Shares of tiny rocket-maker Rocket Lab (RKLB 7.66%) took a tiny tumble Tuesday morning, sliding 2.7% through 10:55 a.m. ET on what might have been good news for the company.
Last night, NASA announced 15 space companies that will provide it with payload integration services aboard "suborbital rockets, high-altitude balloons, orbital spacecraft and satellites, and, in some instances, suborbital rockets that can accommodate carry people." Rocket Lab was one of the recipients...but only one of many.
NASDAQ: RKLB
Key Data Points
Who got NASA contracts this week?
Among the other winners were many names you'll certainly recognize if you're a space investor:
- Aerostar International
- Astrobotic Technology
- Blue Origin
- Momentus Space
- SpaceX
- Spire Global
- Varda Space
There were also quite a few winners you've probably never heard of:
- Angstrom Designs
- Astro Digital
- Galactic Enterprises
- Loft Orbital Federal
- Near Space Corp.
- Tyvak Nano-Satellite Systems
- World View Enterprises Inc.
What does this mean for Rocket Lab?
So, why might Rocket Lab investors be reacting negatively to this news? Well, for one thing, the size of the contracts being awarded is somewhat underwhelming -- just $45 million to be split 15 ways over a term of five years.
Split evenly, that would be just $600,000 per company per year.
For another, Rocket Lab won't even be able to compete for much of this work. It doesn't specialize in balloons, for example. It doesn't yet have any rockets capable of carrying people, suborbital or otherwise. Companies like SpaceX and Blue Origin will presumably hoover up all those contracts for themselves, along with the bulk of the money.
Long story short, this NASA contract award simply won't move the needle much at all for Rocket Lab. There's little reason to get excited -- so Rocket Lab investors aren't.
