Sidus Space (NASDAQ: SIDU) received a Notice of Effectiveness from the SEC on November 12th and the same day issued a Prospectus concerning sale of 4,520,000 shares at $1.25. SIDU stock then trading at $2.25 accordingly tumbled downward the next day. When it was all over, Sidus Space shareholders lost 47.1% on November 13th. Sidus had previously published an “assumed public offering price” of $2.67. As predicted on this site on October 17th, SIDU’s offering price was well south of this. Sidus lacks large capital reserves and continues losing money each quarter. With no profit from Lizziesat expected, the pattern already documented on this site of Sidus engaging in below-market stock offerings crushing its stock price likely will continue.
Examining the deals of this particular raise shows the terms are generally the same as its prior offerings. Sidus Space engaged ThinkEquity again as underwriter. This is ThinkEquity’s forth time in this role for Sidus Space. Under the terms outlined in the prospectus, ThinkEquity buys shares from Sidus at $1.625 to offer to the public at $1.25. Sidus Space also per the same terms is due to ThinkEquity a 1.0% expense allowances and up to $197,500 in other fees. Sidus stands to raise about $5m to $5.1m from this deal. And ThinkEquity stands to earn about $600,000 in fees and commissions. (Potentially more could be raised by Sidus through sale of pre-funded warrants or over-allotment shares also being offered.)
The Stocktwitts board still has a strong showing of SIDU believers, along with a growing contingent of Carol Craig haters. Hard to blame them. SIDU management has made multiple statements leading investors to possibly infer each Lizziesat will offer substantial high-margin revenue. As covered on this site, we believe a heavy amount of skeptism is warranted.
Lastly, some interesting reporting by Kursiv on this. Kursiv notes that Sidus Space is covered by a single analyst – ThinkEquity. And ThinkEquity has a $10 price target on SIDU stock. The same ThinkEquity earning half-a-million from bookrunning each SIDUS stock offering. Even if Sidus is not paying ThinkEquity directly for analyst coverage, such analyst coverage seems shady. It should remind investors of when Sidus Space bought favorable analyst coverage from Taglich Brothers, all while SIDU stock slid down, down, down. Any price target ThinkEquity places on SIDU stock maybe should be taken with a similar grain of salt.