Why BlackSky Stock Just Blasted Off

Shares of recent special-purpose acquisition company (SPAC) IPO and NewSpace company BlackSky (NYSE:BKSY) are…behaving strangely today, first spiking more than 20%, then retracing to an…

11.9% gain as of 3 p.m. EDT, after the company filed its post-merger Form S-1 registration statement with the Securities and Exchange Commission (SEC).

Now, if you’ve been watching the SPAC space for any length of time, you know that the filing of an S-1 statement is usually the cue for a stock sell-off. The announcement of a flood of shares coming on the market, potentially depressing the prices of shares already trading, often spooks investors. For some reason, though, that’s not happening with BlackSky today.

So what

Why isn’t it happening? At first glance, it doesn’t seem to make much sense. After all, in today’s filing, BlackSky registered a total of 106.4 million shares of common stock that could potentially begin floating in the future, plus a further 8.3 million warrants for the purchase of shares (which are included in the 106.4 million).

That’s a lot of shares, and a lot of reason for existing shareholders to be nervous.

Now what

On the plus side, though, as the S-1 filing makes clear, about 24.1 million of these shares will only be issued and become publicly traded upon the exercise of warrants, and those warrants will only become profitable to exercise once the share price of BlackSky stock exceeds $11.50, or even, in the case of some warrants, $20 a share. With BlackSky stock currently trading below $11, however…

 

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