Seraphim Space Investment Trust have seen shares rise by 18 per cent after buyback announcement

London-listed investment trust Seraphim Space shares soared on Thursday after it revealed a buyback plan.

The trust, which invests in early stage ‘SpaceTech’ companies, has enlisted investment bank Morgan Stanley to repurchase up to 35,883,800 of its ordinary shares.

However, it does not intend to use all of its permission to buyback up to 14.99 per cent of its shares and it has not set a discount target.

Analysts at Quoted Data said: ‘Nevertheless, shareholders will be pleased to see the board take some action to tackle a discount that currently stands at a ridiculous 71.6 per cent].

Seraphim Space, the global leader in SpaceTech investment, has seen its shares sky rocket to 18 per cent after it announced buyback plan

Seraphim Space shares rallied 14.9 per cent by late afternoon on Thursday to 30p, bringing losses for 2023 so far to 36.8 per cent. 

The trust’s share price woes and steep discount to net asset value reflect tougher times for the space industry, with investors pulling back from riskier assets and the sector suffers waning enthusiasm in the wake of Virgin Orbit’s collapse.

It also announced that 11 companies within its portfolio have successful closed investment rounds during the year to 30 June. 

The majority of the rounds were led by new external investors, with SSIT participating in two-thirds of the rounds.

Out of the 11 companies, six of them were made at higher valuations in comparison to the previous rounds with only one round at a lower valuation.

The company stated that the ‘this positive investment activity demonstrates the continued strength of the portfolio companies and the increasing market recognition of their potential’. 

Morgan Stanley estimates revenue generated by the global space industry may increase to more than $1trillion by 2040

In 2021, Seraphim Space Investment Trust became the first focused on space technology to list in London.

The groups’ supports over 100 companies which have collectively raised $2.2billion in equity funding and enterprise value of more than $10billion.  

Among its top holdings are satellite companies Globalstar, Iridium Communications and Garmin. 

The group have stated that they mainly seeks exposure to early and growth stage private financed SpaceTech businesses that have the potential to dominate globally.

They also that the companies they look are sector leaders with first mover advantages in areas such as climate, communications, mobility and cyber security.

Space exploration has come a long way from the first trip to the moon nearly half a century ago with more private funding, better tech and growing interest from the public sector.

It has piqued the interest of some of the world’s most successful businessmen, like Sir Richard Branson, Elon Musk and Jeff Bezos.

Morgan Stanley estimates revenue generated by the global space industry may increase to more than $1trillion by 2040. 

In its full-year results published this week, Seraphim recorded a £4.3million revenue loss after tax in its first year and said it didn’t anticipate recommending a dividend in the foreseeable future.