Investing in the Next Space Race Through Rocket Lab

March 8, 2021
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Rocket Lab is an American aerospace manufacturer that engages primarily in the growing market for small satellite launches.

Founded in New Zealand in 2006, the company later moved its headquarters to Long Beach, California, and is registered in the United States as a private company. Rocket Lab’s launches are carried out at its “Launch Complex 1” on the Mahia Peninsula of New Zealand’s North Island.

Rocket Lab is going public in the second quarter through a merger with Vector Acquisition Corporation (NASDAQ: VACQ).

Rocket Lab is Already a Proven Revenue Driver

Vector Acquisition Corporation is a special purpose acquisition company (SPAC) with a difference. While most SPAC businesses acquire unproven companies, Rocket Lab already has a successful revenue stream. This should allow for the rapid growth of the newly merged company in the coming years.

Rocket Lab has already launched 18 rockets in its relatively short history, with the deployment of 97 satellites. The company has proven its first-stage rocket recovery technology, which allows it to reuse its hardware on multiple missions. This will keep operating costs contained in the years moving forward.

As a technology leader in the small-rocket market, Rocket Lab has a significant advantage over its competition. Its proprietary rocket design allows for multiple satellites to rideshare a rocket, using a third-stage booster. This significantly increases the profit and revenue that can be generated through a single launch.

Financials look solid moving forward. The company expects that its EBITDA margin will turn positive in 2023, cash flow will do the same in 2024, and revenue will exceed $1 billion per year by 2026.

Rocket Lab will be valued at a pro forma enterprise value of $4.1 billion when it goes public.

How to Buy Shares in Rocket Lab

Rocket Lab will be listed on the NASDAQ exchange during the second quarter, under the symbol RKLB. Shares will be available publicly. 82% of existing equity will be retained by private shareholders when the company goes public.

Investors could also buy VACQ shares today which will be converted when the new company is formed.

Any investor looking to leverage the satellite launch market, which is worth around $350 billion today, can consider Rocket Lab as one of the best options in 2021. Its unique technologies and proven launch success set it apart from competitors like SpaceX, Virgin Galactic, and AST SpaceMobile.

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