AST SpaceMobile Announces $1 Billion Convertible Notes Offering
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 days ago
0mins
Should l Buy ASTS?
Source: Benzinga
- Convertible Notes Details: AST SpaceMobile announced a $1 billion offering of 2.250% convertible senior notes due 2036, expected to settle on February 17, 2023, with an initial conversion price of approximately $116.30 per share, representing a 20% premium over the February 11 closing price, which will provide the company with approximately $983.7 million in net proceeds.
- Use of Proceeds: The company plans to utilize the proceeds for accelerating global spectrum deployment, investing in U.S. government space opportunities, reducing higher-interest debt, and pursuing opportunistic investments to advance its SpaceMobile service, indicating a proactive approach to future growth.
- Stock Performance Analysis: AST SpaceMobile shares are currently trading at $82.33, which is 19.7% below the 20-day simple moving average of $107.15, and despite a 211.48% increase over the past 12 months, the stock is closer to its 52-week lows, reflecting market concerns about its future performance.
- Market Momentum Signals: While the Benzinga Edge score indicates strong momentum for AST SpaceMobile (score: 98.26), the RSI at 48.53 suggests a lack of strong momentum, and the MACD being below its signal line indicates bearish pressure on the stock, prompting investors to remain cautious.
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Analyst Views on ASTS
Wall Street analysts forecast ASTS stock price to fall
9 Analyst Rating
4 Buy
3 Hold
2 Sell
Hold
Current: 82.220
Low
43.00
Averages
74.26
High
100.00
Current: 82.220
Low
43.00
Averages
74.26
High
100.00
About ASTS
AST SpaceMobile, Inc. is engaged in building a global cellular broadband network in space to operate directly with standard, unmodified mobile devices based on its intellectual property (IP) and patent portfolio and designed for both commercial and government applications. The Company is engaged in designing and developing the constellation of BlueBird (BB) satellites and has planned space-based Cellular Broadband network distributed through a constellation of low Earth orbit (LEO) satellites. Its SpaceMobile Service is being designed to provide high-speed cellular broadband services to end-users who are out of terrestrial cellular coverage using existing mobile devices. The Company intends to continue testing capabilities of the BW3 test satellite, including further testing with cellular service providers and the government. The Company has operations in India, Scotland, Spain, and Israel.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Shareholder Dilution Risk: The financing will result in the issuance of approximately 1.15 million additional shares, and while it will reduce $300 million in debt and save over $50 million in interest payments, existing shareholders face the risk of direct dilution, potentially impacting their equity value.
- Capital Expenditure Needs: AST SpaceMobile still requires significant capital to complete its satellite array construction, planning to use part of the additional capital to accelerate the deployment of controlled spectrum bands globally, indicating urgency in expanding service capabilities.
- Market Volatility Warning: The company cautioned that common stock could experience
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