Rocket Lab drops after announcing at-the-market offering to sell up to $1 billion of equity

What goes up must come down, and that’s exactly what’s happened with Rocket Lab shares over the last day or so.

Following a rally that saw the stock rise more than 10% on Tuesday, Rocket Lab shares came back down to earth in after-hours trading, after the company filed an offering that could see it sell as much as $1 billion in common stock over time. RKLB is down about 3% in premarket trading on Wednesday, as of 6:30 a.m. ET.

In the after-hours filing, the space company wrote that it would use proceeds from the offering to “fund future growth, including potential future acquisitions, and for general corporate and working capital purposes.” Rocket Lab’s Neutron rocket, which will be key in any path to profitability that the cash-burning business may forge, was delayed again last month, sending shares down at the time.

RKLB was involved in a wider space, satellite, and drone stock surge yesterday, as investors rallied around the sectors amid the ongoing war in Iran. The FAA had also announced new streamlined launch licensing requirements that will affect companies like Rocket Lab, Firefly Aerospace, and SpaceX. Per the FAA, the new rule, dubbed “Part 450,” will:

“...reduce the number of times an operator needs an FAA license approval and allow one license for a portfolio of operations, different vehicle configurations and mission profiles, and even multiple launch and reentry sites.”

That should cut down on the administrative burden on the industry more broadly.