Tag: SPCE

Sky’s the Limit: Investing in the Hottest Stocks Fueling the Space Race

by Fred Fuld III

4 minute read time

The field of space exploration has seen remarkable advances in recent years, driven by a combination of technological innovation, private investment, and renewed interest from governments around the world. From reusable rockets to the development of space-based communication networks, the industry is rapidly evolving, opening up new possibilities for scientific discovery, commercial ventures, and even human settlement beyond Earth.

The rise in space exploration activities has also sparked interest in space-related stocks, offering investors a chance to participate in what many consider the next frontier of human achievement. In this article, we’ll examine some top space exploration stocks—AST SpaceMobile (ASTS), Momentus (MNTS), Rocket Lab USA (RKLB), and Virgin Galactic Holdings (SPCE)—each playing a unique role in the burgeoning space economy.

AST SpaceMobile (ASTS)

AST SpaceMobile, headquartered in Midland, Texas, is at the forefront of developing space-based communication networks. The company’s mission is to build the first space-based cellular broadband network, capable of connecting directly to standard mobile phones without the need for ground-based infrastructure. This groundbreaking technology has the potential to bring high-speed internet access to remote and underserved areas across the globe.

The stock has a $4.7 billion market cap, but generating negative earnings, and falling revenues.

AST SpaceMobile’s BlueWalker 3 test satellite, launched in 2022, represents a significant milestone in the company’s journey to revolutionize global communications. As demand for ubiquitous connectivity continues to grow, AST SpaceMobile is positioned to play a crucial role in expanding internet access worldwide.

Momentus (MNTS)

Momentus, headquartered in San Jose, California, is a space infrastructure company focused on providing in-space transportation and logistics services. The company’s Vigoride spacecraft is designed to transport satellites to their intended orbits after being deployed from a launch vehicle, as well as perform other in-space operations such as satellite repositioning and deorbiting.

Although quarterly revenue growth year-over-year is 752%, the company isn’t generating earnings at this time. However, annual sales growth is up an incredible 933%. The stock has an extremely low market cap of $10 million, and should be considered very speculative.

Momentus aims to address the growing need for flexible and cost-effective space transportation solutions as more small satellites and constellations are launched into orbit. With its innovative technology and strategic partnerships, Momentus is well-positioned to capitalize on the increasing demand for in-space logistics in the new space economy.

Rocket Lab USA (RKLB)

Rocket Lab USA, based in Long Beach, California, is a leader in small satellite launch services, providing reliable and cost-effective access to space for a wide range of customers, including commercial companies, government agencies, and research institutions. The company’s Electron rocket is designed specifically for launching small payloads into low Earth orbit (LEO), and it has successfully completed numerous missions since its first launch in 2017.

Although quarterly revenue growth year-over-year is 71%, the company isn’t generating earnings at this time. The stock has a market cap of $3.26 billion.

Rocket Lab’s advancements in reusable rocket technology and its development of the larger Neutron rocket, which is set to debut in the coming years, demonstrate its commitment to pushing the boundaries of space transportation. Rocket Lab’s ability to deliver rapid and responsive launch services has made it a key player in the growing small satellite market.

Virgin Galactic Holdings (SPCE)

Virgin Galactic Holdings, based in Las Cruces, New Mexico, is a pioneer in the emerging space tourism industry. Founded by Sir Richard Branson, Virgin Galactic aims to make space travel accessible to the public through suborbital flights that offer passengers a few minutes of weightlessness and a breathtaking view of Earth from space. The company’s SpaceShipTwo vehicle has already conducted several successful test flights, and commercial operations are expected to commence in the near future.

The stock is selling for 40% of book value and just 23% of cash. Sales growth year-over year was in excess of 175% and more than 125% quarter-over-quarter. However, the company currently isn’t generating earnings and has a high amount of debt. It has a very low market cap of $186 million.

