On October 28th, Satixfy Communications, Inc. (SATX) completed its SPAC merger with Endurance Acquisition Corp. (final close at $8.29) and began trading on the New York Stock Exchange American (NYSE American). Opening at $20.92 per share, SATX reached as high as $52.59 but eventually closed at $29.39. The following trading days saw SATX’s stock perform similarly to other companies in the NewSpace Index that went public via SPAC merger: a sharp increase on the first day followed by a steady decrease in stock price over the following days, closing at $7.67 on November 3rd.
However, SATX stock shot up again on November 4th, fluctuating between $10-16 per share throughout the day. The was most likely due to a Forecast by Global Insight Services that mentions Satixfy as a key player in this growing industry. The volatile reaction of SATX’s stock price due to this report is likely a result of how recently Satixfy went public. Other companies in the NSI have reacted in a similar fashion when they make headlines but perhaps not as drastically given their longer tenure in the public market. Either way, we expect SATX stock to soon join the rest of the NSI below $10 per share (AST SpaceMobile is the next highest with their latest closing value of $7.44).
One interesting item to note about Satixfy’s SPAC merger is their OTC Prepaid Forward Purchase Agreement with Vellar Opportunity Fund SPV LLC – Series 7. Vellar has agreed to purchase up to 10 million shares which includes shares that were redeemed by shareholders prior to the completion of the merger. This not only ensures Satixfy raises a sufficient amount of the funds they expected through the merger, but given the nature of this agreement, the payment for shares isn’t final and therefore, any taxes on gains are deferred for 3 years. This may be the reason why SATX’s stock price jumped up to $20.92 before it opened on its first day of trading. It also gives Satixfy the short-term runway they need to execute on their business plan. The long-term consequences of the Forward Purchase Agreement are likely dependent on how SATX performs on the public market over the next few years. SATX most recently closed at $11.60 on November 10th.
Photo: Satixfy