Key insights
- Planet Labs stock has experienced a significant decline, contrasting with SpaceX's strong performance post-IPO. Despite Planet Labs' current struggles, a surge in call options relative to put options suggests investor anticipation of a substantial rally. This optimism is underpinned by Planet Labs being one of the few space companies generating positive free cash flow, unlike SpaceX which has a high cash burn rate. The article posits Planet Labs as the superior value investment.
Don't say you were not warned.
Previewing the SpaceX (SPCX +4.36%) IPO earlier this year, I explained what investors should expect -- in three simple steps.
We're in this final stage now, and Planet Labs stock is down 20% since SpaceX's IPO.
Planet Labs stock dropped another 11% through 10 a.m. ET today -- while SpaceX stock gained nearly 14%. This brings to mind the old advice "follow the money," except here, the money trail is so obvious you don't really need to do much following.
Investors are pulling money out of Planet and pouring it into SpaceX stock instead.
For Planet Labs investors, this has to feel discouraging -- but don't lose hope, because the money flows on this one could soon reverse. According to data from StreetInsider.com, call options to buy Planet Labs stock at much higher prices than today are currently outrunning put options to sell Planet stock by a 3-to-1 ratio.
This tells me that serious investors are preparing for a serious rally in Planet stock -- and they may be right. After all, according to data from S&P Global Market Intelligence, Planet Labs is one of the only space stocks generating positive free cash flow today -- versus SpaceX, which burned $14.1 billion in cash last year.
It's really no contest. Planet stock is the better value play here.