Rocket Lab Stock Offers Pure-Play on Rockets

March 2. 2021. 6 mins read

Companies that go public without revenues significantly underperform the market. At least, that’s what University of Florida professor Jay R. Ritter thinks as his research shows that a company with no revenues will underperform the market by nearly 30% over the first three years of trading (hat tip to StrictlyVC.) Then, there are special purpose acquisition companies (SPACs).

What makes the SPAC vehicle unique isn’t that it gives retail investors the short end of the stick. It’s that SPACs include something that the traditional IPO process doesn’t allow – outlandish forward-looking financial projections. SPAC investor decks spend very little time talking about the sorts of things risk-averse investors care about in favor of painting grandiose picture of hockey-stick revenues and lots of delicious fictional EBITDA numbers for all the Robinhood wankers to salivate over.

Today, we’re going to look at a proposed SPAC that has revenues – an amazing feat for a SPAC these days – and some very meaningful traction. A New Zealand rocket company called Rocket Lab plans to back their assets up into a SPAC called Vector Acquisition Corporation (VACQ).

Become a premium member and get access to hundreds of premium articles, reports and additional content.

Nanalyze Premium is your comprehensive guide to investing in disruptive technologies. Read by the top investment banks, management consultancies, VCs, and research houses. Trusted by over 100,000 institutional and retail investors. Covering disruptive technologies for over 18 years.