While space tourism is still in its early stages, Virgin Galactic’s innovative approach and strong brand recognition position it as a leader in this exciting new market. As demand for space experiences grows, Virgin Galactic is poised to play a major role in shaping the future of commercial space travel.

Summary

The companies highlighted in this article—AST SpaceMobile, Momentus, Rocket Lab USA, and Virgin Galactic Holdings—represent some of the most innovative and promising players in the space exploration industry. Each company is uniquely positioned to capitalize on the growing interest in space, whether through propulsion technology, space-based communications, satellite services, in-space logistics, launch capabilities, or space tourism.

These top space stocks offer investors an opportunity to participate in the next great leap forward in human achievement. As advancements in technology continue to drive progress in space exploration, these companies are well-positioned to benefit from the expanding space economy.

Disclosure: Author didn’t own any of the above at the time the article was written.

Identifying Potential Short Squeeze Opportunities on the NYSE

Have you ever been in a situation where you’ve shorted a stock, only to witness a sudden surge, leading to an immediate scramble to close your position?

What occurred is commonly referred to as a Short Squeeze. Even veteran traders have encountered this event. Yet, do they truly grasp what happened?

A short squeeze occurs when a heavily shorted stock experiences a significant surge in buying volume, prompting short sellers to close their positions, thus driving prices higher due to the resulting covers.

Shorting a stock involves aiming to profit from its price decline. Essentially, you borrow shares, sell them, and later repurchase them ideally at a lower price to return. This process occurs electronically, so you won’t physically witness the borrowing and returning; instead, it reflects as a negative share count on your screen.

Short sellers can see profits, but when a stock starts to move against them, rising in value, they often rush to buy shares to close their positions, resulting in a short squeeze. This rapid increase in share prices during a short squeeze can be triggered by any positive news.

Finding a stock for a short squeeze involves identifying certain characteristics that make it a potential candidate: 

  1. Look for stocks with high short interest ratios (the ratio of shares sold short compared to shares available for trading), as these indicate a large number of investors betting against the stock. 
  • Additionally, consider stocks with low float (the number of shares available for trading), as a smaller float can exacerbate price movements, especially if demand suddenly increases.
  • Lastly, monitor stocks with upcoming catalysts such as earnings reports or significant news announcements, as positive developments can trigger short squeezes by prompting short sellers to cover their positions quickly.

Some traders capitalize on this scenario by seeking out stocks with potential for a short squeeze. Below, you’ll find further elaboration on the information provided above:

Short Percentage of Float indicates the portion of shares held short divided by the total float, representing freely tradable shares. A short percentage exceeding 10% to 20% is often seen as high and may suggest potential opportunities for short squeezes.

The Short Ratio, also referred to as Days to Cover or Short Interest Ratio, is a critical measure for identifying potential short squeeze opportunities. It signifies the number of days it would take for short sellers to repurchase their positions based on the average daily trading volume of shares. This ratio is significant because it reveals the challenge short sellers encounter in covering their positions without significantly impacting the stock price. A higher number of days to cover implies a more prolonged squeeze, amplifying potential losses for short sellers.

Short Percentage Increase denotes the percentage rise in the number of short sellers compared to the previous month.

The following are some heavily shorted NYSE stocks that may be worth considering for a short squeeze.

CompanyCompany SymbolShort InterestShort % ChangeShort Interest Ratio
Kohl’s CorporationKSS33.39%3%6.9
Guess?, Inc.GES32.34%4%6.7
C3.ai IncAI31.85%1%4.7
Virgin Galactic Holdings IncSPCE29.18%11%7.5
ChargePoint Holdings IncCHPT28.58%-2%7.9
Carvana CoCVNA28.54%-4%4.2
Big Lots, Inc.BIG28.37%6%5.1

The first stock on the list, Kohl’s Corporation (KSS) has over 33% of its float shorted, an increase of 3% over last month. The short interest ratio is 6.9, which means that it would take the short sellers over six days to cover their position, based on recent average volume.

