Shares of Sidus Space (NASDAQ:SIDU) stock are up 15% today on news that the Florida-based satellite company has closed a $5.2 million public offering.
Sidus Space, which is focused on the commercial space and satellite industry, announced that it has sold 17.25 million shares of its Class A common stock at a price of 30 cents per share, injecting the company with $5.2 million of funds. Investors see the cash infusion as a positive for the company and are aggressively bidding up SIDU stock as a result.
Prior to today, SIDU stock had fallen 96% to trade at 40 cents a share.
What Happened
In a news release, Sidus Space, which refers to itself as a “Space-as-a-Service satellite company,” said it plans to use the proceeds from its latest share sale for marketing, operational costs, product development, manufacturing expansion, and general corporate purposes. Sidus Space is run by Carol Craig, an engineer and U.S. military veteran.
The company, which is located in Cape Canaveral, Florida in the heart of the U.S. “Space Coast,” operates a 35,000-square-foot manufacturing, assembly and testing facility. Sidus Space says it is focused on the design, manufacture and launch of commercial satellites, as well as data collection.
Why It Matters
Sidus Space is a small start-up that is endeavoring to break into the rapidly growing commercial space industry that is dominated by much larger competitors such as Elon Musk’s privately held SpaceX and publically traded Maxar Technologies (NYSE:MAXR). The company’s stock has struggled mightily over the past year and is currently trading deep in penny stock territory.
That the company has raised much-needed funds of $5.2 million is viewed as a positive by investors as it will enable Sidus Space to continue as a going concern and help the company to fund its operations. How long the funding lasts and what’s next for the company remains to be seen. But for now, investors are focusing on the fact that Sidus Space has secured itself a funding lifeline.
SIDU Stock: What’s Next
SIDU stock gets a big bounce today. However, investors should keep in mind that this is a stock that has declined more than 90% in the last 12 months. The company is a fledgling start-up. As such, investors should proceed carefully with Sidus Space and be ready to sell shares at the first sign of trouble.
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On the date of publication, Joel Baglole 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.
