Rocket Lab (RKLB) Stock Jumps 24% Following $8B Acquisition News

Rocket Lab (RKLB) shares increased 24% last week after the announcement of its acquisition of Iridium Communications (IRDM) for approximately $8 billion, a transaction comprising 50% cash and 50% RKLB stock. The acquisition, set to close around mid-2027, is expected to enhance Rocket Lab's growth prospects. Iridium brings 66 operational satellites and 2.55 million subscribers, which could improve Rocket Lab's cash flow amid its current operational cash burn of $161 million over the past year. Notably, Iridium's cash generation stands at $411 million, and the deal values the company at 26 times free cash flow, contrasting RKLB's valuation of 82 times sales.