Rocket Lab's Engine Test Sparks a Bounce, But Iridium Merger Collar at $67.50 Looms
Published on 07/21/2026 at 18:34 | Redaktion boerse-global.de
Rocket Lab delivered a badly needed technical milestone this week, successfully fire-testing the vacuum-optimised Archimedes engine of its Neutron rocket for nearly 5.5 minutes at full thrust, followed by a successful ignition test of the AVac derivative. The stock responded with a 5.4% gain on Tuesday, climbing to €60.50, after having closed at €57.40 the previous session. Yet the bounce barely scratches a wound that runs deep: the shares have shed 34.6% in the past 30 days and stand nearly 55% below May's record of €133.80.
The engine test removes one source of uncertainty for the Neutron programme, whose maiden flight has already slipped to the fourth quarter of 2026. But the market’s attention has shifted to a far bigger story — the proposed $8 billion acquisition of satellite operator Iridium Communications. The deal, announced at $54 per Iridium share, carries a collar mechanism designed to cap the number of new Rocket Lab shares issued if its own stock price falls. That safety buffer was almost breached last week: Rocket Lab closed at $67.62, a mere $0.12 above the collar’s lower bound of $67.50. Iridium itself trades at $46.68, well below the $54 offer price, reflecting regulatory and financing hurdles that put closing no earlier than mid-2027.
Peter Beck, Rocket Lab’s CEO, has called the merger “a defining moment for the space industry,” citing Iridium’s 2.55 million subscribers and $871.7 million in projected 2025 revenue. But investors worry about dilution, a concern compounded by Beck’s own planned share sales between July 6 and 8 at prices ranging from roughly $82 to $102. The combination of a dilutive acquisition, a delayed rocket debut, and insider selling has soured sentiment among retail traders: Reddit-derived sentiment scores have plunged from 85 around the Iridium announcement to as low as 18–24 in mid-July.
Should investors sell immediately? Or is it worth buying Rocket Lab?
Analyst views remain split. Piper Sandler recently initiated coverage with a neutral rating, a move that pressured the stock further. But Citizens analyst Trevor Walsh raised his price target from $95 to $130 with an “Outperform” call, arguing the Iridium deal accelerates Rocket Lab’s push into higher-value space applications. Roth Capital’s Suji Desilva also lifted his target to $130 from $100, reiterating a “Buy” and calling the acquisition a transformative step toward a vertically integrated space infrastructure provider.
Technically, the stock is deeply oversold. The 14-day relative strength index had fallen to 29.0 on Monday before Tuesday’s bounce lifted it to around 33 — still firmly in oversold territory. The shares trade more than 34% below their 50-day moving average of roughly €92.00. With 30-day annualised volatility at 95.7%, wild swings are the norm.
For now, two narratives compete for investors’ attention. The Neutron engine test offers a glimpse of operational progress, while the Iridium collar represents a near-term risk that could reignite if either stock moves adversely. Until the merger clears its regulatory and shareholder votes, every price tick around $67.50 will be watched as closely as any rocket launch.
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