Terran Orbital wins $2.4 billion Rivada satellite contract

Terran Orbital shares surged on Wednesday after the company announced a $2.4 billion contract to build communications satellites for Rivada Space Networks.

“I believe this is the largest small [satellite] deal in the history of small sats – I don’t know any deal that is larger,” Terran cofounder, chairman and CEO Marc Bell told CNBC.

The spacecraft builder will design, manufacture and deploy 288 satellites for Rivada out of Terran’s Tyvak subsidiary based in Irvine, California. It will also build 12 spare satellites, for a total contract of 300 satellites, and develop portions of the ground support for the constellation.

“It solidifies our place as the manufacturer of small sats of choice … we’ve been doing a lot of work for the government and the intelligence community, and now we’re doing it for the commercial side as well,” Bell said. “I think people can now draw a very confident line on our path to profitability, our path to growth and they could see how we’re gonna get there.”

Rivada Space Networks Executive Chairman Declan Ganley declined to specify how much his company has in financial commitments from investors, but told CNBC the amount is “sufficient to meet our obligations for the foreseeable future.”

Terran stock jumped as much as 101% on Wednesday from its previous close of $1.71 a share before paring those gains to about 70% up by midday. The stock has slid steadily since its debut just over a year ago, when it finished its first day of trading at $11.80 a share.

“We are, in my opinion, still dramatically undervalued. The stock has moved up a little bit, compared to where it was, but it’s way down off its highs,” Bell said.

Rivada aims to begin launching the satellites as early as 2025.

The company said that it can begin commercial service once 100 satellite are in orbit, with plans to increase its network to the 300 — and eventually 600 — satellites to improve global coverage and redundancy.

The company wants to build an interconnected global satellite network, with emphasis on high-speed and security. Rivada’s Chief Strategy Officer Diederik Kelder told CNBC that the difference between his company’s planned network and those like SpaceX’s Starlink is that the latter are “specifically designed for broadband.”

“We have designed our system from the get-go to cater to enterprise and government customers,” Kelder said. “You can use the system for other purposes, but it gives us a very specific edge in those markets.”