The second stock on the list, Guess?, Inc. (GES) has over 32% of its float shorted, an increase of 4% over last month. The short interest ratio is 6.7, which means that it would take the short sellers under seven days to cover their position, based on recent average volume. 

An interesting stock on the list, Virgin Galactic Holdings Inc. (SPCE) has over 29% of its float shorted, a large increase of 11% over last month. The short interest ratio is 7.5, which means that it would take the short sellers just over a week to cover their position, based on recent average volume. 

While a stock might display promising ratios and draw considerable short interest, it’s essential to understand that these indicators alone don’t assure an upward price movement, especially in a bear market. Moreover, elevated levels of short interest in a stock may indicate underlying issues or concerns that have led investors to take positions against its performance.

Disclosure: Author had no positions in any of the above at the time the article was written.

NYSE Stocks with the Highest Short Interest

by Fred Fuld III

A short squeeze is a phenomenon that occurs in financial markets when investors who have sold shares of a stock short (i.e., betting that the stock price will fall) are forced to buy those shares back at a higher price than they expected. This can happen when the stock’s price rises sharply, causing losses for short sellers who need to buy the stock to cover their position and limit their losses.

As more and more short sellers try to buy the stock to close out their positions, this increased buying activity can drive the stock price even higher, creating a feedback loop that can lead to a rapid and dramatic increase in price. This can create a challenging situation for short sellers, who may be forced to buy back the stock at a loss, or risk even greater losses if the stock continues to rise. A short squeeze can also create opportunities for long investors who have purchased the stock, as they may be able to sell their shares at a higher price to short sellers looking to cover their positions.

On August 22, 2022, I posted an article about meme related short squeeze stocks, and pointed out Bed Bath and Beyond (BBBY) after it had its big run-up. In exactly one week after the article was posted, the stock jumped by more than 43%.

Another stock that was mentioned was Intercept Pharmaceuticals, Inc. (ICPT), which increased by almost 5% in just two days.

The stock with the biggest short ratio (days to cover), at 14.3 back then, was Heron Therapeutics, Inc. (HRTX). It rose by 9.5% in three days.

When you short a stock, it means that your goal is to make money from a drop in the price of a stock. Technically, what happens is that you borrow shares of a stock, sell those shares, then buy back those shares at a hopefully lower price so that those shares can be returned. This all happens electronically, so you don’t actually see all the borrowing and returning of shares; it just shows up on your screen as a negative number of shares.

Short sellers can be profitable, but sometimes when the stock moves against them, and begins to rise, the short sellers jump in right away to buy shares to cover their positions, creating what is called a short squeeze. When a short squeeze takes place, it can cause the share prices to increase fast and furiously. Any good news can trigger the short squeeze.

Some traders utilize this situation by looking for stocks to buy that may have a potential short squeeze. Here is what a short squeeze trader should take into consideration:

Short Percentage of Float ~ The float is the number of freely tradable shares and the short percentage is the number of shares held short divided by the float. Amounts over 10% to 20% are considered high and potential short squeeze plays.

Short Ratio / Days to Cover / Short Interest Ratio -This is probably the most important metric when looking for short squeeze trades, no matter what you call it. This is the number of days it would take the short sellers to cover their position based on the average daily volume of shares traded. This is a significant ratio as it shows how “stuck” the short sellers are when they want to buy in their shares without driving up the price too much. Unfortunately for the shortsellers, the longer the number of days to cover, the bigger and longer the squeeze.

Short Percentage Increase ~ This is the percentage increase in in the number of short sellers from the previous month.

The following are some heavily shorted tech stock that may be worth considering.

CompanyTickerShort % of FloatShort % ChangeShort Interest Ratio
Silvergate Capital CorpSI76.92%-6%1.2
Carvana CoCVNA52.82%0%1.8
Wayfair IncW33.65%0%4.2
Big Lots, Inc.BIG32.44%-1%7
C3.ai IncAI27.31%5%1.4
Fubotv IncFUBO26.57%-27%3.2
Virgin Galactic HoldingsSPCE25.92%9%5.9
Bakkt Holdings IncBKKT24.53%6%4.3
AMC EntertainmentAMC24.39%1%3.7
Cinemark Holdings, Inc.CNK23.73%0%7.6

The third stock on the list, Wayfair (W) has over 33% of its float shorted, with no change in short interest over last month.

