The persistent decrease in Booz Allen Hamilton's stock value.
Booz Allen Hamilton (BAH 0.51%) is on a downward spiral, experiencing a series of consecutive losses. The company's shares have slipped for four consecutive days, with losses accelerating significantly over the past two. Yesterday, the stock dropped more than 5%, and as of 10:40 a.m. ET Thursday, it had plummeted an additional 4.4%.
But what led to this accelerated decline yesterday?
Booz Allen Hamilton Dips into Space
In an unexpected move, Booz Allen Hamilton announced an investment in the privately-owned space tech company, Starfish Space. Known primarily for its government consulting services, Booz Allen Hamilton is venturing into the realm of satellite servicing with this direct investment.
Starfish Space is described as an "emerging leader" in satellite life extension and end-of-life disposal, with a team of engineers hailing from Blue Origin and NASA. The company is currently developing a space tug, Otter, for satellite servicing missions.
Starfish Space has already demonstrated its capabilities with the U.S. Space Force, partnered with NASA on another mission, and signed a contract with Intelsat for a third. The Space Force has awarded Starfish Space at least $37.5 million in contracts so far.
The Impact on Booz Allen Hamilton
Booz Allen Hamilton's involvement in Starfish Space may not be substantial, considering its $20 billion market capitalization. However, with only $100 million in cash from its Booz Allen Ventures arm, any significant capital risk seems unlikely. If the investment aids Starfish in the launch of its "Otter" space tugs and the growth of its business, Booz could potentially benefit from any increase in Starfish's valuation, perhaps even profiting further from a potential initial public offering (IPO).
Moreover, Booz Allen Hamilton sees this as the third investment in its space-focused strategy, indicating a potential commitment to pursuing such deals in the future. Investors should be prepared for more ventures in this realm.
The investment in Starfish Space by Booz Allen Hamilton could be seen as a strategic move to diversify its financial portfolio, venturing into the lucrative field of space technology. This investment might also provide Booz Allen Hamilton with potential returns if Starfish Space's "Otter" space tugs are successfully launched and the company's business grows, potentially leading to a profitable IPO.
