Surf Air Mobility, an electric airplane company, will go public tomorrow, June 27, and trade under the ticker symbol SRFM.
The company wants to develop powertrain technology for electric planes that work with existing fleets. This would bring electrified aircraft to market at scale.
Electric Planes
Surf Air was founded in 2011 and has cycled through several business models. It began as a subscription service, then operated eight-passenger turboprops. In 2018, it even launched a blockchain-based loyalty program called “Voy.”
The company has found several partners in its latest iteration, among them Big Data company Palantir (NASDAQ:PLTR). As part of the deal, it is buying Southern Airways Express, a commuter airline serving 46 cities with 250 daily departures.
Other partners include TAI, AeroTEC, magniX, Jetstream Aviation Capital, SkyWest Airlines (NASDAQ:SKYW), and Signature Flight Support. MagniX is bringing its electrification technology to the party.
The direct listing for SRFM stock is for up to 18.8 million shares, priced between $5.93 and $11.86 per share, reflecting prices paid for Southern stock in private transactions earlier this year. The company hopes to raise about $200 million through the listing, near the high end of that range.
It could go higher, however. Surf Air recently signed an investment deal for $100 million with a unit of Gem Global. That stake could rise to $400 million after the public offering, based on an SRFM price of $25 per share.
Southern will also get 12% of SRFM stock in the deal. Southern previously tried to go public through a special purpose acquisition company (SPAC) called Tuscan Holdings Corp. II, but the deal fell apart last November.
Southern’s main asset may be its contract with the U.S. government to operate Essential Air Services (EAS) routes. The airline had revenue of $22.7 million in the March quarter, while Surf Air had $5.5 million. This is according to Surf Air’s S-1 statement.
SRFM Stock: What Happens Next?
Southern flies Cessna Caravan aircraft. Surf Air will try to create electric versions of the plane. If all the partners are pulling together, it should get the chance to prove its claims and build its plane.
As of this writing, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
