Seraphim Space Investment Trust have seen shares rise by 18 per cent after buyback announcement

Shares of London-listed investment firm Seraphim Space rose on Thursday after it revealed a buyback plan.

The trust, which invests in early-stage “SpaceTech” companies, has engaged investment bank Morgan Stanley to buy back up to 35,883,800 of its common shares.

However, it does not plan to use all of its approval to buy back up to 14.99 percent of its shares and has not set a discount target.

Analysts from Quoted Data said, “Nevertheless, shareholders will be pleased to see the board take action to address a discount that currently stands at a ridiculous 71.6 percent].

Seraphim Space Shares rose 14.9 percent to 30 pence late Thursday afternoon, bringing losses for 2023 so far to 36.8 percent.

The stock price issues and the deep discount to the trust’s net asset value reflect tougher times for the aerospace industry, with investors withdrawing from riskier assets and the industry suffering from waning enthusiasm in the wake of Virgin Orbit’s collapse.

It also announced that 11 companies within its portfolio have successfully closed investment rounds during the year to June 30.

The majority of the rounds were led by new outside investors, with SSIT participating in two-thirds of the rounds.

Of the 11 companies, six were made at higher valuations compared to the previous rounds with only one round at a lower valuation.

The company stated that “this positive investment activity demonstrates the continued strength of the portfolio companies and increasing market recognition of their potential.”

Morgan Stanley estimates that revenue from the global space industry could exceed $1 trillion by 2040

In 2021, Seraphim Space Investment Trust became the first space technology-focused stock exchange listing in London.

The groups support more than 100 companies that have collectively raised $2.2 billion in equity capital and an enterprise value of more than $10 billion.

Top holdings include satellite companies Globalstar, Iridium Communications and Garmin.

The group has stated that they primarily seek exposure to privately funded early stage and growth spacetech companies that have the potential to dominate globally.

They also say the companies they are looking for are industry leaders with first mover advantages in areas such as climate, communications, mobility and cybersecurity.

Space exploration has come a long way since the first trip to the moon nearly half a century ago with more private funding, better technology and growing public sector interest.

It has piqued the interest of some of the world’s most successful businessmen, such as Sir Richard Branson, Elon Musk and Jeff Bezos.

Morgan Stanley estimates that revenue from the global space industry could exceed $1 trillion by 2040.

In its full-year results published this week, Seraphim posted an after-tax revenue loss of £4.3m in its first year and said it did not expect to recommend a dividend in the foreseeable future.