The Swedish satellite manufacturer, AAC Clyde Space, with a facility in Glasgow, continues to see a dramatic drop in its share price, way beyond the already declining financial markets. While the global financial market is in meltdown as a result of the coronavirus crisis, with the FTSE 100 seeing a drop of around 25%, the AAC Clyde Space shares started dropping well before the coronavirus appeared.
The company was looking fighting fit back in 2018 when it announced that satellite constellations were going to be the keystone of their growth plans.
At around the same time, the company announced it was building the first of Kepler Communications satellites. Kepler were then planning to put up to 140 satellites into orbit and it was looking likely that Clyde Space would secure that contract.
AAC Clyde Space share price at that time was hovering around the 0.52 Euro mark, with a bright future on the horizon. It then experienced a significant drop from then until March 2019 when it hit 0.24 Euros. But by mid-April the share price shot straight back up to 0.51 Euros.
The Swedish company then experienced a gradual decline in share price in September 2019 as Kepler announced that it was reviewing its satellite architecture, although there was no sign at that point of them making changes to their manufacturing plans.
However, that all changed in January 2020 when Kepler made the remarkable announcement that they were taking satellite manufacturing in-house. AAC Clyde Space shares were hovering around the 0.43 mark at that point. They then went into a sharp decline and yesterday they hit an all time low of 0.21 Euros.
Clyde Space and other CubeSat manufacturers didn’t take the news well about Kepler taking their manufacturing in house.
Craig Clark, CEO of AAC Clyde Space said “If someone said to a cubesat builder, can you build 100 satellites like the one you just did, they would bite their hand off to do it. But they’re not being given a chance to do it.”
Kepler CEO, Mina Mitry was quoted as saying “Manufacturers aren’t ready to build Kepler’s constellation of 10-kilogram cubesats quickly, affordably and reliably enough”
Other than a recent announcement of a $575,000 contract to supply batteries for a lunar lander, there really hasn’t been a lot of good news out of the Swedish satellite company and the dramatic decline of its share price will further hurt the manufacturer as the market appears to be going through a phase of transition and it is likely that the long established manufacturers simply aren’t geared up to create large constellations without significant inward investment and changes to the way in which they work.
AAC Clyde Space also announced they were a “preferred supplier” for NSLComm in a contract that could be worth $1.56m. But none of that seemed to turn its fortunes around, as that announcement came around the same time as Kepler’s pledge to take its manufacturing in-house rather than offer it out to tender.
Clyde Space background
AAC Clyde Space started life as a Scottish satellite manufacturer, founded in 2005, which was then bought over by Swedish company, AAC Microtec at the end of 2017 in a deal that valued the company at £26.2m.