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Why SKY and Space Global Ltd (ASX:SAS) shares rocketed 26% higher today

One of the best performers on the Australian share market so far on Monday has been the SKY and Space Global Ltd (ASX: SAS) share price.

Its shares returned from a trading halt with a bang this morning and rocketed 26% higher to 7.2 cents.

Since then the satellite company’s shares have dropped back a touch but are still up 10.5% to 6.3 cents at the time of writing.

Why are SKY and Space Global’s shares rocketing higher?

This morning SKY and Space Global’s shares emerged from their trading halt following the release of an announcement relating to its Pearl nanosatellites.

According to the release, the company has completed the critical design review of the Pearls and the nanosatellites have progressed to assembly and integration.

The review was undertaken by global aerospace construction partner GomSpace, which is a Nasdaq-listed contractor specialising in the construction and testing of bespoke nanosatellites.

The assembly and integration of the Pearls is scheduled to commence immediately and construction of the first batch is expected to complete on time for the launch.

What’s next?

Management has advised that once construction and integration are complete, the nanosatellites will then pass through various other final assessments and testing including a final acceptance test before launch.

After which they will be launched into space in 2019 with the aim of providing reliable and affordable connectivity services to people and businesses in remote geographies and, importantly, potentially begin generating meaningful revenues for the company.

Should you invest?

I think that SKY and Space Global is an exciting company and believe there is a market for its services.

However, it is a little too soon for an investment in my opinion. In light of this, I would suggest investors wait for the launch and see how its revenues develop.

In the meantime, fellow up and coming tech shares such as Citadel Group Ltd (ASX: CGL) and ELMO Software Ltd (ASX: ELO) may be better options for investors.

Alternatively, this exciting tech share could be the best of the lot.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended ELMOSFTWRE FPO. The Motley Fool Australia owns shares of Citadel Group Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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