In a stark disclosure made in a securities filing on Friday, Momentus, the space transportation company, delivered alarming news to its shareholders, revealing a perilous financial crisis with no clear lifeline in sight. The announcement triggered a significant downturn in Momentus’ stock value, plummeting to $0.79 on Friday morning from Thursday’s closing at $1.25.
At the time of this publication, Momentus Inc stock (MNTS) has witnessed a decline.
Momentus Inc
Current Price: $0.90
Change : -0.35
Change (%): (-28.38%)
Volume: 2.8M
Source: Tomorrow Events Market Data
Once a company valued at over $1 billion before going public through a special purpose acquisition company in 2021, Momentus abandoned its plans for the upcoming mission, which was slated to fly satellite customers in March. The company attributed this decision to its “inability to support continuing operations for the expected launch date” due to limited liquidity and a depleted cash balance.
To mitigate its financial challenges, Momentus had already implemented cost-cutting measures, including a workforce reduction of about 20% at the end of December. Despite these efforts, the company conceded that its ability to sustain operations in the coming weeks and months hinges on its capacity to secure equity capital or engage in a strategic transaction. However, Momentus emphasized that it currently lacks definitive commitments in this regard.
Following this disconcerting news, Momentus shares tumbled by more than 30% during Friday’s trading session, causing the company’s market value to dwindle to nearly $5 million. Adding to the woes, Nasdaq issued another delisting warning earlier this month, putting Momentus in a precarious position. The company narrowly avoided delisting last year by executing a reverse stock split.
Momentus emerged in the spotlight during the SPAC frenzy, joining a wave of space companies that went public through this avenue. However, the company faced challenges even before its public debut, including delayed missions following the departure of its founder and former CEO, a halving of its valuation to less than $600 million, and an SEC settlement related to allegations of falsifying results from a prototype spacecraft test.
With four missions under its belt, deploying 17 satellites for customers, Momentus positioned itself as a “last mile delivery” service for spacecraft, catering to the market for small satellites. Its flagship product, the Vigoride orbital transfer vehicle, or “space tug,” is designed to deliver satellites from a rocket to a specific orbit.
As Momentus grapples with its financial crisis, the space industry and investors are closely watching to see if the company can secure the necessary funding to navigate through these turbulent times or if it will succumb to the mounting challenges that have plagued its journey from the beginning.
