Seraphim Space Investment Share Discussion Threads

[jonwig] 27/6/2022 05:47

Higher interest rates = future earnings discounted more heavily = valuation falls for jam tomorrow companies. Nobody knows when the Fed will stop (even the Fed).

There might be portfolio-specific factors too.

[davidro77] 27/6/2022 00:49

Brutal fall on Friday what caused that anyone know?

[spectoacc] 20/6/2022 18:43

Thanks both. Agreed re risk/reward, tho at some point it'll surely be worth a look again. Suspicious of any co that does the "the listed ones have fallen but we've up-valued some unlisted" trick.

[ec2] 20/6/2022 18:41

Ran the slide rule over these the other day and decided if I wanted to invest in growth (and I don't at present) there were better valued and more diversified opportunities elsewhere. Biggest listed holding which I estimated as now representing 15% of the portfolio has fallen another 62% since the 31Mar NAV calculation. It just shows how when the market was totally jam tomorrow growth oriented investors would buy more and more specialist niche areas to try and get that extra bit of return. These type of things are what falls hardest when the market turns. Fortunately I got out profitably and have stayed out. Possibly could be a short term bounce but the risk of timing it wrong and misjudging it is too high for me.

[jonwig] 20/6/2022 15:36

Not me. Lots of fairly safe opportunities around worth watching - no need to visit too much risk.

[spectoacc] 20/6/2022 15:31

Missed quite how far this had come off. Anyone tracking the listeds?

[davidro77] 09/6/2022 18:21

A bit like the trust's share price these days! This has turned into a bit of a dog hasn't it?Hard to see a recovery in this environment or guess how low it could go

[jonwig] 08/6/2022 07:10

Space debris, scary stuff:



Russia has already blown up a satellite (its own - just to prove that it can) and could easily take pot shots at more, to disrupt western comms.

[davidro77] 23/5/2022 14:25

Wow over 5% spread on this and now down to 85 to sell. Much further to fall I fear

[spectoacc] 16/5/2022 11:29

My thoughts too - the listed stuff has tanked, but "don't worry, we've hugely written up the value of D-Orbit to compensate".

Unconvinced a SPAC deal agreed in Jan will look quite so good when D-Orbit lists.

Having said that - SSIT's share price almost back into lower earth orbit.

Am in same position as @Jonwig.

[davidro77] 16/5/2022 11:23

Thanks, really interesting article as you say. One thing that jumps out is the absurd valuation of arqit. I know it's corrected but 4.7b val on maybe 25m of revenue was clearly out-of-orbit into interstellar space. And despite the useful explanations of what the businesses USP are, nothing really about how and when they'd become profitable above general blurb about the size of the market opportunity. I'm reading that that share price fall is a premium to discount correction not a fall in underlying NAV. But if so you have to worry about how seraphim are calculating that NAV on unlisted business in such a poor market. Can we be confident market falls are being reflected.

[jonwig] 16/5/2022 11:03

david - the sign-up is free, and it's an excellent article (author James Carthew always good). For example, it shows how the latest nav will be impacted by recent movements.

At some point I'll re-enter this, but the markets don't much want to know about future potential right now.

[spectoacc] 16/5/2022 11:01

Citywire's a freebie, but if it formats:


"Just 10 months ago, Seraphim Space (SSIT) managed to raise £150m from investors in an oversubscribed initial public offer. Stakes-for-shares swaps expanded the company, exuberant markets drove the shares to a 32% premium above net asset value (NAV), and by the end of 2021, the investment trust had a market value just shy of £300m.

However, as we all know, the market’s mood has changed. As I write this the share price is 92p, 11.5% below the recently announced 31 March NAV, and I fear the discount may widen from here.

Citywire’s Algy Hall last week published a great roundup of the state of the space sector highlighting the lack of mainstream fund managers active in the area. SSIT is unique – there isn’t a US equivalent, for example. It just held its first capital markets day with analysts and institutional investors and updated the market on progress within the fund. Attendees got to hear from some of the chief executives of the companies in SSIT’s portfolio.

Investors can take some comfort from the NAV performance to date. Even though the two listed businesses it holds – Arqit and Spire – have dived during the growth sell-off, an uplift in the value of one of its unlisted investments – D-Orbit – more than offsets this.


The portfolio represents a collection of really cutting-edge scientific solutions often addressing issues of which you may have been only vaguely aware, or brand new markets. The numbers bandied around are vast – alleged total addressable markets in the billions – and exponential growth rates targeted. However, in the more cynical environment that we now find ourselves in, basing a sales pitch on such metrics almost feels counterproductive.

The largest position at 16% of assets at the end of March is a Finnish company ICEYE. It was one of the investments that the trust acquired from the manager’s older limited partnership vehicle. ICEYE has an operational constellation of 16 small satellites surveying Earth with radar which allows it to operate at night and in cloudy conditions, taking images of locations every 24 hours. It is being used by insurance companies to monitor things like natural disasters.

ICEYE raised $136m in Series-D fundraising led by Seraphim Space in February. SSIT’s managers suggest that it could be looking to float later this year, markets permitting.

