Shares of Switzerland-based global cybersecurity specialist WiseKey (NASDAQ:WKEY) shot above the lackluster performance of the equities market Friday following a new partnership with advanced rocket manufacturer SpaceX. WKEY stock initially settled around 25% up before driving even further to around a 60% return. Still, after suffering steep losses since its Nasdaq debut, WKEY is a recovery trade.
According to the company’s press release, WiseKey — which also focuses on the Internet of Things (IoT) and artificial intelligence — announced that in cooperation with FOSSA Systems will launch several new satellites with SpaceX. This development adds to the 13 FOSSA satellites already in orbit. Further, the press release states the following:
“These new satellites will be part of the 80-satellite constellation which FOSSA has been planning to deploy since early 2022, aiming to provide global and real-time IoT connectivity for industrial applications with a 10-hour data latency. The launch will be carried out by SpaceX on a Falcon 9 Vehicle, no earlier than June 2023.”
Specifically, WiseKey’s contributions offer a “…security-IoT hardened nanosatellite designed to further drive down satellite costs for IoT applications.” With the deployment of additional satellites, WiseKey and FOSSA will offer lower latency times, reaching near real-time data with the 80 satellites projected for 2024, according to the release.
WKEY Stock Represents Intriguing Speculation
Adding to enthusiasm for WKEY stock is the underlying company’s approval of a special dividend-in-kind in the form of 1.5 million shares of SealSQ distributed to holders of WiseKey’s Class A shares, Class B shares and American Depositary Shares (ADRs). SealSQ is a wholly-owned subsidiary of WiseKey that focuses on developing and selling semiconductors. WiseKey will partially spin off SealSQ.
Broadly speaking, WKEY stock also benefits from the tremendous total addressable market (TAM) that the space economy facilitates. Citing various sources, McKinsey & Company reports that the space market recently reached a valuation of approximately $447 billion. By 2030, the segment could hit $1 trillion.
However, WKEY stock remains a speculative investment. To be sure, today’s skyrocketing helped push its year-to-date performance up to roughly 75%. And in the trailing one-year period, it gained nearly 7%. Nevertheless, since its Nasdaq debut, data from Google Finance reveals that WKEY has dropped more than 92%.
It’s worth pointing out for prospective investors that investment resource Gurufocus identifies six severe warning signs with WKEY stock. Among them, WiseKey keeps issuing new debt, it incurs declining revenue per share, and its Altman Z-Score indicates enterprise distress, implying bankruptcy possibility in the next two years.
Why It Matters
According to TipRanks, analysts peg WKEY stock as a moderate buy, although the view stems from only two experts. The average price target lands at $4, implying over 23% upside potential.
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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.
