HOL Stock Price Increases Over 75% Pre-Market: Why It Happened

By Amit Chowdhry ● February 2, 2021
  • The stock price of Holicity Inc (NASDAQ: HOL) has increased by over 75% pre-market. This is why it happened.

The stock price of Holicity Inc (NASDAQ: HOL) has increased by over 75% pre-market. Investors are responding to merger news. Astra, the fastest privately-funded company in history to demonstrate orbital launch capability, and Holicity, a special purpose acquisition company (SPAC), announced a definitive business combination agreement today that will result in Astra becoming a publicly-traded company. 

The deal reflects an implied pro-forma enterprise value for Astra of approximately $2.1 billion. And upon closing, the transaction is expected to provide up to $500 million in cash proceeds, including up to $300 million of cash held in the trust account of Holicity and an upsized $200 million PIPE led by funds and accounts managed by BlackRock.

In December 2020, Astra had joined a small, elite group of companies that have made it to space. And with over 50 launches in manifest across more than 10 private and public customers, including NASA and DOD, Astra has booked over $150 million of contracted launch revenue. Astra is going to begin delivering customer payloads this summer and begin monthly launches by the end of this year.

Following the closing of the deal, the combined company will continue to be led by Founder and CEO Chris Kemp. And it is expected that Craig McCaw (Chairman and CEO of Holicity) will join Astra’s board of directors.

The proposed deal — which is expected to be completed in the second quarter of 2021 — has been unanimously approved by the boards of directors of both Astra and Holicity and remains subject to approval by Holicity’s stockholders. And upon the closing of the deal, the combined company will be named Astra and will be listed on NASDAQ under the symbol “ASTR.”

Holicity — which currently holds over $300 million of cash in trust — will combine with Astra in a transaction that is estimated to result in a pro forma enterprise value of approximately $2.1 billion. And cash proceeds in connection with the transaction will be funded through a combination of Holicity’s $300 million cash in trust and a $200 million fully committed common stock PIPE at $10 per share led by funds and accounts managed by BlackRock. 

Astra’s existing shareholders will hold approximately 78% of the outstanding shares of common stock of the combined company immediately following the consummation of the transaction, assuming no redemptions by Holicity’s existing public stockholders. And Astra’s founders will hold their interest in the pro forma combined company through super-voting (10:1) common stock.

KEY QUOTES:

“This transaction takes us a step closer to our mission of improving life on Earth from space by fully funding our plan to provide daily access to low Earth orbit from anywhere on the planet.”

— Chris Kemp, Founder, Chairman and CEO of Astra

“I have long believed space provides an unmatched opportunity to benefit and enrich society. Astra’s space platform will further improve our communications, help us protect our planet, and unleash entrepreneurs to launch a new generation of services to enhance our lives.”

— Craig McCaw, Chairman and CEO of Holicity