Boca Raton-based satellite builder Terran Orbital, now owned by Lockheed Martin, is facing a Class Action from investors alleging they were misled as the company’s status before the sale.

Investors allege that Lockheed originally offered $1 per share for Terran, the final deal price was struck at 25 cents and shareholders are now suing Terran to recoup their losses.

According to the lawsuit, in 2023, Terran won a major, multi-billion dollar contract from Rivada Space Networks. Terran company executives assured investors the Terran had adequate cash reserves and resources to fund the contract. In reality, says the allegation, company executives knew Terran was cash-strapped, unable to fulfil the order, and thus unlikely to profit on this contract.

In April 2024 Lockheed Martin offered to buy out Terran at one dollar per share, but soon withdrew that offer. Terran later announced that it was short on cash and removed the Rivada contract from its backlog, slashing the company’s outstanding contracts by almost 90 per cent.

Following this disappointing news, Terran announced that Lockheed had renewed its offer – this time at forty cents per share. Within hours, Terran announced its final deal with Lockheed, which valued Terran at just twenty-five cents per share.

The lawsuit states: “The filed complaint alleges that defendants made false statements and/or concealed that: (i) it would take much longer than defendants had represented to investors and analysts for Terran to convert its contracts with its customers (collectively, “Customer Contracts”) into revenue and free cash flow; (ii) Terran did not have adequate liquidity to operate its business while waiting for the Customer Contracts to generate revenue and free cash flow; (iii) Terran had concealed the true scope and severity of its dire financial situation; and (iv) as a result of the foregoing, Terran’s public statements were materially false and misleading at all relevant times.”

Other posts by Chris Forrester:

1. AT&T explains AST SpaceMobile strategy
2. ESA introduces Fair Return structure
3. New EU space boss explains strategy
4. Eutelsat suffers from negative bank report
5. MultiChoice, eMedia make peace
6. Eutelsat criticised over “Kremlin links”
7. Rivada Space “still working” with Terran Orbital
8. D2D: Power levels concerns
9. Thales Alenia planning to stay solo

Categories: Blogs, Business, Inside Satellite, Satellite

Tags: Lockheed Martin, rivada, Terran Orbital