First, a nap.

Whew. What a 24 hours? What? You don’t know? How would you? Let me walk you through the wild swings of investing in tiny stocks. Today’s stock: LUNR. They got great news. Didn’t they?

Some background: 
LUNR is a company that is literally working out of this world. Their market is the business of exploring and exploiting the moon. Might as well call it exploiting, because that’s what moon mining is. The alternative is exploiting our planet and doing so inefficiently. People want to do stuff on the moon, then use the stuff that’s there rather than here. If we’re going to build a lifeboat for the species, it makes sense for it to be on a different berth. Currently, their tasks are simpler: landing rovers, launching moon satellites, etc. Think of the Earth observation stuff we did fifty years ago. Hopefully, the trading symbol makes sense now, LUNR. The company name doesn’t, Intuitive Machines. I suspect there was reasoning there. I don’t plan to dive into it, yet.

I bought stock in them recently. (https://trimbathcreative.net/?s=LUNR) I am an ex-aerospace engineer, so I have a better chance than many analysts at understanding what they’re doing. Imagine investing in aerospace in 1970. There was pain, but eventually, there was gain.

At the end of most trading days, I log in and look for news. Usually, there’s nothing. Huh? Hey, the stock was up 1.27% after the market closed. Nothing grand, but something must be going on. Huh? It wasn’t up 1.27%. It was up $1.27. Check those units. $1.27 on a stock that was trading for under $5 is a big jump. When I checked, LUNR was up over 20%. That’s worth rescheduling a bit of the day.

The gain looked like it was going to happen far sooner than fifty years. (https://www.intuitivemachines.com/post/intuitive-machines-strengthens-lunar-service-capabilities-with-116-9-million-nasa-lunar-contract-aw) LUNR has already successfully completed launches and landings (ignore the part where it fell over), and has been gaining credibility. Thursday afternoon (August 29, 2024), after the market closed, they announced a $116.9M contract with NASA. The most they ever made in a year was about $86M. This is significant. Their market cap was only about $500M. That’s a lot of revenue and a lot of asset growth – before expenses, or course, and before the work’s been done.

Some folks posted about checking every few minutes. It can be a heady time. Enthusiasm is unleashed and with reason. Sometimes, that enthusiasm has been steeping for years. What a relief, especially for those investors. 

I wasn’t as enamoured with the news. The post- and pre- markets are squirrely. They can be indicators, but they can also be simply confused. I checked every few hours, just for good grins.

Sleep happened in there somewhere, but not enough to keep me from taking that nap.
I woke up with anticipation. How did the pre-market do? Up. Still up. Good. It was holding, with some randomness as people interpreted the news. Big firms like Microsoft may barely budge over $116.9M. Even at that, I suspect a crowd of analysts would dive in to decide whether MSFT should nudge up and by how much. If LUNR had late-night analysts, I can imagine them all fitting into one of the larger booths at Denny’s.

6:30AM. The market opened. The previous price at market close had been $4.82. The price spiked to $6. There was some bobbling of the price, but that is the market doing what the market does, balancing the buys and sells to see what the new value is. Maybe the overshoot should come down to $5.60, or a few hours later $5.20, or by the end of the day’s $4.97. A 3% gain on such significant news. All that adrenaline draining and wasted, at least for some. For me, I’ve seen it before. Good news is good news. Celebrate that. The daily details aren’t as important unless the stock needs to be converted to cash for an emergency.

Why only move up 3%? The deed’s not done. Rockets blow up. Rovers fall over. Landers can land too hard, or not at all. Space is risky business. Even Elon loses rockets.

That puts the stock within a few percent of where it was a year ago.

The market value of a company can be based on its future revenues discounted by risk. A $116.9M check is worth $116.9M, but work must be done, which is a risk; rockets and such must be launched, orbited, and landed, which are risks; competition happens; disasters at the Earth facilities can happen; budget cuts happen; etc.; etc.; etc. If that check is going to arrive later, then inflation diminishes it. That reduces its present value. The check may be for $116.9M, but its value to the company and its influence on the stock is different. The analysts guess. The investors decide. Reality eventually reveals the truth.

That $116.9M check can also be worth more than $116.9M. The company is getting more business, and significant business. At some point, startups that succeed grow from hopefuls that may have just been lucky, to established businesses with confident revenues and income. It is only in retrospect that a SpaceX has hit its major milestone. Is this LUNR’s? Optimists may say yes. Pessimists may say no, or maybe not yet. Investors get to decide what are the odds, what level of risk are they comfortable with; and balance that against the possibility of gains. Wait too long and the risk may be gone, as well as the stock gains.

Celebrate good news for the news. Tonight’s dinner is ribs roasted at home, homemade cornbread, roasted corn on the cob, and probably some alcoholic beverage. (I bought a ridiculously sized bottle of local whiskey because it was on sale. Now, there’s value!) 

At a deeper level, as an investor, I am relaxing into the decision I made to buy the stock. That extra bit of confidence has a value as well. I didn’t and don’t plan on selling any time soon, so this is like watching a bare root tree prove itself with its first season of blossoms. Time to take a chair and a drink and sit and think as I watch the garden grow.

Congratulations to the people doing the work. Nicely done. I hope you get to celebrate, too.

I also hope I sleep better tonight.