In 2019, Virgin Galactic became public with the help of a special-purpose acquisition company. This approach is a bit different when compared to the traditional way of going public. Not to endure a lengthy process of check-ups and investigations, a business can merge with a blank check company, just like Richard Branson’s startup did. Recently, there has been news about another space startup going public in the same way. This time it is Momentus Space, a space transportation company created by a Russian immigrant Mikhail Kokorich.
Momentus Space’s Offering
Momentus Space is a three-year-old startup offering infrastructure services in space, in particular, “last-mile” delivery service for spacecraft. Their innovative solution is a water propulsion system that allows more flexible transportation of satellites by moving them between orbits. The company has already gained contracts with some of the largest players in the rocket industry.
Now, after they were purchased by a blank check company Stable Road Acquisition Corp in 2020, the company is expected to join the stock market in 2021. It seems that the company has the full potential to become an active market player with current valuation being as high as $1.2 billion. However, some concerns regarding the company and its intentions still arise.
Investors’ Apprehension
The most substantial issue on the company’s way towards being publicly traded is the fact that investors do not understand why the company actually needs publicity. Some experts cannot figure out why would a company that existed for only three years go public. As a startup with an innovative solution, they could choose the usual investment round instead, which they accomplished before. And while this question evokes interest and causes concerns, the answer lies on the surface.
Russian Descent of Mikhail Kokorich — the CEO
The founder and CEO of Momentus is of Russian origin and refers to himself as the one who escaped from Putin’s regime. He even applied for political asylum in the US back in 2018. However, he still has no official status rather than “asylum seeker”. Therefore, according to SEC files, the top manager of the company has no right to use technologies developed by his business due to the specifics of American legislation. Though this might not be critical, the fact that he still hasn’t gotten the permission since he came to the US in 2014 looks suspicious as he has been involved in several tech startups working with dual-use technologies.
At the same time, the whole story is even more problematic if one looks deeper into it. While the figure of the CEO plays a role when investors make their decisions, the issue is that assumptions about the company’s top management having strong connections with Russia find proofs. Precisely speaking, Momentus co-founder is a top manager at Russian state-owned bank Sberbank that is currently under sanctions since 2014.
Overall, the idea of another space company going public shows that the industry is developing and still has much to offer. Public trading serves as a recognition of the company’s reliability and transparency. Yet, the future will show if Momentus Space will really make it to the stock market and will comply with the above rule.
