Merlin Labs shares jump 24% on new options listing
Autonomous flight software company expands trading strategies three weeks after $200M SPAC merger
Merlin Labs shares surged 24% on Wednesday, extending a volatile debut period for the autonomous flight software developer that recently completed a $200 million business combination to become a publicly traded company. The stock rallied to $7.82, pushing the company's market capitalization above the $500 million threshold to $531 million, according to market data.
The catalyst for Wednesday's move appears to be the introduction of new options contracts on Merlin Inc., expanding investment strategies for stakeholders in the Boston-based technology firm. Two new option listings were announced on April 8, providing traders with additional tools to express views on the company's prospects.
The options listing comes less than a month after Merlin Labs began trading on NASDAQ under the ticker "MRLN" following its business combination with Inflection Point Acquisition Corp. IV. The transaction, which closed on March 16, raised approximately $200 million in gross proceeds and valued the company at $800 million on a pre-money basis.
Merlin Labs specializes in developing AI-powered autonomous flight systems for fixed-wing aircraft, with its core "Merlin Pilot" technology designed to enable planes to fly autonomously from takeoff to touchdown without human crew. While the company has ambitions to revolutionize civil aviation, its immediate revenue generation is primarily rooted in the defense sector, where it has secured over $100 million in contracts from military customers.
The company counts among its notable defense contracts a $105 million agreement with U.S. Special Operations Command to integrate the Merlin Pilot onto the C-130J Super Hercules transport aircraft. Additional projects include work with the U.S. Air Force for pilotless operations on the KC-135 Stratotanker and a $16 million Air Force contract for C-130J aircrew workload management.
Despite the recent momentum, Merlin Labs faces significant financial challenges. The company reported an operating margin of -1,428% and a net margin of -1,558%, with earnings per share of -$0.16. An auditor expressed "going concern" doubts in January, and the company holds a negative equity position with a debt-to-equity ratio of -0.1.
Revenue remains modest at $0.86 million with no growth over the past three years, though the company projected $32 million in revenue for 2026, up from $8.5 million in 2025. The stock's valuation metrics show a high price-to-sales ratio of 630, which some analysts suggest may indicate overvaluation.
The company's investor base includes institutional backers such as Baillie Gifford, which continued to support Merlin in the SPAC deal, alongside earlier investors including GV (formerly Google Ventures), First Round Capital, and Snowpoint Ventures. Founded in 2018, Merlin employs approximately 200 people and demonstrated its technology on platforms including the Beechcraft King Air and Cessna Caravan.
The options listing provides market participants with additional ways to trade the stock, which has experienced significant volatility since its public debut. The stock plunged 62% on the day the SPAC merger was announced in March, reflecting broader market skepticism toward SPAC-originated listings and concerns about share dilution.