What happened
Shares of space stock Spire Global (SPIR +4.50%), which surged a combined 42.5 percentage points over the past two trading days, were down 22.2% in 11:15 a.m. EDT trading today.
Image source: Getty Images.
So what
Spire's shares took off primarily in response to news that the company is partnering with Internet of Things satellite company Myriota, in which Spire is also taking a minority interest by virtue of its acquisition of Canadian space company exactEarth, announced last week.
The deal promises to give Spire a sort of "captive audience" to which to sell services on its satellite constellation (100 satellites in orbit already, and counting). Simultaneously, in helping Myriota to grow its business, Spire should be able to grow the value of its own stake in the partner company.
Now what
While Spire's Myriota deal sounded good at first, the news is now sinking in after a week. The company never did tell investors precisely how good this collaboration is in terms of additional revenue, or profit, for Spire's business.
Lacking that knowledge, it's hard for investors to say for certain that all 42.5 percentage points of Spire stock's run-up this week were justified. And lacking that certainty, they're locking in profits by selling on the (week-old) news and collecting their winnings today.
While I own shares of Spire myself, and am sticking with them, I can't say I blame other investors for erring on the side of caution.
