Terran Orbital Corp (NYSE:LLAP), a prominent player in the small satellite sector, is conducting a formal review of strategic alternatives.
The regulatory disclosure follows an earlier WSJ report that Terran has attracted interest from potential strategic and financial buyers in the U.S. and Europe.
This move comes roughly eighteen months following its public debut. Currently, Terran Orbital’s market value stands at ~$180 million, a significant decrease from its previous peak of $1 billion, the report added.
Terran Orbital, headquartered in Boca Raton, Florida, has experienced a dip in its stock price to below $1 and is now facing the risk of being delisted, as per the report.
Lockheed Martin Corporation (NYSE:LMT), which reportedly holds a 33% stake in Terran, utilizes the company for its Pentagon contracts. However, Lockheed Martin is not anticipated to bid for Terran Orbital, the report noted, citing people involved in the sales process.
Despite plans to ramp up production to approximately 250 satellites per year, Terran’s growth has fallen short of forecasts, the report added.
Terran generated revenue of $43.9 million in its third quarter of 2023, up 58% year-over-year, but came below the consensus. The company’s net loss for the third quarter of 2023 was $(26.4) million. The company also reduced its full-year forecast, citing delay and uncertainty regarding the timing of performance related to its contract with Rivada versus original expectations.
The company’s cash and equivalents decreased to $38.676 million as of September 30, 2023, from $93.56 million as of December 31, 2022. Subsequent to quarter-end, the company had over $70 million in cash on hand as of October 31, 2023.
According to the report, the increasing demand for small satellites, partly fueled by the Space Force’s initiatives in orbital constellations, places Terran in a competitive market alongside companies like SpaceX.
Price Action: LLAP shares are trading higher by 1.94% at $1.05 on Monday.
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