Rocket Lab debuts on Nasdaq, worth US$5.2b

Thursday, 26 August 2021

Rocket Lab founder Peter Beck rings the Nasdaq's opening bell on August 26.

Rocket Lab has had a smooth landing on the Nasdaq stock exchange with its shares quickly settling at a price that values the space launch company at US$5.2 billion (NZ$7.4b).

Investors who tried to get in ahead of the float by investing in the shell company that Rocket Lab merged with to achieve the listing may have been disappointed as hopes of a quick profit were dashed.

Both some spoken to by Stuff said they weren’t concerned as they were investing for the long term.

The company’s shares defied expectations of very high volatility and closed at US$10.43 at 9am on Thursday, New Zealand time, after quickly slipping from their opening price of US$11.58.

About 5.6 million shares worth just under US$60m changed hands on the first day of trading according to MarketWatch.

* Nasdaq listing to leave Peter Beck with $771m stake in Rocket Lab

Rocket Lab chief executive Peter Beck says the company has simplified access to space.

* Rocket Lab booked for mission to Mars

Rocket Lab has raised US$777m from the float, mostly by selling new shares at US$10 each, but also by tapping into cash that had been sitting in the shell company it merged with, Vector Acquisition.

The New Zealand founded firm, which is now a US company, intends to use much of the proceeds of the initial public offering to develop and manufacture a new range of heavier “Neutron” rockets.

It has racked up losses of US$203m to date and expects to continue making losses for “several years”.

Chief executive and founder Peter Beck remotely rang the opening bell at Nasdaq to mark the company’s debut as a publicly-traded company.

Beck told the exchange the company’s existing Electron rocket and Photon spacecraft had “simplified space making it easier and affordable for companies, scientists, researchers governments, academics and entrepreneurs alike to get their ideas into orbit”.

“That has opened up a ‘solar system of opportunities and possibilities’ for innovation, exploration and infrastructure in space for a better Earth,” he said.

Beck retains a 13.1 per cent shareholding in Rocket Lab, worth about US$680m, or just shy of NZ$1b.

The float has also turned more than 100 of Rocket Lab’s other 600 – mostly young – employees into millionaires.

Auckland real estate agent Rickie Mozessohn said he bought close to 600 shares prior to the float by investing in Vector through Wellington share broker Hatch, but he hadn’t stayed up to watch the share price.

Mozessohn, who also owns shares in other Nasdaq and NZX-listed firms, said he researched and bought into the Rocket Lab story as a long-term investment in an industry he loved.

“I am not really concerned about the ups and downs of last night.”

He was staying up to date on Rocket Lab through the community board on Hatch’s Facebook page and bulletins from the broker which he said were doing a good job of keeping investors informed.

“I think of Rocket Lab as an awesome company. Peter Beck is ‘the man’,” he said.

“Do I think it is a risky investment? Absolutely not.”

Picton dive company director Jessie-Lee Fishburn who described herself as “a rocket fan from way back”, said she began investing more than $20,000 prior to the float, starting in March when the Vector deal was announced.

Investing had been easy, she said.

She was hoping for steady slow growth, rather than “mad ups and downs”, and said it was not just the potential financial returns that persuaded her to invest.

“It is so exciting watching them do a good job; as a New Zealand watching another New Zealander put a lot on the line and the high levels of innovation and dedication.”