WASHINGTON — Shares in Firefly Aerospace rose 34% in the company’s first day of trading on the Nasdaq exchange even after the company increased both the price and number of shares in its initial public offering.
Firefly’s shares, trading under the symbol “FLY”, closed Aug. 7 at $60.35, up 34% from its IPO price of $45. Shares traded as high as $73.80 before declining later in the day.
Leading up to the IPO, the company had increased both the price of the shares and the number of shares offered. Firefly initially set a price July 28 of $35 to $39 per share and later raised it to $41 to $43 per share. The company announced Aug. 6 it set a final price of $45.
The company also increased the number of shares available in the IPO from 16.2 million to nearly 19.3 million shares. That gave the company gross proceeds of $868.5 million from the IPO, with the potential of an additional $130.5 million if an underwriters’ option to sell nearly 2.9 million shares is exercised.
In the prospectus it filed with the Securities and Exchange Commission July 11, Firefly said it would use the IPO proceeds to pay off $173.6 million in total indebtedness. The remaining funds would go to “general corporate and working capital purposes.”
The funds “will continue to enhance Firefly’s to deliver on high-stakes critical missions, like the emerging Golden Dome program, more historic moon missions as well as keep America first with responsive commercial tech,” Jason Kim, chief executive of Firefly, said in remarks at Nasdaq’s “opening bell” ceremony Aug. 7.
Firefly has product lines in launch, spacecraft and lunar landers. The company gained fame in March by becoming the first company to perform a fully successful lunar landing with its Blue Ghost 1 mission. Firefly has three more Blue Ghost missions in its backlog, including a $176.7 million mission awarded by NASA July 29.
The company is developing a line of spacecraft call Elytra that will both support some of those future Blue Ghost missions as well as for national security applications. The company won a contract from the Defense Innovation Unit in April for one such mission, using Elytra to perform responsive on-orbit tasks like space domain awareness operations.
In launch, Firefly operates the Alpha rocket capable of placing up to one ton into orbit. However, that vehicle has a checkered track record, with two failures in six launches, including its most recent launch April 29. The company has not disclosed details on the failure investigation and return-to-flight plans. It is also collaborating with Northrop Grumman on the Eclipse medium-class launch vehicle, with a first launch no earlier than 2026.
All those programs should benefit from the money Firefly raised in the IPO. “The cash should give them a decent runway to hopefully take advantage of other opportunities that might be in front of them,” Andrew Chanin, chief executive of ProcureAM, which offers an exchange traded fund called UFO focused on the space industry.
He said it was too early to say if the surge in the company’s stock after its IPO meant Firefly was overvalued or undervalued. “If anything, it shows excitement in the marketplace for this public company.”
Firefly is the second space company to go public in as many months. Voyager Technologies went public June 11, ultimately raising net proceeds of $409.4 million. The company’s IPO priced shares at $31, which closed at $56.48 in the first day of trading on the New York Stock Exchange. Those shares have declined since then, closing Aug. 7 at $34.99.
Some industry observers don’t expect many other space companies to follow suit in the near term, citing the availability of private capital and the costs of being a public company. Chanin said he did not see many near-term opportunities for space company IPOs.
The best candidate would be SpaceX, perhaps by spinning out its Starlink business, he said, “given that it seems like there’s not a ton of immediate urgency or desire to completely IPO SpaceX.” Other possibilities he mentioned for space companies going public include Blue Origin and Sierra Space.
He noted that in the broader market there has been a “fairly strong window” for companies to go public in recent weeks. That might encourage companies that have been sitting on the fence about an IPO to decide to go forward with one.
“For companies that have been considering it for a while and have been hesitant because there had been a fairly lackluster IPO market, you certainly have the potential of them changing their urgency to try to access capital,” he said.