After seeking a disruptive tech company to take public, one SPAC has landed on satellite startup Planet Labs. The company focuses on high-resolution imagery and global data, and it's a staunch player in the atmospheric game.
Backed by blue-chip tech leader Alphabet (NASDAQ:GOOGL), Planet Labs holds potential and risk in the public market.
Blank-check firm dMY Technology is leading Planet toward an IPO.
A few months prior to the Planet Labs IPO announcement, Niccolo de Masi's firm called dMY Technology Group, Inc. IV (NYSE:DMYQ) went public at the standard SPAC rate of $10.00 per share. dMY Technology announced that it would target disruptive companies in the tech space.
It specifically sought "companies that have created, or enabled the creation of, compelling mobile app experiences with significant growth in segments such as gaming, entertainment, education, work productivity, e-commerce, financial technology, and health and wellness."
Among other focuses, it also targeted ESG-focused businesses and companies developing satellite and space rocket technologies. Planet Labs just so happens to fit right into the latter category.
Planet Labs CEO Will Marshall said on CNBC's Squawk on the Street that he's "real excited to be going public because Planet is ready for the big wide world and the world really needs Planet."
The Planet Labs SPAC deal is worth $2.8 billion.
The SPAC deal between Planet Labs and dMY Technology is expected to create a combined entity worth $2.8 billion.
Part of this comes from a $200 million fully committed PIPE (private investment in public equity) round led by major firms like BlackRock (NYSE:BRK), Google, and Salesforce (NYSE:CRM). With a whole slew of high-profile institutions backing the company, it's clear that the sentiment surrounding the Planet Labs IPO is positive.
Among others, Goldman Sachs and Morgan Stanley are advising the deal.
When is Planet Labs going public?
Right now, DMYQ stock is on the market. Once the merger finalizes, Planet Labs will take that spot on the exchange. Planet Labs plans to use the ticker symbol "PL," a short-but-sweet acronym to represent its growing and sophisticated business. Currently, the company is generating $100 in revenue annually, with 600 customers in 65 countries. Considering that it was founded by a trio of NASA scientists, Planet Labs' commitment to "using space to help life on Earth" is obvious.
As for when Planet Labs will make the switch, the date hasn't been specified. However, SPAC deals tend to move much quicker than traditional IPOs (hence the "back door" appeal). This could mean PL will hit the exchange sooner rather than later. Reports suggest that it could come by the end of the year.
Should investors buy the Planet Labs SPAC before the IPO?
DMYQ stock is already on the market, and it's trading about even with its debut price. The stock price has been mildly volatile, but there haven't been any marked upswings. This could mean safer entry into the SPAC stock before Planet Labs goes public. Also, the public market for satellite companies is booming, and it isn't all due to Elon Musk's Starlink. At a $2.8 billion valuation, Planet Labs' share price could easily demonstrate growth well beyond the $10 mark—although that return might not be immediate.
Keep in mind that SPACs aren't guaranteed until the merger finalizes. They can always be terminated and return your initial investment.