The short interest ratio is 4.2, which means that it would take the short sellers over 4 days to cover their position, based on recent average volume.

Just keep in mind that just because a stock has good earnings ratios and is heavily shorted, doesn’t mean that the stock will go up, especially in a bear market. Also, stocks that are significantly shorted may be shorted for a reason.

Disclosure: Author didn’t own any of the above at the time the article was written.

Top Space Exploration Stocks

by Fred Fuld III

According to Morgan Stanley, “Global space could be a $1 trillion industry by 2040.” .

Have you ever thought about traveling to the moon or Mars? You now have that opportunity.

For example, Elon Musk’s SpaceX is selling tickets to travel around the Earth. Richard Branson’s Virgin Galactic (SPCE) plans to to provide suborbital spaceflights to space tourists.. Jeff Bezos, founder of Amazon (AMZN) has created Blue Origin for space tourists.

If you are looking for individual stocks, here are several you might want to consider:

•Virgin Galactic Holdings (SPCE)

•Maxar Technologies (MAXR)

•Aerojet Rocketdyne (AJRD)

•Rocket Lab USA (RKLB)

•Momentus (MNTS)

•Virgin Galactic Holdings (SPCE) is developing commercial spacecraft to provide suborbital spaceflights to space tourists. It was originally a SPAC stock.

Last year, Virgin Galactic announced that it opens ticket sales to the public, with the price of a reservation at $450,000.

The company is currently negative earnings, although long term annual growth estimate for earnings over the next five years is 19.4%.

Maxar Technologies (MAXR) designs and manufactures satellites and spacecraft components, especially those used in high-resolution satellite imagery.

The stock has a forward price to earnings ratio of 32, with an earnings per share growth this year of 183%, and an EPS growth next year of 379%.

A better alternative might be to allocate your funds to one of the space ETFs.

The exchange traded fund Direxion Moonshot Innovators ETF (MOON), which is up 23.91% so far this year. It has an expense ratio of 0.65 and pays a yield of 2.43%.

Procure Space ETF (UFO), founded in 2019, has increased by 6.39% this year. The expense ratio is 0.75, and the yield is 2.94%.

SPDR Kensho Final Frontiers ETF (ROKT) has been around since 2018. It is up 8.48% so far this year, but it also pays a yield of 0.5%. It has an expense ratio of o.45.

The youngest space ETF on the block is ARK Space Exploration & Innovation ETF (ARKX), which went public recently. The fund is up 14.17 year-to-date, and th expense ratio is 0.7%.

Hopefully, one of these stocks or ETFs will take your portfolio to the moon.

Disclosure: Author owns AMZN.

SPACs for Tax Selling Bounce Opportunities

by Fred Fuld III

A tax selling stock is a stock that is currently selling for a low price but was trading at much higher levels earlier in the same year, or even earlier years.

When the year end approaches, many investors utilize a strategy commonly referred to as tax harvesting , which is the selling of stocks at a loss to offset any gains that may have been made during the year.

Because of the heavy selling, the prices of stocks that have dropped substantially tend to sink far more than what would usually take place during the rest of the year. Then in January, with the strong selling over with, these stocks can recover somewhat.

So traders and investors are on the lookout for tax selling bounce stocks that are trading at much lower prices, hoping for a bounce in January, once the tax selling is over.

One type of stock that has been significantly hit were the SPACs, the special purpose acquisition companies that were so popular a few years ago.

These vehicles, also known as blank check companies, made it easy for private companies to go public. Some of the more well known SPACs include DraftKings (DKNG), down 49% year-to-date, and Virgin Galactic (SPCE), down 66%.

