AST SpaceMobile, Inc. (ASTS) is facing a dip in its stock price today after announcing plans to offer up to $400 million worth of Class A common stock. This news comes on the heels of the company securing a September 12 launch date for its BlueBird Satellites from Cape Canaveral, Florida.
The company has entered into an Equity Distribution Agreement with several investment banks, including B. Riley Securities, Barclays Capital, and UBS Securities, for the sale of these shares. Each agent will earn a commission of up to 3.0% of the gross sales price.
AST SpaceMobile intends to utilize the net proceeds from the stock offering for general corporate purposes, likely contributing to its ongoing satellite network development and launch operations.
Notably, the company anticipates raising over $155 million from warrant redemptions, bringing its total cash reserves to over $440 million on a pro forma basis as of June 30, 2024. This significant financial boost will likely support the company’s future growth plans.
Investors can gain exposure to AST SpaceMobile through ETFs such as the Procure Space ETF (UFO) and the Invesco Dorsey Wright Technology Momentum ETF (PTF).
However, the announcement of the stock offering has led to a 13.6% drop in ASTS shares, closing at $28.59 on Thursday. This decline reflects investor concerns surrounding the dilution of existing shares and potential impact on the company’s valuation.
Despite this setback, AST SpaceMobile remains a key player in the burgeoning space technology sector, with its ambitious goal of providing mobile phone service via satellite. The company’s upcoming satellite launch is a crucial step in achieving this objective.
