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Terran Orbital (NYSE:LLAP) stock surged as high as $3.41 this morning after receiving a massive $100 million investment from Lockheed Martin (NYSE:LMT). After that high, LLAP stock closed the day at $2.62, up more than 2%. In exchange, Terran will provide Lockheed with convertible notes and warrants. The company engages in the development of small satellites and satellite-based solutions, primarily serving the U.S. and its allies.
Terran will provide Lockheed with warrants to purchase 17.25 million shares of LLAP stock at an exercise price of $2.89. The price will factor in a 15% premium. Meanwhile, Lockheed will receive convertible notes at $2.89 — factoring in a 15% premium as well — that will mature on Oct. 31, 2027. These notes are convertible to about 34.5 million shares of common stock upon issuance and will carry an interest rate of 10%.
Lockheed’s investment will contribute towards satellite assembly space, increased module production and other working capital expenses. Terran CEO Marc Bell added the following about the deal:
“This is a continued expansion of our collaboration with Lockheed Martin, and complements and accelerates the decision Terran Orbital made amid the lingering supply chain crisis to continue to vertically integrate products and components to facilitate full in-house satellite and manufacturing production.”
As part of the investment, Terran’s manufacturing capabilities have been accelerated…
