Area firm Momentus receives SPAC merger approval following SEC settlement
Artist’s impression of a Momentus Vigoride transfer vehicle deploying a satellite in orbit.
Space company Momentus will go public on the Nasdaq later this week, a month after the Securities and Exchange Commission’s allegations that it misled investors were resolved.
Stable Road Acquisition Corp., a special purpose vehicle for acquisitions, or SPAC, announced on Wednesday that its merger with Momentus has been approved by shareholders. While just over half of Stable Road’s shareholders voted in favor of the merger, 97% of those eligible to vote approved the transaction.
Stable Road’s shares will be converted into Momentus shares on Friday, with the company’s ticker changing from “SRAC” to “MNTS”.
Stable Road stock fell 2.6% in trading on Wednesday, closing at $ 10.20 per share. Stable Road noted that public shareholders have requested the redemption of approximately 20% of the company’s outstanding shares – an unusually high amount for a company going public, given that redemptions are typically low after a SPAC merger is complete single-digit percentage range or less.
A SPAC raises money from investors through an IPO and then uses the money to buy a private company and take it public.
Stable Road stock is down nearly 43% so far this year as the company has been battled on numerous fronts. It faced delayed missions and the pressured departure of Momentus founder and former CEO Mikhail Kokorich, then the company’s valuation was cut in half from $ 1.1 billion to $ 567 million. Stable Road has also been charged by the SEC with falsifying the results of a spacecraft prototype test in July 2019.
SEC Chairman Gary Gensler stressed that his lawsuit against Momentus and Stable Road “illustrates the risks associated with SPAC transactions, as those who can make significant profits from a SPAC merger conduct inadequate due diligence and mislead investors.”
“The fact that Momentus lied to Stable Road does not release Stable Road from its failure to exercise due diligence to protect shareholders,” Gensler added in a statement.
Stable Road and Momentus agreed to pay the total of over $ 8 million in fees and penalties. Kokorich, who allegedly left the country, has not reached an agreement with the SEC.
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