Elliott Takes 'Several Hundred Million' Stake in Hypersonic Pioneer Stratolaunch
January 19, 2026 · by Fintool Agent
Elliott Investment Management, the activist hedge fund known for aggressive campaigns at public companies, is making an unusual bet: a "several hundred million dollar" investment in Stratolaunch, the privately held hypersonic flight company that operates the world's largest airplane and has delivered America's first reusable Mach 5+ vehicle since 1968.
The deal, reported by the Wall Street Journal, will give Elliott board representation at the Mojave, California-based company—a departure from Elliott's typical playbook of acquiring stakes in publicly traded companies and pushing for strategic changes.
Paul Allen's Vision, Reborn
Stratolaunch carries an extraordinary pedigree. Microsoft co-founder Paul Allen founded the company in 2011 with an audacious goal: launch satellites into orbit from a flying platform at reduced cost compared to ground-based rockets.
To accomplish this, Allen commissioned the Roc—a twin-fuselage behemoth with a 385-foot wingspan, making it the world's largest airplane. The six-engine carrier aircraft first flew in 2019, but Allen did not live to see it; he died in October 2018.
After Allen's death, new ownership pivoted Stratolaunch from satellite launches to something even more strategically valuable: hypersonic test services for the U.S. military. The result is the Talon-A, a fully recoverable uncrewed hypersonic vehicle that marked a historic achievement in December 2024—the first time America returned to reusable hypersonic flight since the legendary X-15 program ended in 1968.
Ask Fintool AI AgentWhy Hypersonics Matter Now
The timing of Elliott's investment reflects growing urgency in Washington. The Pentagon's FY2026 budget request includes $3.9 billion for hypersonic weapons—down from $6.9 billion in FY2025 as programs mature—but remains a top priority as the U.S. races to catch up with adversaries.
Both China and Russia have fielded operational hypersonic weapons, while the United States is still developing prototypes. Hypersonic glide vehicles can maneuver at speeds exceeding Mach 5 (about 6,200 km/h), making them difficult for existing air and missile defense systems to intercept—a characteristic that has driven the arms race.
Stratolaunch's value proposition is unique: the Talon-A can be recovered, refurbished, and flown again—dramatically reducing the cost of hypersonic testing compared to expendable vehicles. In March 2025, the Pentagon confirmed a second successful flight within three months of the first, proving reusability and marking a critical milestone.
"Demonstrating the reuse of fully recoverable hypersonic test vehicles is an important milestone," stated George Rumford, Director of the DoD Test Resource Management Center. "Lessons learned from this test campaign will help us reduce vehicle turnaround time from months down to weeks."
The Defense Supply Chain
Stratolaunch operates within a complex web of Pentagon contractors. The company provides flight test services for the Multi-Service Advanced Capability Hypersonic Test Bed (MACH-TB) program under a partnership with Leidos+0.69%, which serves as the prime contractor.
Leidos+0.69% has been growing steadily, with quarterly revenue approaching $4.5 billion:
| Metric | Q4 2024 | Q1 2025 | Q2 2025 | Q3 2025 |
|---|---|---|---|---|
| Revenue ($B) | $4.37 | $4.25 | $4.25 | $4.47 |
| EBITDA ($M) | $493 | $596 | $637 | $609 |
| EBITDA Margin | 11.3% | 14.0% | 15.0% | 13.6% |
Values retrieved from S&P Global
The broader hypersonic industrial base includes Lockheed Martin+0.79%, which builds the Air-Launched Rapid Response Weapon (ARRW) and Long-Range Hypersonic Weapon systems; RTX Corporation+1.05% (Raytheon), developer of the Hypersonic Attack Cruise Missile (HACM); and Northrop Grumman+1.88%, which works on scramjet technologies.
Ask Fintool AI AgentElliott's Expanding Defense Play
The Stratolaunch investment extends Elliott's growing presence in aerospace and defense—though through an unconventional vehicle.
Elliott has been actively pushing for change at Honeywell+2.07%, where it holds a stake worth more than $5 billion and has advocated for spinning off the aerospace division. The firm also holds significant positions in other defense-adjacent names, including Howmet Aerospace.
What distinguishes the Stratolaunch deal is Elliott's willingness to take a private growth stake rather than acquire shares in a public company to agitate for change. This suggests the firm sees transformational upside in hypersonic test services as Pentagon budgets flow toward the technology.
"I am in awe of what this team has achieved," said Dr. Zachary Krevor, Stratolaunch's CEO. "We've executed four incredible Talon-A flights, completed twenty-four Roc flights to date, flew two new supersonic and hypersonic airplanes in a single year, and we are firmly on the path to making hypersonic flight test services a reality."
What to Watch
The investment raises several questions for defense investors:
Contract pipeline: Stratolaunch has said it has a full flight manifest through 2025 and has begun booking 2026 tests, with customers including the Missile Defense Agency. Elliott's capital could accelerate expansion of the test fleet.
Potential IPO: With substantial private investment and proven technology, Stratolaunch could become an IPO candidate in the defense tech space, joining a cohort of emerging dual-use aerospace companies.
Pentagon budget trajectory: The FY2026 budget allocates $13.4 billion total for hypersonic warfare programs, including offense, defense, and science & technology development. Continued funding supports Stratolaunch's long-term outlook.
For now, Elliott is betting that Paul Allen's vision—reimagined for an era of great power competition—has the altitude to fly.
Ask Fintool AI AgentRelated Companies:
- Leidos Holdings+0.69% - MACH-TB prime contractor
- Lockheed Martin+0.79% - ARRW, LRHW hypersonic systems
- RTX Corporation+1.05% - HACM scramjet missile
- Northrop Grumman+1.88% - Hypersonic glide vehicle technologies
- Honeywell+2.07% - Elliott activist target with aerospace division