Today is a great day for every investor who dreamed of being an astronaut when they grew up. With leadership from Cathie Wood of ARK Invest, diving into that future of space exploration now could be a great opportunity to profit. In fact, three space SPACs have been rocketing higher. So with VG Acquisition (NASDAQ:VGAC), New Providence Acquisition (NASDAQ:NPA) and Stable Road Acquisition (NASDAQ:SRAC) on the move, what do you need to know?
To start, investors should know that Wood and her ARK Invest truly represent innovation in investing. She was an early bull on Tesla (NASDAQ:TSLA). Now, her exchange-traded funds track themes on the cutting edge like electric vehicles and gene-editing.
On Thursday, she showed investors what that next cutting-edge opportunity is. Through a filing with the U.S. Securities and Exchange Commission, ARK unveiled plans for a new Space Exploration ETF. Right now, we know that it will trade as the ARKX ETF, but we do not know its constituents. That uncertainty created a huge opportunity for speculation.
And boy, did investors speculate! Pure plays like Virgin Galactic (NYSE:SPCE) and Maxar Technologies (NYSE:MAXR) have gained big today. With a little more digging, investors also stumbled upon a trio of space SPACs. So how do they each fit into the ARKX ETF news?
Well, NPA stock and SRAC stock are clearer fits. New Providence plans to bring AST SpaceMobile — a company that wants to create a new mobile network in space — to the public markets. Stable Road similarly is bringing space towing company Momentus public. Both space SPACs will give investors new access to the space industry just in time for the ARKX ETF. These deals also make NPA stock and SRAC stock compelling fits for the new fund.
Space SPACs and Space ETFs
And what about VGAC stock? Well, the last of the space SPACs is perhaps the most speculative of all. That is because VG Acquisition, the blank-check company from Richard Branson, has not actually identified an acquisition target. Instead, investors are hopeful that Branson and Virgin Group will use this vehicle to bring Virgin Orbit or even Virgin Hyperloop public. Once again, these companies would give investors access to the space industry. And once again, a public Virgin Orbit or Virgin Hyperloop would nicely play into the ARKX ETF story.
If you are still not sure on the potential here, consider these words from InvestorPlace analyst Luke Lango:
“Thanks to multiple space company IPOs, growing public investor interest, and a plethora of successful test flights all on the horizon, space stocks are going to breakout in 2021 much like EV stocks broke out in 2020. The ARKX ETF from Ark Invest is simply a vote of confidence from the best investors in the world that this is, indeed, going to happen.”
So what is the bottom line? It is safe to say that Wood has a great track record when it comes to innovation. As you consider the bet she is making on space, be sure to keep these three space SPACs squarely on your radar.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer with InvestorPlace.com.