Firefly Aerospace Inc. (FLY) experienced a pre-market plunge of 6.11% on Friday, following a highly successful initial public offering (IPO) debut the previous day. The space technology company's stock decline comes as investors appear to be reassessing its valuation after the initial excitement surrounding its market entry.
On Thursday, Firefly Aerospace made a strong debut on the Nasdaq, with shares opening at $70, representing a 56% increase from its IPO price of $45. The stock reached an intraday high of $73.90 before settling at $60.35 by the close, still up approximately 34% from its initial offering price. The company raised nearly $870 million through the sale of 19.3 million shares, surpassing initial expectations and giving it a valuation of over $11.6 billion.
However, the pre-market decline suggests that some investors may be taking a more cautious stance on the space technology firm. While Firefly Aerospace boasts a significant contract backlog of $1.1 billion and recent success with its Blue Ghost lunar lander, the company is not yet profitable. As stated in its filings, Firefly expects to incur net losses for the next several years, which may be prompting a reevaluation of its near-term prospects and justifying its lofty valuation. This profit-taking and reassessment following a strong IPO debut is not uncommon, as the market seeks to find a more stable price point for the newly public company.
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