Funding New Space Companies in Equity Markets: Assessing the Risk and Uncertainty of Newly Listed Public Companies

This article applies the techniques of risk assessment to the space sector through the analysis of the compared risk and return features for publicly listed space-related businesses primarily in the United States. The goal of this study is to analyze the volatility embedded in the stock offerings to understand the potential returns and compare volatility with the comparative risk characterizing other benchmark portfolio companies. This study is particularly interesting for understanding risk from the perspective of the enterprises themselves. High volatility shown by stock prices is relevant information not only for the investors but also for the feasibility of creating effective development strategies by the companies. The possible misalignment between the trend of stock prices and the value of equity creates useful hypotheses that the financial markets are not yet ready to host the securities issues by many companies in the space sector or that the companies themselves are not yet prepared to meet the expectations expressed by the markets.