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LONDON - Seraphim Space Investment Trust (SSIT), a fund dedicated to the commercial space sector, has reported that a significant portion of its investments are defense-related, with approximately 78% of its portfolio having applications in defense. This includes companies like ICEYE and ALL.SPACE, which are integrated into the operational infrastructure of European and US militaries. Despite the strategic importance of these holdings and a 130.4% increase in the value of its private investments since its inception, SSIT’s shares are currently trading at a 47% discount to their net asset value (NAV).
The trust’s valuation gap may be short-lived, given the growing global focus on defense spending. The European Union’s €800 billion ReArm initiative and the United Kingdom (TADAWUL:4280)’s rising defense budget reflect a broader trend of increased military expenditure, which is expected to drive demand for space-enabled defense capabilities. Many of SSIT’s portfolio companies are showing financial resilience, with sufficient cash runways and expanding commercial engagement.
As geopolitical tensions mount and defense budgets expand, there is a potential for SSIT’s holdings to be re-evaluated, potentially aligning their market valuations more closely with peers in the aerospace and defense sector. This could be facilitated by easing macroeconomic pressures, such as interest rates.
The information in this article is based on a press release statement from QuotedData. It is important to note that the research provided by QuotedData is for informational purposes only and is not intended to promote trading in the securities mentioned. QuotedData operates under Marten & Co, which is authorized and regulated by the Financial Conduct Authority but does not offer investment advice to retail clients.
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