Rocket Lab Announces a Massive $8 Billion Satellite Acquisition. Now What?

Yahoo Finance ·

While the market remains largely focused on newly IPO'd Space Exploration Technologies ( SPCX +2.83% ) , known as SpaceX, and whether it will merge with Tesla or acquire T-Mobile , smaller rival Rocket Lab ( RKLB +0.32% ) just made a very big move. On Monday, it announced plans to acquire Iridium Communications ( IRDM 3.54% ) for $8 billion. At first blush, it doesn't appear to mean much. Both minor players will remain minor players compared to SpaceX, even after the pairing is consummated. And perhaps that expectation is accurate. Nevertheless, this union has the potential to produce a sizable reward for patient Rocket Lab shareholders. It's a smart match. Rocket Lab has already perfected a reusable small-lift launch vehicle called Electron, capable of putting up to 660 pounds of payload into low-Earth orbit. It's working on a medium-lift rocket with much greater power, too.

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