Firefly Aerospace hits $9.8 billion valuation in Nasdaq debut as shares takeoff

Time of India

4 days ago

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Space scrutiny
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Firefly Aerospace secured a valuation of $9.84 billion after its shares surged 55.6 per cent in their Nasdaq debut on Thursday, as investors continue to pour capital into companies aiding the expansion of the US space and defense program.The stock opened at $70 apiece compared with the IPO price of $45, marking a striking turnaround for a once-beleaguered company now riding high on its lunar business and lucrative military-space prospects. Shares of the Texas-based firm went as high as $71.16 apiece.Firefly, which became the first private enterprise to achieve a successful lunar landing five months ago, raised $868.3 million in an upsized IPO at $45 per share, above its already bumped up marketed range.In its IPO, the largest US listing this year by a space tech firm, Firefly was valued at $6.32 billion - ahead of both Trive Capital-backed Karman Holdings and Voyager Technologies, which went public earlier this year."We at Firefly have had a lot of successes toward going public," CEO Jason Kim told Reuters on Thursday, noting the company's breakthrough moon landing, a rapid Pentagon launch with its medium-sized Alpha rocket in 2023 and a burgeoning business line that will offer maneuverable space vehicles for the US Space Force.US IPOs have picked up pace after tariff-driven volatility hampered listings in April, reigniting a long-awaited recovery of first-time share sales."I think we will continue to see strong debuts for large-cap IPOs for the remainder of the year," said Ross Carmel, partner at law firm Sichenzia Ross Ference Carmel.Firefly has come a long way from a tumultuous past, including a bankruptcy in 2017 and a CEO ouster last year.Its bankruptcy led to billionaire Ukrainian investor Max Polyakov's Noosphere Ventures acquiring a majority stake in the company that, four years later, was forced to be sold to AE Industrial Partners over national security concerns raised by the US government.Formed in 2014 by Tom Markusic, now its chief technology officer, Firefly started as a launch company centered on its medium-sized, 95-foot-tall Alpha rocket. It has since expanded into spacecraft and lunar lander business to provide mission services for governments and a nascent lunar market."The best companies go through hard times and challenges, but the best companies get back up and then continuously improve," said Kim, who took the helm at Firefly last year after leading the Boeing-owned small satellite firm Millennium Space Systems.While Houston-based Intuitive Machines was the first private firm to reach the moon last year, its Odysseus lander made a lopsided touchdown, foiling most of its onboard customers' mission objectives.Firefly's Blue Ghost landed safely on the moon in March, a milestone for a scrappy unit that was once tertiary to other business goals. It was also a breakthrough moment for NASA and its contracting model designed to stimulate private missions to the moon."Firefly has already demonstrated responsive launch capabilities and delivered a lunar payload - proof points that matter to the Space Force and NASA," said Ali Javaheri, emerging technology analyst at PitchBook.The company had a backlog of roughly $1.1 billion and more than 30 planned launches under contract as of March 31."Investors will likely focus on backlog growth, gross margin trends as production scales, and Firefly's cash runway post-IPO," Javaheri said.The company, however, expects to incur net losses for the next several years, according to filings.Rising geopolitical tensions and deteriorating international relations have put a spotlight on space and defense contractors, as US President Donald Trump aims to bolster military and civil space programs with the efficiencies of for-profit companies.Elon Musk's SpaceX - which has about $22 billion in government contracts - has grown critical to the global satellite network, potentially managing a crucial element of the "Golden Dome" missile defense shield planned by Trump.SpaceX's rapid growth in the space industry and Musk's latest tensions with Trump, however, have prompted officials to open talks with other rocket and tech manufacturers, with some citing national security concerns around concentrated dependency.Kim said Firefly is eyeing a potential role in the Golden Dome program, noting its Alpha rocket could be used to launch test missile targets for the system or its Elytra spacecraft platform could host space-based missile interceptors envisioned by the program."We will be able to rate up our production line to meet that growing demand," Kim said of Golden Dome.Firefly has had backing from US defense contractor Northrop Grumman in a partnership to jointly build a bigger rocket named Eclipse, set for a debut launch from Wallops Island, Virginia, as early as 2026."Northrop Grumman's involvement signals alignment with national security priorities, while Mitsui's presence opens pathways to Asia and helps shore up supply-chain resilience," PitchBook's Javaheri said.Northrop is one of the three suppliers of solid rocket motors to the US.