During an interview with CNBC, Beck said that the $8 billion Iridium deal provides Rocket Lab with a great entry point to launch application services in space.
- Beck also said that the SpaceX IPO has brought some due attention to the satellite communication services space.
- He highlighted that other companies developing their own space-based connectivity solutions have tied up with or acquired companies that hold valuable spectrum.
- Beck referred to Amazon’s acquisition of Globalstar, SpaceX’s spectrum acquisition from EchoStar, and Rocket Lab itself thanks to the Iridium deal.
Rocket Lab Corp. (RKLB) CEO Peter Beck on Wednesday echoed Space Exploration Technologies Corp.’s (SPCX) view of the addressable market in the satellite communications services segment, while downplaying the threat these services pose to traditional telecom players.
During an interview with CNBC, Beck explained that the $8 billion deal to acquire Iridium Communications Inc. (IRDM) provides Rocket Lab with a strong entry point for launching application services in space.
“Whether you want to read a banker’s report or you link into SpaceX’s own internal judgments on how big the market can be, it generally starts with a ‘T’,” Beck added.
He also said that the SpaceX IPO has brought some due attention to the satellite communication services space.
Rocket Lab shares edged up by 0.02% in Wednesday’s pre-market trade, while SpaceX shares were up nearly 3%.
Beck Downplays Threat To Traditional Telecom Players
Beck said that space-based connectivity solutions and traditional telecom services aim at different markets.
He referred to the markets in which Iridium is very successful, including life-critical services such as connectivity solutions for marines and pilots.
“They don’t displace telecom companies in any respect,” he added, while noting that space is the ideal high-ground to offer those life-critical connectivity solutions.
“Being in that market and having the ability to participate, I think, is really valuable,” Beck said.
Beck Says IRDM Deal Is Greater Than The Sum Of Its Parts
Beck said that the Iridium deal is a scenario where it is greater than the sum of its parts, while adding that the acquisition gives Rocket Lab the opportunity to take the valuable L-band spectrum and apply it with the capabilities the company already has.
“It’s a very typical Rocket Lab deal. We don’t pin things on hopes and dreams. Iridium has a constellation that is very fresh, the company itself is generating plenty of cash… very profitable,” he said.
Beck highlighted that other companies developing their own space-based connectivity solutions have tied up with or acquired companies that hold valuable spectrum. He referred to Amazon.com Inc.’s (AMZN) acquisition of Globalstar, SpaceX’s spectrum acquisition from EchoStar, and Rocket Lab itself thanks to the Iridium deal.
“You can build all the satellites you want, have all the rockets in the hangar that you want, but if you don’t have the spectrum to be able to actively use, it’s all for nothing,” he added.
RKLB’s Iridium Deal
Rocket Lab announced plans earlier this week to acquire Iridium in a cash and stock deal valued as it looks to unlock synergies of vertical integration. It stated that the deal represents an enterprise value for Iridium of approximately $8 billion.
Rocket Lab said the acquisition will bring together its launch and satellite manufacturing capabilities with Iridium’s global satellite communications network and L-band spectrum, creating a vertically integrated space company capable of designing, building, launching and operating its own satellite constellations.
What Retail Investors Think Of RKLB Stock
Retail sentiment on Stocktwits around Rocket Lab trended in the ‘bullish’ territory at the time of writing.
RKLB stock is up 46% year-to-date, while SPCX stock is up 14%. The Vanguard Total Stock Market Index Fund ETF (VTI) is up 22% over the last 12 months, while the Vanguard Mid-Cap Index Fund ETF (VO) is up 15%.
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