The planned merger between special purpose acquisition company (SPAC) Stable Road Acquisition (SRAC +0.00%) 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.
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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.
