By Al Root and Kit Norton

Rocket Lab wants to be more like SpaceX. Investors love the idea.

Rocket Lab is making an $8 billion strategic shift. It's buying satellite Iridium Communications.

Rocket Lab will pay $54 a share in a cash and stock transaction.

The stocks of both companies popped in premarket trading on Monday. Rocket Lab gained 11%, to $93.89, and Iridium surged 22%, to $53.14. S&P 500 futures were up 0.9%.

Rocket Lab called the acquisition "one of the most transformative deals in the space industry." It makes Rocket Lab, which has been called a mini-SpaceX by virtue of its ability to launch things into space and make satellites, even more like Elon Musk's rocket company.

Rocket Lab's market value of about $55 billion makes it a "mini." SpaceXis worth $2 trillion — and launches more larger rockets more frequently.

SpaceX runs its own space-based communications satellite constellation, Starlink, which has amassed more than 10 million subscribers, and generates billions of dollars a year in profits.

"By marrying Iridium's deep heritage, trusted infrastructure, and highly sought-after [wireless] spectrum with Rocket Lab's extensive and proven launch and manufacturing capabilities, we have the capability to unlock entirely new markets," said Peter Beck, Rocket Lab's CEO, in a statement.

Wireless spectrum is the frequencies calls and data travel. Just like two radio stations can't broadcast on the same frequency, wireless data operators need their own frequencies to deliver services. For example, SpaceX has purchased wireless spectrum from EchoStar.

Despite Monday's early jump, Rocket Lab is still far off its 52-week high of $151 a share reached in May. Many space-related stocks jumped ahead of SpaceX's June SpaceX IPO. Still, shares were up 136% over the past 12 months, heading into Monday trading.

Iridium is close to its 52-week high. Coming into Monday trading, shares were up 44% over the past 12 months.

Space is becoming a hotbed for communications investment. Space launch capabilities are a key enabler to take a slice of that pie. That's what Rocket Lab is betting on anyway.

Write to Al Root at [email protected] and Kit Norton at [email protected]

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