Home Stock Here’s why Spire Global shares are up about 35% on Tuesday

Here’s why Spire Global shares are up about 35% on Tuesday

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Shares of Spire Global Inc (NYSE: SPIR) closed nearly 6.0% down on Monday as the Evergrande news fuelled a broader market sell-off that resulted in a 2.0% decline in the benchmark S&P 500 index.

The move down, however, was short-lived as investors returned to buy SPIR this morning, pushing the stock up 35% to a record $17 a share.

Was it just a relief rally?

The “relief rally” in the pure-play space stock on Tuesday is not backed by any recent announcement and is attributed, for the most part, to investors buying back shares they offloaded yesterday amidst the sell-off.

It is, however, conceivable that investors might also be responding late to a news last week that Spire Global wanted to acquire exactEarth – a fellow space company based in Canada.

Spire Global debuted on the NYSE via a SPAC merger in November 2020 at a per-share price of $9.68. The Virginia-headquartered company is now valued at $2.39 billion.

Details of the agreement with exactEarth

In a press release last week, Spire Global said it had entered into a definitive agreement to acquire exactEarth for roughly $161.2 million in cash and stock. The deal is subject to customary closing conditions, including regulatory approval.

Upon completion, exactEarth will continue to operate from its headquarters in Cambridge as a wholly-owned subsidiary of Spire Global. CEO Peter Mabson will continue to lead the Canadian firm, shareholders of which will own about 3.8% of Spire Global.  

Together, the two companies aim at digitalizing the global maritime industry valued at about $2.0 trillion. The acquisition is expected to be accretive to Spire Global’s revenue and adjusted EBITDA.

The post Here’s why Spire Global shares are up about 35% on Tuesday appeared first on Invezz.

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