🚀 Axiom Facing Liquidity Issues

Plus DirecTV and Dish merger talks, $LUNR's $4.8B IDIQ, Wall Street upgrades/downgrades, and more! The latest space investing news and updates.

September 20, 2024

The Space Scoop

Week Ended 09.20.2024

Happy Friday! It was a busy week for news due to World Space Business Week in Paris (so expect a lot of links down below) and the Federal Reserve cut interest rates by 50bps. Big news was reported out of Axiom this week coupled with extreme investor optimism for Intuitive Machines stock. The Q3 earnings calendar has also officially begun.. Lets dive in. 

Market Max-Q

Forward

Top Stories

1) Axiom Space is facing financial headwinds amidst a reported severe cash crunch.

  • On Tuesday, Forbes released an article giving outsiders a peek into the high profile space startups financials. Despite $500M in total fundraising to date, Axiom is seeking to close a new funding round before 2024 ends.

  • Like any startup with too much cash, Axiom began over hiring and "ran [the company] like a big government program instead of the resource-constrained startup it really was." With ~1,000 employees, Axiom has undergone layoffs and is asking employees for voluntary pay cuts in return for stock.

  • “The fundraise rounds were never enough to keep us ahead of the curve and the revenue certainly wasn't closing the gap,” a former executive told Forbes. “With every round...you pay SpaceX, you pay Thales Alenia, you pay your bills and then it's gone."

  • There also appears to be a lack of business case for ISS tourist trips, with one flight bringing in ~$150M of revenue but incurring the company $167M of costs due to SpaceX.

  • This is definitely not what the space industry wants to hear from an important name, especially one who is planning to build an ISS replacement. More to come..

 2) DirecTV ($T) and Dish ($SATS) are rumored to be in talks to merge yet again.

  • Over the weekend, Bloomberg reported rumors that AT&T subsidiary and TPG owened DirecTV and Echostar subsidiary Dish are in nascent discussions about merging the two satellite-TV businesses amid pressure from cord cutting and streaming service pressures. The deal would create the largest US pay-TV distributor at nearly ~20M subscribers.

  • A merger of this size would likely draw US regular scrutiny. As a reminder, the DoJ previously blocked a merger between the two companies in 2002 due to antitrust concerns.

  • “Rumors about a potential transaction involving DIRECTV and Dish are nothing new, but we don’t comment on rumors and speculation,” a spokesperson for DirecTV told TheWrap.

  • SATS shares finished the week +3% higher.

 3) Intuitive Machines ($LUNR) won a NASA $4.2B IDIQ contract and shares go to the moon. 

  • On Wednesday after market close, NASA awarded IM a Near Space Network (NSN) contract for communication and navigation services for missions in the near space region (aka earth's surface to beyond the moon).

  • The contract has a base period of five years, with an additional five-year option period and a maximum potential value of $4.82B. The initial contract is worth $150M (most investors looked past this part).

  • Shares jumped +38% the following day and finished out the week +49% higher.

In Other News

Scotiabank Raises AST SpaceMobile Price Target 

(Reddit)

The Canadian firm rates $ASTS 'Sector Outperform' and raised their price target to $45.90 per share stating: "As SpaceX struggles with delicate regulatory issues (unable to meet EPFD limits), ASTS is positioned to become the world’s first SCS provider. . . We no longer think that there is a 'speculative' nature to the thesis."

JPMorgan Downgrades Viasat to Neutral 

The firm lowered its price target to from $29 to $15 per share, citing the recent Starlink deal with United Airlines ($UAL), estimating the loss of ~500 United planes will cost Viasat $60-$80M in revenues. “A well heeled Starlink is difficult to bet against long-term even if impacting share of new wins/RFPs."

Morgan Stanley Downgrades Virgin Galactic 

The firm lowered its price target from $35 to $5 per share, citing the stock is “entering the valley” after retiring VSS Unity earlier this year and flights on hold for years until Delta spacecraft can begin flying. They also note $SPCE's recent -58% stock performance as a red flag following the recent reverse stock split.

Ex-Im Bank Expands Space Pipeline to $9.5B 

After reopening in 2019, the U.S. export credit agency that provides direct loans, debt guarantees and other financial support for U.S. exporters has seen a more than doubling of space-related projects seeking financial support. “We are actively underwriting $800M worth of space transactions as we speak,” said VP and Vice Chair Judith Pryor.

Momentus Raises $2.75M Private Placement 

$MNTS entered into a securities purchase agreement "with a single US institutional investor" for the purchase 5.0M shares of common stock at $0.55 per share. The proceeds are expected to be used accounting and tax advisor payments, repayment of principal on indebtedness, capex, and working capital needs.

Karman Industries Emerges from Stealth 

The startup, which plans to significantly reduce costs and eliminate onsite scope 1 emissions by transitioning manufacturing operations from natural gas to electricity, raised $4M in pre-seed funding. The round was led by Riot Ventures in partnership with Space VC. 

Chart of the Week

Emerging Lunar Industrial Base: Per BryceTech, companies with announced lunar business plans per their latest report.

(Source)

Links

• Telesat ($TSAT) Completes $2.54B Funding Agreements for Lightspeed Satellite Constellation• Planet ($PL) Signs Multi-Year Contract With the German Space Agency at German Aerospace Center• Mynaric ($MYNA) Advances Volume Production Ramp of CONDOR Mk3• Space Perspective Successfully Completes Development Flight 2• SpaceX Starlink Has 2,500 Airplanes Under Contract After United ($UAL) Deal• BlackSky ($BKSY) Awarded 7-Figure Space Domain Awareness Contract With HEO• Sidus ($SIDU) Enhances LizzieSat Constellation Operations via Agreement With Neuraspace• Iridium ($IRDM) Board Approves Additional $500M Share Repurchase Program

Opinion

• How Europe and the US Can Regain Space Power• Small Launch Vehicles Press Ahead Despite Market Setbacks• Planet ($PL) Commercial Revenue Is Softening• Rocket Lab ($RKLB): 8x Sales Rocket Fuel• Intuitive Machines ($LUNR): To the Moon• Virgin Galactic ($SPCE): I Like the Vision, but Execution Is the Key

Earnings Calendar

• $NOC: Oct 24 - Before Market Open