The next-largest position at 12.8% of assets was Arqit Quantum. It is a listed company, having reversed into a special purpose acquisition company (Spac), or what we used to call a cash shell, last September. Its share price has fallen by about 60% since the end of March, caught up in the general market malaise, and that will have taken about 8p off the trust’s 104p 31 March NAV. The other listed position – Spire Global – has been similarly afflicted and that will have taken another 0.5p off asset value per share.

Advances in quantum computing pose a threat to existing encryption standards, including those underpinning blockchain. Arqit has devised a system of symmetric encryption keys – where data is encrypted and decrypted using the same key, and the key is transmitted securely between the sender and recipient of the information. Transferring quantum information over fibre is only secure over short distances. Arqit transmits quantum information by satellite instead.

Even after the share price fall, Arqit has a market value of about $740m, down from a peak of about $4.5bn. Recently published half-year figures from the company, which is only just starting to commercialise its technology, disclosed revenue of $12.3m of which $5.3m related to its core Quantumcloud business. It held $82m of cash and had burned through $13.5m in six months. Markets are bad at valuing these sorts of businesses and to my mind, it has listed too early. Perhaps someone will opt to take the company private again.

Number three in the portfolio is Isotropic Systems. Chief executive John Finney gave a fascinating insight into the development of its system for communicating with multiple satellites in different orbits simultaneously. Until now, all communication with satellites has been on a one-to-one basis and even defence-funded research bodies had been stymied by the problem. Isotropic’s technology is a significant boost to communication systems and has applications in a wide range of fields. It is scaling rapidly. All of this year’s production slots are already sold out and much of next year’s. Finney reckons Isotropic may be ready to float in 2024.

The other two firms investors heard from were Astroscale and D-Orbit. Astroscale is looking at ways to manage the proliferation of potentially dangerous defunct satellite and orbital debris. Part of the problem is persuading governments and companies that they need firm plans for managing the issue, including stumping up the necessary funds. However, it is working with OneWeb on de-orbiting defunct satellites – locking onto docking plates installed on the satellites before launch and steering them towards burn-up on re-entry. Larger satellites can be aimed at the Pacific Ocean.

D-Orbit, whose focus is on space logistics, and already has operational vehicles taking satellites from SpaceX rockets to their final orbits, has grander ideas. It is experimenting with alternative uses for its ION satellite carrier spacecraft once their mission is complete. It is exploring ways of refuelling failing satellites and recycling them in space once they are defunct. That makes perfect sense to me, given the cost and effort required to get them up there.

The write up in the value of D-Orbit came as it is in the process of listing, again by reversing into a Spac. That deal, which was announced in January and is supposed to complete over the next few months, values D-Orbit at $1.4bn. The Spac, Breeze Holdings Acquisition Corp, still trades around its $10 launch price, but anything could happen in the aftermarket.

SSIT is a pioneer and path-breaking trails are often fraught with danger, but if the fund fulfils the vision of its management team, the rewards could be significant. One for adventurous bargain hunters."

[davidro77] 16/5/2022 10:57

Care to post the text as it's behind yet another sign up

[spectoacc] 16/5/2022 09:39

CityWire write-up:

[the millipede] 22/4/2022 10:17

In other news, Spire Global’s CEO just bought 1.8m shares.

[the millipede] 22/4/2022 10:16

I can’t answer those questions David, but they are good ones. I have heard pipeline potential revenue of $1bn, but don’t think that amounts to anything more than wishful thinking.

Also worth bearing in mind Arqit’s management were behind Avanti Communications, which didn’t exactly go well for shareholders.

[davidro77] 22/4/2022 00:15

Ok so in a nutshell this company's tech 'protects organisations against future threats from quantum computers.'Sounds really fancy but PKI still works today for the majority of companies and this seems like a hard sell to persuade cos to invest in future proofing for quantum tech which is up to a decade away or even more. What are the revenue numbers and projections, the website is slick but I've seen many like this that are future visionary but short on real world application today.If this Co is the largest holding would be good to understand the numbers but on the surface with this down so hard in recent days why hasn't the trust price declined further? Maybe an interesting short opp?

[the millipede] 21/4/2022 23:10

A few months ago I set myself a $10 buy target for Arqit. But now it has got there I am not sure.

[the millipede] 21/4/2022 23:08

Quantum Cloud version 1, which is currently on sale, does not involve satellites. Version 2 apparently will. AFAIK the satellites are yet to launch.

From the company website:


Arqit’s technology rests on inventions in two domains. The transmission of quantum information over fibre is secure but only at limited distances. Satellites can transmit quantum information over long distances (known as satellite quantum key distribution, or QKD), but the previously known protocols for QKD have major implementation flaws. We don’t do QKD, we invented our own quantum encryption methods which are trustless and provably secure. Arqit has invented a new quantum protocol which solves all the problems the world knows about, and some that it doesn’t.

[davidro77] 21/4/2022 22:39

The shares are now just over 8 bucks losing almost half again since that article came out on the 18th. Market cap under a bill. How big a stake does the trust hold? Why hasn't it fallen further And stupid question - what has a cyber sec company got to do with space anyway

[the millipede] 21/4/2022 10:17

Arqit down a further 30% ish over past week. SSIT flat.

[the millipede] 08/4/2022 23:26

Arqit posted revenue of $100m last year and, even after that 35% drop, has a market cap of over $1.5bn. There is a lot of growth priced in there IMO.