High-flying Rocket Lab (NASDAQ: RKLB) stock tumbled down (almost) to Earth Tuesday after Bleecker Street Research — which publishes “public short ideas” for its parent company, stock-shorting firm Bleecker Street Capital — warned that Rocket Lab’s highly anticipated Neutron medium-lift vehicle won’t launch for “a long, long time.” As of 1:15 p.m. ET, Rocket Lab stock is down 9%.
Bleecker Street starts off its short report by naming the catalyst that’s primarily responsible for Rocket Lab’s 485% surge in stock market value over the last year. It says, “[I]nvestor and analyst excitement over the upcoming launch of Neutron, a medium-lift rocket that RKLB hopes will compete with SpaceX’s Falcon 9.”
Rocket Lab has been targeting a mid-2025 first launch for Neutron, with the analysts on NextSpaceflight.com specifically penciling in a July target. But according to Bleecker, Rocket Lab “has materially misled investors about the likelihood” that its rocket will fly then.
However, Bleecker argues that Neutron isn’t likely to take off before mid-2026 and may not fly before mid-2027. The short-seller supports its accusation by citing conversations with 23 unnamed “rocket experts” who have apparently told Bleecker that Rocket Lab’s “engine development,” “engine and structure production,” “launch pad construction,” and “rocket transport to the launch site” infrastructure are all behind schedule, making a mid-2025 launch impossible.
Further bolstering the short-seller’s argument, Bleecker says some of its “experts” are actually “former Rocket Lab engineers and executives.”
Bleecker has other objections to Rocket Lab’s valuation, too, questioning its customer list, warning of cut-rate pricing for Neutron, and raising concerns about cash reserves and burn rate. Still, Bleecker admits it has a vested interest in getting you to believe its arguments and convincing you to sell any Rocket Lab shares you own because “funds managed by Bleecker Street are short Rocket Lab,” setting up Bleecker to profit if Rocket Lab stock goes down.
Does this mean Bleecker is wrong? Not necessarily.
Before you sell on this short-seller’s say-so, remember that Bleecker is far from an unbiased source.
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