Rocket Lab's share price may have been a casualty of SpaceX listing on the share market.
By Susan Edmunds of RNZ
In the past two weeks, since SpaceX listed, Rocket Lab's share price has dropped from just over US$100 (NZ$174) to about US$80 (NZ$139).
It reached a peak of more than US$140 (NZ$244) in May.
Generate investment specialist Greg Smith said some of the fall could be due to space-focused investors shifting their attention from SpaceX to Rocket Lab.
"Rocket Lab shares were already weakening ahead of the SpaceX IPO and have fallen about 20% since SpaceX listed two weeks ago. They are now down nearly 50% from their late-May peak.
"That said, some perspective is important. Rocket Lab had an extraordinary run before the pullback, rising around 150% over the past 12 months and roughly 15-fold over the past two years for early investors."
He said SpaceX would have shifted attention and capital towards the industry's dominant player. But the bigger picture was that Rocket Lab was coming off a huge rally.
"Whenever a highly anticipated company comes to market, there's often a period of portfolio reshuffling as investors reassess relative valuations and growth prospects.
"It's also worth noting that after the initial burst of IPO enthusiasm, SpaceX shares are now about 25% below their post-listing high, meaning many retail investors who bought during the frenzy are currently underwater. That's not particularly unusual. For both companies, success will ultimately be judged over years rather than weeks, and short-term volatility is often the price investors pay for access to high-growth businesses."
Rocket Lab has secured a new contract with NASA for three scientific launches.
Kernel founder Rupert Carlyon said Rocket Lab had issued 82 million shares over the past two years, which made up 16% of the total market cap.
But he said that was not uncommon for a high-growth start-up and was not a major driver of the share price movements.
"The share price has fallen 43% over the past few months, more for sentiment reasons than anything real. SpaceX is a big reason as well. Before SpaceX, Rocket Lab was the only way to get exposure to the space trade.
"And it was very expensive and priced for perfection trading at over 100 times sales at its peak - now down to 50 times sales, compared with the current SpaceX valuation of 59 times sales. There will have been a fair amount of rotation with people moving from Rocket Lab into SpaceX."
Data from BlackBull Markets showed New Zealand investors were among the most active SpaceX traders in the first week of the company's IPO.
Michael Walker, managing director, said: "SpaceX has clearly captured the imagination of New Zealand investors. The IPO has been one of the biggest market moments of the year for us, and our data shows Kiwi traders were right up there globally in terms of activity around the stock.
"But what is encouraging is that most traders are not trying to shoot the moon. On the first day, 99% of trades we received were long positions, showing investors were overwhelmingly backing the stock early. By the second day, investors had moved net short, with 74% of trades being short positions on that day.
"Since then, trading flows have stabilised with around 75% being long positions. That suggests investors remain broadly positive on SpaceX and they are in it for the long haul."
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