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Rockets and Duds: Week 12 – March 10, 2025

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Rockets and Duds: Week 12 - March 10, 2025

5i Research Weekly Rockets and Duds

Okta Inc. OKTA 🚀🚀🚀 Okta went against the crowd last week, and certainly against its cyber-security peers, which were dropping like rocks after weak results. Nope, Okta does things its own way, reporting a solid fourth-quarter earnings beat and raised guidance. Okta rose 24% last week and is now up 43% for the year. Multiple brokers upgraded the stock.
When world markets go into a total collapse, and wars, trade and otherwise, are breaking out everywhere, it can pay for investors to get back to the basics. Everyone needs water, right? Middlesex, which stores and distributes water in New Jersey and Delaware, reported a big beat over earnings estimates and the stock rose 28% last week while everything else melted. It’s good to know that something worked last week. I wonder if there are any ‘air’ companies. That would be a winner, we’re sure.
CoreWeave, an AI data centre company, was planning to go public soon, with an AI-high valuation. But Microsoft pulled some contracts from the company, citing delivery issues and missed deadlines. Since Microsoft represents 62% of revenue, the IPO may not happen now at all. How does this impact Core Scientific? Well, Core Scientific has a 12-year contract with Coreweave, with the latter gaining access to 200 MW of power capacity to support its AI cloud growth. Core Scientific expected to get $10.2 billion over the life of this contract, and now……….likely a lot less. Core Scientific fell 30% last week as investors remembered the ‘core’ principle of being wary of customer concentration.
When your main business is landing crafts on the moon, it is never a good idea to have your landing craft tip over. LUNR fell 40% last week on news that its Athena lunar lander missed its intended target by 250 metres, and then tipped over on its side. The position of the lander prevented solar panels from being deployed, so the batteries died, and the mission is now over. Athena is the ancient Greek goddess associated with wisdom, warfare and handicraft. The Greeks apparently did not think about landing on the moon.
Question: What’s the fastest way to piss off new shareholders in your company? Answer: Go public at $25.00 per share in late January, report weak results in your first-ever quarter as a public company, and have your stock decline to $9.25 by mid March. Venture Global, an LNG company, saw its shares fall 39% last week on a weak 2025 forecast. Investors in the IPO are now down 63% in one of the worst IPO performances of the past five years. Of course, the decline brought on the usual barrage of class-action lawsuits. Certainly the underwriters have egg on their faces here. I.P.O: Incredibly Painful Offering.
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