Rocket Lab Corporation (RKLB) stock traded higher during Friday's premarket session, and the reason is pretty straightforward: the biggest question mark hanging over its proposed acquisition just got a little smaller.
On Thursday, Iridium Communications Inc. (IRDM) shareholders approved Rocket Lab's proposed acquisition. The companies continue to target a mid-2027 closing.
Iridium CEO Matt Desch and Rocket Lab CEO Sir Peter Beck said the vote marks an important step toward combining Iridium's global network, spectrum and operating experience with Rocket Lab's launch and space systems capabilities.
Under the agreement, Iridium shareholders will receive $27 in cash plus Rocket Lab common shares. The exchange ratio is subject to a collar. The transaction has a notional value of $54 per Iridium share.
The deal remains subject to regulatory approvals and other customary closing conditions.
Rocket Lab Secures Funding For Iridium Deal
Last week, Rocket Lab fully financed the pending acquisition after completing a $1.94 billion at-the-market equity offering.
The company raised about $1.944 billion in gross proceeds by issuing 29.3 million shares through the program.
Rocket Lab also secured lender consent to retain Iridium's existing term loan. It then canceled a planned $3.6 billion bridge facility.
The company plans to use the net proceeds to fund cash payments tied to the Iridium acquisition.
Technical Analysis
RKLB shares are in a near-term rebound. The stock is trading 13.8% above its 20-day simple moving average of $65.57. It is also 7.5% above its 50-day SMA of $69.35.
However, the longer-term trend is still recovering. Shares remain 15.4% below the 100-day SMA of $88.16 and 7.9% below the 200-day SMA of $80.98.
The moving-average structure also remains mixed. The 20-day SMA is below the 50-day SMA. Meanwhile, the 50-day SMA remains below the 200-day SMA following a death cross in August.
That setup could create resistance as Rocket Lab approaches its longer-term moving averages.
Momentum has improved. The MACD is above its signal line, while the histogram is positive. That suggests selling pressure has eased from the previous downswing.
Key resistance sits near $87, close to the 100-day SMA. Key support is around $61, an area where buyers previously stepped in.
Analyst Outlook
The stock carries a Buy consensus rating with an average price forecast of $110.14.
Raymond James initiated coverage on Sept. 11 with an Outperform rating and an $80 price forecast. Bank of America Securities maintained a Buy rating on Aug. 31 but lowered its price forecast to $110. Citizens maintained a Market Outperform rating on Aug. 11 with a $130 price forecast.
Momentum Scorecard
Rocket Lab has a Momentum score of 82.23 on the market data scorecard.
The reading reflects strong relative price momentum as the stock rebounds from its summer lows.
However, the $80 to $88 area remains important. That range includes longer-term moving averages that could act as resistance.
ETF Exposure
Rocket Lab has notable exposure through several exchange-traded funds.
The Tema Space Innovators ETF (NYSE:NASA) has a 9.54% weighting in Rocket Lab. The ARK Space & Defense Innovation ETF (NASDAQ:ARKX) has a 5.09% weighting, while the ARK Autonomous Technology & Robotics ETF (BATS:ARKQ) has a 3.60% weighting.
Large inflows or outflows from these funds can therefore create additional buying or selling activity in Rocket Lab shares.
Price Action
RKLB Price Action: Rocket Lab shares were up 1.36% at $74.61 in Friday premarket trading, according to market data.
