting on. That said, there is a very real chance that the portfolio’s shares will be called away at $11 in a week and a half. Should that not happen, the portfolio will likely take its $11 target price higher ($11 is our strike price). The news in Rocket Lab (RKLB) has hurt the stock, but is now, I believe, completely reflected in share price. The portfolio would like to grow that position at these prices. The portfolio will also continue to execute its exit from Alto Ingredients (ALTO).
Monday’s Intentions vs Actual Trades
Intention: Sell 25 shares of ALTO at or close to the last sale of $4.04
Actual trade: Sold 25 shares of ALTO at $4.02
Intention: Purchase 10 shares of (PL) at a limit price of $16.40 or better
Actual trade: Bought 10 shares of PL at $16.15
Tuesday’s Intentions
Sell 25 shares of ALTO at or close to the last sale of $3.96
Purchase 2 shares of RKLB at or close to the last sale of $63.60
Current Positions
Long 50 shares of ALTO at $4.425. Target price: canceled. Last sale: $3.96.
Long 60 shares of ASPN at $5.1083. Target price: $10. Last sale: $4.94.
Long 100 shares of (EVLV) at $5.7883. Target price: $8.50. Last sale: $5.28.
Long 100 shares of OCUL at $8.3545. Target price: $11. Last sale: $10.94.
Short one OCUL $11 September 18 call at $1.65. Last sale: $0.25.
Long 250 shares of ONDS at $8.0932. Target price: $12. Last sale: $7.23.
Long 100 shares of PL at $20.3367. Target price: $26. Last sale: $16.20.
Long 35 shares of (PTON) at $5.1236. Target price: $9. Last sale: $4.95.
Long 5 shares of RKLB at $77.936. Target price $97. Last sale: $63.60.
Long 120 shares of (SOFI) at $16.0609. Target price: $24. Last sale: $17.48.
Short one SOFI $22 November 19 call at $1.20. Last sale: $0.50.
Long 50 shares of (SWBI) at $14.0414. Target price: $19. Last sale: $13.25.
Long 70 shares of VELO at $11.3871. Target price: $18. Last sale: $10.11.
Cash: $245.13.
Portfolio value: $9,673.54, -3.3% from inception on March 24.
At the time of publication, Guilfoyle was long ALTO, ASPN, EVLV, OCUL, ONDS, PL, PTON, RKLB, SOFI, SWBI and VELO.
