Firefly Aerospace Owner Max Polyakov Sells Stake to Tom Markusic

Max Polyakov

Firefly Aerospace majority stakeholder Max Polyakov announced he was selling his shares to company co-founder and CEO Tom Markusic in a bitter message on his Facebook page.

I am giving up for 1 usd consideration all my 58% stake in Firefly to my co-founder and partner Tom. Dear CFIUS, Air Force and 23 agencies of USA who betrayed me and judge me in all your actions for past 15 months . I hope now you are happy . History will judge all of you guys. Max love Ukraine and yes I have Ukrainian passport and I am Founder of Firefly !!! Bye my “bird” and at the end of the days I proud what I done for my Land soul and heritage !!!

CFIUS is the Committee on Foreign Investment in the United States. Late last year, the committee required that Polyakov, who is Ukrainian, sell his stake in the company. Bloomberg reported:

Government and aerospace industry officials have expressed objections to Polyakov’s control of the company amid fears that valuable technology could make its way to Ukraine, Russia or other nations trying to develop rocket programs. Despite putting more than $200 million of his fortune into Firefly, Polyakov agreed to step down from the company’s board and Firefly’s day-to-day activities in late 2020 to help make it easier for the company to win U.S. government and military contracts and ease some of the underlying tensions. 

In late November, however, Polyakov received a letter from the Committee on Foreign Investment in the U.S., or CFIUS, that called out national security worries and requested that Polyakov and his investment firm Noosphere Venture Partners sell off their roughly 50% stake in Firefly. Polyakov agreed to this demand, according to his spokespeople, while maintaining that his ownership of Firefly poses no national security threats. “Noosphere Ventures announced today that it intends to retain an investment banking firm to assist in the sale of Noosphere Ventures’ ownership interest in Firefly Aerospace,” Polyakov’s company said in a statement. 

While educated as an obstetrician-gynecologist, Polyakov made his fortune through business software ventures and internet gaming, dating and marketing sites. He rescued Firefly from bankruptcy in 2017 and poured money into the company to revitalize it. In September, Firefly conducted its first rocket launch from Vandenberg Space Force Base in Southern California. The rocket didn’t reach orbit but performed well for an initial launch, and the company has been racing to fire up a second one.

The U.S. government halted Firefly’s current rocket launch operations at Vandenberg as the ownership issue with Polyakov plays out, according to two people familiar with the situation. The clashes between Polyakov and the U.S. haven’t been previously reported.

Polyakov was close to the Trump Administration. In 2019, he was involved in an effort to find an American buyer for Motor Sich, a Ukrainian company that is one of the world’s leading manufacturers of aircraft engines. The effort, which also involved Blackwater private military company founder Erik Prince, was to counter moves by China to take over the company and gain control of the technology.

Polyakov’s mention of feeling betrayed and judged “over the last 15 months” is likely a reference to the change of administration from Donald Trump to Joe Biden.

A group of investors in Polyakov’s U.S. launch company — originally known as Firefly Space Systems — sued him and Markusic alleging fraud in the way they brought the company out of its financial difficulties. That lawsuit is now pending in San Mateo County, Calif.

Firefly Aerospace filed an action in Delaware seeking to a summary judgment to have the lawsuit dismissed. Last year the court ruled against Firefly Aerospace, which appealed the decision to the Delaware Supreme Court. The lawsuit in San Mateo County is on hold until that matter is settled.

Polyakov, who has a British passport, is also the main investor in Skyrora, a company based in Scotland that is developing the Skyrora XL launch vehicle.