Seraphim Space (SSIT) is considering a C-share issue in response to investor demand that has pushed its ordinary shares to a 25% premium above net asset value after a 278% surge in the past year.
That performance, and a 72.3% total return over three years, are currently the best of any UK listed investment company.
The company says its high growth portfolio of 24 holdings, which includes maturing, well-capitalised companies and not just start-ups, has strong momentum with the shares up 40% this year and last month reporting 20.1% growth in the second half of last year.
It believes the space technology market is “at a critical inflection point” after SpaceX, the Elon Musk rocket and satellite group pursuing a $2trn valuation in which it does not invest, has forged significantly cheaper access to space.
On Friday, Hawkeye 360, an operator of a constellation of small satellites, filed its intention to float on the US stock market. It did not say what price it would offer shares at or how much it would seek to raise. It raised $173m in its last funding round in December, valuing it at $2bn. According to Reuters, the filing showed the company made net income of $2.7m on revenue of $117.7m last year, compared with a $29mloss on revenue of $67.6m in 2024. Hawkeye was Seraphim’s fourth biggest holding at 31 December, accounting for 10.1% of net assets, a stake valued at £34.1m.
The “C”-shares would form a separate share class to the Seraphim’s ordinary shares during their deployment phase, which would reduce “cash drag” for existing shareholders. They would convert into ordinary shares once the proceeds, or part of the proceeds, have been invested. The conversion would be done in a way to ensure that the net asset value (NAV) per ordinary share would not be diluted.
The shares shed 8.8p, or 4.7%, to 178.8p in early trading this morning.
Our view
Matthew Read, senior analyst at QuotedData, said: “We are pleased to see Seraphim Space considering raising fresh capital and think that a C-share is probably the most appropriate route under the circumstances. SSIT has recently been trading at a premium to NAV, and issuing new stock should be beneficial for existing shareholders as it should improve secondary market liquidity and help bring down the trust’s expense ratio by spreading fixed costs over a larger asset base.
“SSIT has enjoyed a very strong run of performance recently and the manager has been clear that not only does it see a healthy pipeline of new investment opportunities, but it also expects further NAV from the existing portfolio as recent contract wins translate into stronger revenues and improving business momentum. Added to that is the prospect of greater investor interest in the SpaceTech sector if the long-anticipated IPO of SpaceX finally materialises.
“After a difficult period for growth assets, SSIT looks to be trying to seize the initiative at a moment when both sentiment and fundamentals appear to be in its favour.”
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