Unfortunately, the returns haven’t been so great, with many of them experiencing losses of over 90% from their highs.

Here are some additional SPACs that are down over 50% year-to-date. You will notice that several of them are electric vehicle companies.

CompanySymbolYTD Return
ArrivalARVL-96%
Shift TechnologiesSFT-93%
IronNetIRNT-92%
Ree AutomotiveREE-91%
CanooGOEV-82%
BuzzFeedBZFD-80%
LucidLCID-77%
AppHarvestAPPH-77%
WeWorkWE-75%
SoFiSOFI-73%
Lordstown MotorsRIDE-59%
FiskerFSR-54%
PolestarPSNY-50%

A couple things to remember. There is no guarantee that these stocks will bounce back in January, as there is usually a reason the stocks dropped so much in the first place.

Also, timing is everything with these tax-selling stocks. Sometimes the sellers are done selling in mid-December, sometimes they wait until year end.

Hope you get a bounce in your portfolio.

Disclosure: Author didn’t own any of the above at the time the article was written.

Worst Performing SPACs: Are They Dead or Will They Rebound?

by Fred Fuld III

A SPAC is a Special Purpose Acquisition Company, also known as a blank check company. It is a company created specifically to raise money as a publicly traded company in order to finance a merger or acquisition opportunity within a set timeframe, usually two years.

They have no operations but go public with the intention of merging with or acquiring a company with the proceeds that were raised from the SPAC’s initial public offering. The SPACs are generally sold at $10 a share or often in $10 units which includes of one share of common stock and one or more out-of-the-money warrants or a fraction of a warrant. The units, stocks, and warrants usually start trading on either the NYSE or NASDAQ.

Probably the most famous SPAC (which no one remembers the original name of but most remember the new name after the merger) was Social Capital Hedosophia (former symbol: IPOA). This is the company that merged with Richard Branson’s Virgin Galactic (SPCE), the space travel company.

Unfortunately for most investors who invested in these SPACs, the investment hasn’t turned out well, especially when measured from the stock’s high to todays price. Many came out at $10, then started dropping and never looked back. Other SPACs jumped way up in price, then later tanked way below the original $10.

For example, Romeo Power (RMO), a southern California manufacturer of lithium ion battery modules, came out at $10 a unit. Some poor soul paid 38.90 a share right after Christmas in 2020. What a Christmas present.

The stock is now trading at 44 cents a share. This is a drop of 98.9% in share price.

Another example is a company called Ucommune International Ltd (UK), a provider of agile office spaces in China. An investor paid 241.40 a share on a split adjusted basis a couple weeks before Thanksgiving in 2020. Happy Thanksgiving. The stock is now 3.71 per share, a drop of 98.2%.

To explain how the split worked on this stock, there was a 1 for 20 split on April 22, 2022. That means that if you had 100 shares to start with, you would end up with only 5 shares. So the investor who paid the high price, if had a 100 shares, actually would have paid 12.06 per share, for a total of $1206. However, after the split, he would have only 5 shares at 3.71 per share, or a total value of only $18.55.

So here is a list of SPACs that have fallen dramatically.

SYMBOL LOSS
RMO 98.9%
UK 98.2%
LOTZ 96.6%
MILE 95.4%
DAVE 95.1%
UPH 94.8%
RIDE 94.5%
SFT 93.9%
IRNT 93.0%
NKLA 92.8%
MNTS 92.2%
GOEV 90.7%
GMTX 90.4%
SPCE 88.6%
ATIP 88.3%
MAPS 88.3%
VIEW 86.9%
ME 85.4%
LVOX 84.7%
BBAI 70.6%
MYPS 64.6%

Disclosure: Author didn’t own any of the above at the time the article was written.

How to Invest in Space Exploration

by Fred Fuld III

If you have ever thought about traveling to the moon or to Mars or even just to the Earth’s atmosphere over 50 miles, that opportunity may be on the horizon.

