A shareholder is suing Rocket Lab, its CEO Peter Beck, and CFO Adam Spice, alleging they made materially false and/or misleading statements and failed to disclose material adverse facts about Rocket Lab’s business, operations, and true prospects.
Douglas Bray, who acquired 100 Rocket Lab shares in January 2025, filed the class action lawsuit last week in the US District Court, Central District of California. According to the claim, Bray is suing for himself and on behalf of other persons and entities that purchased or acquired Rocket Lab shares between November 12, 2024, and February 25, 2025.
Founded in New Zealand, Rocket Lab is now a California-based NASDAQ-listed business responsible for 14 launches last year and two so far this year. All but one of those launches were from the Mahia Launch Complex on New Zealand’s North Island using their Electron two-stage rocket.
Rocket Lab is also developing a more powerful rocket called Neutron. Bray alleges the company and its two senior officers have not been straight up about Neutron’s development, launch timeline, and initial customers.
Over-egging progress?
During a September 2024 earnings call, Beck spruiked Neutron’s progress, saying the company had made significant progress on the rocket’s structures and infrastructure and signed a launch service agreement with a customer for multiple launches.
Bray claims the company and its officers made statements during that call about Rocket Lab’s business, operations, and prospects that were materially misleading, or, at best, lacked a reasonable basis.
Underpinning Bray’s claims is a report recently released by Bleeker Street Research that cast doubt on Rocket Lab’s claims about Neutron’s progress and launch timelines.
Rocket Lab sticks with 2025 Neutron launch target
Specifically, Bray says the company should have disclosed that plans for three barge landing tests were significantly delayed and that a critical potable water problem at the Wallops Launch Pad in Virginia was not scheduled to be fixed until January 2026.
On this basis, Bray says Rocket Lab’s claim that it was on track to launch the first Neutron rocket in mid-2025 was misleading. He further alleges the confidential launch customer is a startup called E-Space, run by entrepreneur Greg Wyler, and the launch price tag was heavily discounted down from Beck’s stated USD50 – 55 million.
“We believe E-Space is a lot more bluff than substance when it comes to actually getting things done,” the filing reads and suggests that if the launch service agreement falls over, it will further hurt cash flows at Rocket Lab and damage the share price.
Bray alleges violations of s.10(b) and 20(a) of the US Exchange Act. He is seeking compensatory damages, costs, and further relief as the court sees fit. His lawyers have invited other shareholders who suffered a loss during the class action period to join the lawsuit.
Space & Defense has contacted E-Space and Rocket Lab for comment.
