The hottest investment group in the market, ARK Investment Management, recently announced that it plans to launch the ARK Space Exploration ETF. It is not known yet exactly when the ETF launch will be, but there has been much speculation about the stocks that will be included, and a number have made sharp moves.
One name that is moving today is Virgin Galactic Holdings (SPCE) , but that probably has more to do with its large short position than anything else.
I've been looking closely at a SPAC that is merging with a 'space' play. The SPAC is New Providence Acquisition (NPA) , and it is merging with AST SpaceMobile. AST SpaceMobile is building a space-based cellular broadband network. The company will offer broadband service from space to smartphones. AST SpaceMobile currently has one test satellite in orbit and plans additional launches in 2022. It should start offering commercial services in 2023.
Satellite broadband has the advantage over 5G of being completely wireless. There is no need to have a cell tower connected to a fiber internet source.
The investor presentation can be found here.
Once the merger is completed, the new entity is expected to have an enterprise value of about $1.4 billion and an equity value of around $1.8 billion at closing. The deal will provide AST with nearly $462 million in gross proceeds after a PIPE.
AST's chairman and CEO, Abel Avellan, said, "Universal broadband access has become a global necessity, and we are uniquely positioned to leverage our innovative technology solution and efficient business."
Technically the chart does not look very attractive right now, but I am starting a position that I plan to add to as it develops. The stock should start to see better action once the plan of merger is approved by stockholders of NPA and the closing date approaches. It is expected that this will be done in the first quarter of the year.
I don't know if the ARK Space ETF will be buying shares of NPA, but it is the sort of visionary technology that should fit in well.