Elon Musk’s SpaceX is selling tickets to travel around the Earth. For only $1,000, you can put a deposit down on a space flight with Virgin Galactic (SPCE). Jeff Bezos, founder of Amazon (AMZN) has created Blue Origin, which is attracting space tourists.

However, if you are looking to invest in the space industry, there are many stocks to choose from but a better alternative may be to invest in one of the space ETFs.

The exchange traded fund Direxion Moonshot Innovators ETF (MOON), which is up 19.85% so far this year. It has an expense ratio of 0.65. It was established in November of last year.

Procure Space ETF (UFO), founded in 2019, has increased by 18.99% this year. The expense ratio os 0.75.

SPDR Kensho Final Frontiers ETF (ROKT) has been around since 2018. It is up 5.27% so far this year, but it also pays a yield of 0.47%. It has an expense ratio of o.45.

The youngest space ETF on the block is ARK Space Exploration & Innovation ETF (ARKX), which went public a couple days ago.

If you are looking for individual stocks, Virgin Galactic Holdings, Inc. (SPCE) and Maxar Technologies Inc. (MAXR) are a couple companies that appear in at least two of the space ETFs.

Hopefully, one of these ETFs will take your portfolio to th moon.

Disclosure: Author owns AMZN.

What is a SPAC and Why Should You Care?

by Fred Fuld III

If you haven’t heard the term, SPAC, as an investor, you should at least be aware of what it is. SPAC stands for Special-Purpose Acquisition Company, which is a company created specifically to pool funds in order to finance a merger or acquisition opportunity within a set timeframe, usually two years.

SPACs are sometimes referred to as corporate shells or blank-check companies. They have no operations but go public with the intention of merging with or acquiring a company with the proceeds that were raised from the SPAC’s initial public offering. The SPACs are currently sold in $10 units which includes of one share of common stock and one or more out of the money warrants or a fraction of a warrant. The units, stocks, and warrants usually start trading on either the NYSE or NASDAQ.

Probably the most famous SPAC (which no one remembers the original name of but most remember the new name after the merger) was Social Capital Hedosophia (former symbol: IPOA). This is the company that merged with Richard Branson’s Virgin Galactic (SPCE), the space travel company.

The most recent SPAC transaction hitting the news is the merger of the SPAC called Diamond Eagle Acquisition Corp. (DEAC) with DraftKings (DKNG), one of the world’s largest daily fantasy sports contest and sports betting provider.

Here are a list of SPACs that have announced mergers:

SPAC Symbol Buying Business
8i Enterprises Acquisition Corp. JFK Diginex blockchain
Act II Global Acquisition Corp. ACTT Merisant sugar substitute
Arya Science Acquisition Corp. ARYA Immatics cancer immunotherapies
Diamond Eagle Acquisition Corp. DEAC DraftKings fantasy sports
Far Point Acquisition Corporation FPAC Global Blue airport sales tax refund kiosks
Gordon Pointe Acquisition Corp. GPAQ HOF Village Pro Football Hall of Fame
KBL Merger Co. IV KBLM CannBioRx Life Sciences biotech
Legacy Acquisition Corp. LGC Blue Valor digital marketing
Leisure Acquisition Corp. LACQ Gateway Casinos gambling
Monocle Acquisition Corporation MNCL AerSale Aviation Aftermarket
Mudrick Capital Acquisition Corporation MUDS Hycroft Mining gold & silver
Nebula Acquisition Corp. NEBU Open Lending automotive finance
Proficient Alpha Acquisition Corp. PAAC Lion Financial Group financial services
Pure Acquisition Corp. PACQ HighPeak Energy oil & gas
VectoIQ Acquisition Corp. VTIQ Nikola zero emissions trucks
Wealthbridge Acquisition Limited HHHH Scienjoy China streaming video

Although the SPACs are a way of getting an early investment in currently private companies, they do carry risk.

Happy investing!

Disclosure: Author didn’t own any of the above at the time the article was written.