ASTS Stock Is Falling Nearly 11% Today – Why Is Retail Not Happy With Its New $1B Fund Raising?

• The notes will be senior, unsecured obligations of AST SpaceMobile and will accrue interest payable semiannually in arrears.
• ASTS on Tuesday announced successful unfolding of its next-generation BlueBird 6 satellite.

AST SpaceMobile (ASTS) stock fell nearly 11% in extended hours of trading on Wednesday after it announced its intent to offer $1 billion aggregate principal amount of convertible senior notes due 2036. 

AST SpaceMobile also plans to provide the initial purchasers of the notes with an option to acquire up to $150 million more in total principal value of notes. This option can be exercised and settled any time between the notes’ initial issuance date and February 20, 2026.

Why Raising?

AST SpaceMobile intends to use the net proceeds from the notes offering for general corporate purposes, including without limitation, accelerating the deployment of its controlled spectrum bands on a global basis. 

The company also seeks to monetize the capabilities of the company's proprietary technology to capture the evolving commercial opportunities related to artificial intelligence, enhancing investment in government space opportunities in the U.S., reducing higher interest debt, and pursuing opportunistic investments to accelerate SpaceMobile’s service and capabilities. 

The notes will be senior, unsecured obligations of AST SpaceMobile and will accrue interest payable semiannually in arrears, the statement said. 

The notes will mature on April 15, 2036, unless earlier converted or repurchased and will be convertible into cash, shares of AST SpaceMobile’s Class A common stock, or a combination thereof, at AST SpaceMobile’s election.

BlueBird 6 Unfolding

ASTS on Tuesday announced successful unfolding of its next-generation BlueBird 6 satellite.

BlueBird 6 is the largest ever commercial communications array deployed in low Earth orbit, designed to support cellular broadband peak data speeds of up to 120 Mbps, according to AST. 

AST SpaceMobile has agreements with over 50 mobile network operators globally with nearly 3 billion subscribers combined and strategic partnerships with AT&T, Verizon, Vodafone, Rakuten, Google, American Tower, among others.

How Did Stocktwits Users React?

Retail sentiment around ASTS trended in ‘neutral’ territory amid ‘normal’ message volume. 

One bullish user called the fall in stock price as ‘overdone’.

Another user called the offering announcement as ‘disappointing’ and said that ‘doing an offering itself is completely understandable but doing it after you have told your investors that you don't need more money is misleading.”

Shares in the company have risen 182% over the past year. 

Read More: Why Is Retail Seeing 100% Jump In Fastly’s Stock By Month-End?

For updates and corrections, email newsroom[at]stocktwits[dot]com.
 

Share

·

Add us on