The arrival of another Donald Trump presidency in the US could signal interstellar returns for London-listed Seraphim Space.
Space played an outsized role in the policy agenda of Trump’s first stint in the White House and the emergence of Elon Musk in the President-elect’s inner circle suggests the next four years may be no different.
Seraphim, which is the world’s first listed ‘SpaceTech’ investment company, told shareholders on Tuesday a second Trump presidency ‘augurs well for the prospects of the company and its portfolio’.
It said: ‘Space was at the forefront of Trump’s first administration that witnessed the establishment of the Artemis program, the re-launch of the National Space Council and the creation of the Space Force.
‘Although we will have to wait for policy details, with Elon Musk assuming a senior advisory role to the incoming administration, we expect space to once again be central to Trump’s agenda, boosting demand for both incumbent space/defence primes and new market entrants.
‘We also expect to see further sizeable increases in defence/space budgets from Europe/NATO members as a result of Trump’s re-election.’
The November launch of an Elon Musk-owned SpaceX Falcon 9 rocket at the Cape Canaveral Space Force Station in Florida, carrying a GSAT-20 communication satellite
Seraphim invests in an international portfolio of predominately early and growth stage unquoted SpaceTech businesses.
But it actively avoids investment in launch companies like Virgin Orbit, which crashed into bankruptcy after the failure of its LauncherOne rocket out of one of Britain’s new spaceports in Cornwall.
Seraphim shares have added almost 80 per cent over the last 12 months, with the company raising $900million in new investments over its most recent financial year as its portfolio holdings took major steps towards profitability.
But the shares are down more than 40 per cent since listing in July 2021 and trade at a 36.4 per cent discount to net asset value, according to the Association of Investment Companies, as higher interest rates have taken their toll on both growth stocks and investment trusts.
Analysts at QuotedData wrote recently that while ‘wide discounts seem to be the norm’ for Seraphim’s peer group, its current discount ‘looks unreasonable’.
It added: ‘The market is yet to recognise the material progress SSIT’s investments have made.
‘This suggests that the discount provides an attractive opportunity. Especially when one considers the powerful tailwinds that interest rate cuts would bring.’
A wide discount to SSIT’s net asset value has opened up over the last two years
How Seraphim is making progress
Seraphim on Tuesday also updated investors on the progress of some portfolio holdings in the last month.
Space-to-cloud data and analytics firm Spire Global sold its maritime business to Belgian trade intelligence firm Kpler for $241million, in a ‘pivotal move’ to reduce debt and strengthen its financial position, according to Seraphim.
SatVu, which provides thermal imaging from space, secured £10million in funding ahead of two satellite launches scheduled to take place next year.
Satellite designer and manufacturer AST SpaceMobile secured launch service agreements to expand its space-based cellular broadband network, which ‘aims to provide continuous global coverage in key markets such as the US, Europe and Japan and for the US government’, Seraphim said.
SSIT’s top holdings as of the end of June
Low Earth orbit specialist LeoLabs and Finnish microsatellite group ICEYE joined the US Department of Defence’s commercial Augmentation Space Reserve program.
The latter also teamed up with defence giant Lockheed Martin to enhance AI-enabled targeting capabilities, while Xona Space Systems partnered with Astranis to enhance the US military’s GPS resilience by providing space-based backup GPS systems.
Seraphim said: ‘The portfolio continues to perform commercially, with SSIT well-positioned to benefit from the continued rise in global defence spending.’
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