April 1 (Reuters) – Shares of aerospace companies jumped on Wednesday as mounting anticipation of a blockbuster IPO from Elon Musk’s SpaceX stirred hopes that the industry could see a renewed wave of investor interest.
The startup giant has confidentially filed for its listing, a person familiar with the matter told Reuters, setting the stage for a debut that could catalyze the next growth phase for the space industry.
“It isn’t unusual for the entire sector to rally because some investors will interpret the IPO as very positive for the industry,” said Peter Andersen, founder of Andersen Capital Management.
“The timing is also coincidental with the launch this evening of the U.S. space escapade,” he added, referring to NASA’s Artemis II mission, in which four astronauts will be sent on a 10-day flight around the moon — the most ambitious U.S. space mission in decades.
Shares of Rocket Lab and Planet Labs gained 5.5% and 11%, respectively. Intuitive Machines added 10.5% and Howmet Aerospace rose 4.2%.
Satellite communications company EchoStar, which owns SpaceX shares, advanced 5.7%. Musk’s electric-vehicle company Tesla gained 2.7%.
Exchange-traded funds tracking the aerospace sector such as Ark Space & Defense Innovation and Procure Space also climbed 2.9% and 4.9%, respectively.
Destiny Tech100, a fund that invests in privately owned technology heavyweights, surged 4.9%.
SET TO SOAR HIGHER
A marquee debut like SpaceX can reset how investors value an entire industry, directing capital flows to a sector that is already gaining traction thanks to falling launch costs, expanding satellite networks and growing interest in data center infrastructure in orbit.
Space companies with steady government contracts have also drawn interest due to the growing reliance on satellite infrastructure for defense.
Space-based technologies are increasingly shaping modern conflict, from satellite-enabled communications to surveillance. The tech was widely used in the Venezuela strike and in the U.S.-Israel war against Iran this year.
SpaceX was one of the early companies to bag contracts from NASA in the early 2000s, following which a flurry of smaller companies and startups have emerged, displaying specific capabilities appealing to the U.S. government.
For instance, Intuitive Machines was recently awarded a $180.4 million contract to deliver seven science and technology payloads to the moon’s south pole by NASA, while Rocket Lab and Planet Labs have signed deals with space agencies in Japan and Europe.
Another boost for the industry could come from Musk’s popularity among retail investors.
Musk is mulling allocating as much as 30% of the company’s shares in the IPO to retail investors, Reuters has reported.
“I do think SpaceX stock is going to pop on day one because the retail guys are going to chase it like crazy,” said Matthew Tuttle, CEO of Tuttle Capital Management.
However, the startup “has been private way longer than most companies, which means way more returns have accrued to the private investor and you wonder what’s left for the public investor,” he cautioned.
(Reporting by Johann M Cherian, Akash Sriram, Shashwat Chauhan and Niket Nishant in Bengaluru; Editing by Sriraj Kalluvila, Devika Syamnath and Maju Samuel)
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