ASTS Stock Dives 11% As SpaceX Reportedly Eyes EchoStar’s Boost Mobile

• Boost Mobile’s network is currently leased from AT&T and T-Mobile, and the proposed service might need their consent, the report noted.
• AST SpaceMobile is building a network of satellites designed to work hand-in-hand with existing wireless carriers. 
• SpaceX, meanwhile, is seeking to establish itself as a standalone wireless competitor and recently acquired low-band spectrum that will help integrate its Starlink satellites into what CEO Elon Musk has described as a “major mobile carrier.”

Shares of AST SpaceMobile (ASTS) dived 11% on Monday on competition concerns following reports that SpaceX is in talks with EchoStar about buying Boost Mobile to gain access to its network.

According to a report from The Washington Post, SpaceX discussed a deal with EchoStar about buying Boost Mobile or gaining access to its network to launch its own wireless service. Boost Mobile’s network is currently leased from AT&T and T-Mobile, and the proposed service might need their consent, the report noted.

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A possible deal would strengthen SpaceX’s direct-to-device ambitions and raise pressure on AST SpaceMobile's model. ECHO stock was trading 2% higher at the time of writing.     

ASTS Model Under Pressure

AST SpaceMobile is building a network of satellites designed to work hand-in-hand with existing wireless carriers. Rather than competing head-on as a standalone phone service, the company partners with operators such as AT&T (T) and Verizon (VZ).

SpaceX, meanwhile, is seeking to establish itself as a standalone wireless competitor and recently acquired low-band spectrum that will help integrate its Starlink satellites into what CEO Elon Musk has described as a “major mobile carrier.”

Last month, Bloomberg also reported that SpaceX is pursuing agreements for a minimum of 80,000 cell sites across the United States as it advances plans to build a fourth nationwide wireless carrier. The report said that SpaceX is in discussions with at least one major cellular infrastructure company and that Crown Castle Inc. (CCI), among the largest U.S. owners of cellular towers alongside American Tower (AMT) and Vertical Bridge, was also approached for the purpose.

How Did ASTS, ECHO Retail Traders React?

On Stocktwits, retail sentiment around ASTS and SPCX stock stayed within the 'bearish' territory over the past 24 hours, while message volume stayed at 'low' levels.

Meanwhile, sentiment around ECHO stock jumped from 'bearish' to 'bullish' territory.

A Stocktwits user opined that ASTS is currently extremely undervalued.

Another user pinned the selloff on market sentiment over the company, noting that the company has had several catalysts recently that couldn't drive the stock.

ASTS stock has dropped about 50% year-to-date. 

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