Is it a common practice for a company to change its leadership and replace the CEO in the wake of an IPO? Hardly, unless leadership makes the procedure of going public more complicated. Just like in the case of Mikhail Kokorich, a businessman with Russian roots and the founder and a former CEO of Momentus Space.
What's the Story
An unscrupulous entrepreneur who seems to be in hot water with the US officials all the time, Kokorich launched Momentus Space in 2017. It's a corporation that specializes in propulsion systems for satellite delivery. The company's most promising product is Vigoride, which is essentially an orbital transfer vehicle (OTV - to be brief). It lowers the cost of satellite delivery by utilizing a proprietary water-based proportion system.
Before establishing Momentus, Kokorich was forced to divest from his previous satellite company by federal agents. They were worried that certain foreign investors might have too much access to technologies deemed too dangerous and sensitive to fall in the hands of foreign officials.
In the case of a rocket building startup, Lev Khasis is one of the foreign investors that Kokorich is suspected to be in constant connection with. Khasis holds a top-management position at Sberbank - one of the largest state banks in Russia - and may have ties to Vladimir Putin.
With so much negative speculation surrounding Kokorich, it is no wonder that he happened to have some restrictions after the 2018 federal investigation into Kokorich's immigration status. Following regulatory requirements, the future Momentus public company prohibited him from accessing technical information. However, he was the company's CEO at the time.
In October 2020, Stable Road Acquisition Corporation with backing from Stable Road Capital showed interest in acquiring Momentus and taking the company public to the exchange. This news then sent the stock price soaring almost to double its price before the announcement. That is until a slight drop a few days ago after the news broke of Kokorich's departure as CEO from the company.
Kokorich stepped down after all the investigations and restrictions began to interfere with the company's recent attempt to go public. Dawn Harms, the space startup's CRO, will be taking over as interim CEO.
Comments from Momentus & Stable Road
Only time will tell if Kokorich's resignation will appease government officials. Yet, there's a massive chance that the resignation by itself won't be enough. Even if Kokorich is no longer a CEO, he remains the owner and majority shareholder at the future Momentus public company with no plans of that changing anytime soon.
Brian Kabot, the CEO at Stable Road Acquisition Corp., believes that the recent leadership change will positively influence the space startup's future success. He thinks that it will alleviate many US government anxieties. According to his statement, the resignation of Mikhail Kokorich may "expedite the resolution of US government national security and foreign ownership concerns".
Mikhail Kokorich hasn't done his firm any favors with all the negative attention focused on the company because of him. There is a big chance that Momentus will have to deal with the negative reputation for quite a bit of time.