Why Viasat Stock Went to the Moon Today
Key Points
Rocket Lab is buying Iridium in an $8 billion merger deal.
Viasat will now have to compete with a bigger Rocket Lab that owns its own spectrum.
Rocket Lab (NASDAQ: RKLB) is buying Iridium Communications (NASDAQ: IRDM) for $8 billion, as the two space companies just announced -- and it's getting investors in other space stocks pretty excited this morning.
Viasat (NASDAQ: VSAT) stock, for example, isn't involved in the RKLB-IRDM deal at all, but as of 10:50 a.m. ET it's already up 17.1% -- even more than Rocket Lab's 9.2% bump, and nearly as much as Iridium's 20.7% gain!
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Details, please
Rocket Lab will pay $8 billion in cash and stock to acquire the original satellite phone company, Iridium, and expand its business beyond mainly space launch and satellite construction to include Internet of Things (IoT), aviation, maritime, and Position, Navigation, and Timing (PNT) services.
Viasat isn't involved in the merger -- except that it kind of is.
What the Rocket Lab-Iridium tie-up means for Viasat
As a communications satellite company, Viasat competes directly with Iridium, and also with the Starlink network at SpaceX (NASDAQ: SPCX) -- with which Rocket Lab will now also be competing. You wouldn't ordinarily think this kind of increased competition would be good news for Viasat's business, which saw profits drop 29% last quarter, and grew its sales only 2%!
From this perspective, Viasat's share price spike today doesn't make much sense.
That said, in comments on the Iridium acquisition, Rocket Lab CEO Peter Beck highlighted the attraction of Iridium's wireless spectrum holdings. Viasat has those, too, and this could make it a future merger target, especially as the space industry restructures and consolidates to take on the threat of a bigger, wealthier SpaceX.
$RKLB
-- ValueOverPrice (@ValueInIdeas) June 29, 2026
Rocket Lab CEO Sir Peter Beck explains why the acquisition of Iridium is so crucial:
"If you want to do large scale communications globally, you must have spectrum. And for us, this deal really enables us to accelerate our entry into this market."
"And the reason why... pic.twitter.com/XE3ed3Di2K
This, if you ask me, is why Rocket Lab's buying of Iridium has Viasat investors feeling optimistic today.
Rich Smith has positions in Rocket Lab. The Motley Fool has positions in and recommends Rocket Lab. The Motley Fool has a disclosure policy.