Please ensure Javascript is enabled for purposes of website accessibility

SPAC Stable Road Dealt Fresh Setback as Merger Partner Backs Away From Revenue Guidance

By Lou Whiteman - May 24, 2021 at 4:37PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The U.S. government continues to probe Momentus's foreign ownership.

The planned merger between special purpose acquisition company (SPAC) Stable Road Acquisition (SRAC) and space tug service Momentus suffered a fresh setback as Stable Road warned that its partner no longer expects to conduct any revenue-generating missions in 2021.

Last October, Stable Road and Momentus announced plans to merge in a deal that would bring Momentus onto public markets. But the deal has been bogged down by regulatory concerns related to Momentus's Russian Founder Mikhail Kokorich.

A satellite orbiting Earth from above.

Image source: Getty Images.

Kokorich is under investigation by the U.S. Committee on Foreign Investment in the United States. He has agreed to fully divest his ownership by March 2024 to try to resolve issues, but Stable Road and Momentus have been forced to delay finalizing their merger.

In a regulatory filing Monday, Stable Road said that Momentus customer SpaceX has suspended work with the company while Momentus seeks to secure U.S. government approval for its missions. As a result, Momentus is unlikely to fly any missions this year.

Shares of Stable Road are off 40% year to date and down more than 60% from their February highs as investors have cooled to SPAC stocks in general and concerns about this deal in particular mount. On May 13, Stable Road won shareholder approval to extend the merger deadline to August by a slim margin.

Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Stable Road Acquisition Corp. Stock Quote
Stable Road Acquisition Corp.

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/18/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.