Shares of multifaceted space economy specialist Sidus Space (NASDAQ:SIDU) skyrocketed on Thursday, gaining about 200% in the afternoon session. Catapulting sentiment was management’s announcement earlier this morning that it laid the groundwork for a critical satellite launch in the first quarter of next year. If all goes to plan, the underlying LizzieSat platform could be a catalyst for high-margin revenue growth. Still, SIDU stock remains an extremely speculative venture.
According to the company’s press release, Sidus spent much of this year preparing for the launch of LizzieSat, billed as a multi-mission satellite offering turnkey access to space. Leading up to its first quarter of 2024 launch, Sidus has expanded its services, secured new customers and enhanced its technologies. It has also completed the required testing for launching LizzieSat via the SpaceX Transporter-10.
Notably, Sidus successfully completed integration testing of command-and-control systems between the company’s mission control center, its research center partners and LizzieSat’s onboard radios and control mechanisms.
Fundamentally, the satellite offers myriad attributes that scale to various needs, budgets and timeframes. According to Sidus’ spec sheets, LizzieSat is a microsatellite, tipping the scales at 100 kilograms (approximately 220.5 pounds). Further, 35 kilograms are dedicated to technology and data collection. Moreover, the platform utilizes artificial intelligence (AI), enabling quicker data processing and analysis relative to traditional satellites.
SIDU Stock Intrigues, but High Risks Remain
Looking ahead, Sidus seeks expanded partnerships based on low-earth-orbit (LEO) missions along with potential lunar opportunities. As well, assuming the successful launch and operation of LizzieSat, management expects an increase in annualized revenue from subscription customers as the base expands. Further, additional satellite launches with new customers and technologies may lift SIDU stock higher.
Sidus Space CEO Carol Craig emphasized the importance of meeting critical milestones in 2023 to set up the upcoming satellite launch. “The foundation is laid, and our robust customer base eagerly awaits the delivery of our AI-enhanced space data, poised to redefine the landscape for Sidus and the broader industry,” Craig stated.
Given the blistering ride of SIDU stock recently, the optimism appears justified. However, context matters. In the trailing six months, shares stumbled around 30%. Since the beginning of the year, SIDU has given up roughly 87% of its equity value. Glaringly, Google Finance notes that its 52-week range runs from $3.27 to $148.
Several days ago, Sidus announced a 1-for-100 reverse stock split of its issued and outstanding shares of common stock. As the Financial Industry Regulatory Authority (FINRA) warns, “[r]everse splits tend to go hand in hand with low-priced, high-risk stocks. This is especially true with reverse splits that result in a post-split share price that is many times the price of the stock’s current price.”
Why It Matters
At the moment, the short-squeeze potential for SIDU stock appears minimal, considering that its short interest only sits at 5.64% of its float. That said, its underlying short borrow fee rates have gyrated wildly this month. Currently, it comes in at 7.4% (as an annual percentage rate). However, on Dec. 21, this metric soared to nearly 145%.
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On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
