Space company Momentus will later this week go public on the Nasdaq, a month after settling Securities and Exchange Commission charges that it misled investors.
Stable Road Acquisition Corp., a special purpose acquisition company, or SPAC, on Wednesday announced its merger with Momentus was approved by shareholders. While only a little over half of Stable Road’s shareholders voted on the merger, 97% of those who voted approved the deal.
Shares of Stable Road will convert to stock in Momentus on Friday, with the ticker symbol of the company changing from “SRAC” to “MNTS.”
Stable Road’s stock fell 2.6% in trading on Wednesday to close at $10.20 a share. Stable Road noted that public stockholders filed to redeem about 20% of the firm’s outstanding shares — an unusually high amount for a company that is going public, as redemptions are typically in the low single-digit percentages or less after a SPAC merger closes.
A SPAC raises money from investors through an initial public offering and then uses the cash to acquire a private company and take it public.
Stable Road’s stock is down nearly 43% so far this year, as the company has been embattled on numerous fronts. It has 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 also faced SEC charges that it falsified the results from a prototype spacecraft test in July 2019.
SEC Chair Gary Gensler emphasized that its case against Momentus and Stable Road “illustrates risks inherent to SPAC transactions, as those who stand to earn significant profits from a SPAC merger may conduct inadequate due diligence and mislead investors.”
“The fact that Momentus lied to Stable Road does not absolve Stable Road of its failure to undertake adequate due diligence to protect shareholders,” Gensler added in a statement.
Stable Road and Momentus agreed to settle the charges and penalties of over $8 million in total. Kokorich, who reportedly left the country, has not settled with the SEC.