AST SpaceMobile shares slide on plan to sell up to $400 million of stock

By James Rogers

The space-based broadband company's stock fell 14% on Thursday, registering its biggest daily decline since April

Shares of AST SpaceMobile Inc. are down 1.7% in premarket trades Friday after tumbling 14% Thursday following the space-based broadband company's announcement of plans for an at-the-market sale of up to $400 million of common stock.

The stock registered its biggest decline since April 2, when it fell 23.6%, Dow Jones Market Data show.

In an SEC filing, AST SpaceMobile (ASTS) said that it had entered into an equity-distribution agreement to sell up to $400 million of common stock. The "at-the-market offering" has a term of up to three years, and shares could be sold "from time to time" the company said. "We are not obligated to sell any of the Shares under the ATM Sales Agreement and may at any time suspend solicitation and offers thereunder," AST SpaceMobile added. B. Riley Securities, Barclays Capital, BofA Securities, Cantor Fitzgerald, Deutsche Bank Securities, Roth Capital Partners, Scotia Capital and UBS Securities are acting as sales agents.

Related: AST SpaceMobile stock climbs as Sept. 12 targeted for first commercial satellite launch

AST SpaceMobile's selloff comes after shares ended Wednesday's session up 12.5%, lifted by the company's plan to launch its first five commercial satellites on or after Sept. 12 from Cape Canaveral, Fla.

The satellites, called BlueBirds, each feature the largest-ever commercial communications arrays to be deployed in low-Earth orbit, according to AST SpaceMobile.

"After launch, the BlueBird satellites are planned to offer noncontinuous cellular broadband service across the United States and in select markets globally," AST SpaceMobile said in a statement.

The initial service, which is based on premium low-band spectrum, is planned to support beta-test users for AT&T Inc. (T) and Verizon Communications Inc. (VZ), and will target approximately 100% nationwide coverage from space with over 5,600 coverage cells in the U.S., AST SpaceMobile said. In July, the company said that the Federal Communications Commission had granted it an initial license for space-based operations in the U.S.

Related: AST SpaceMobile's stock hits new intraday high ahead of first commercial satellite launch

On Wednesday, AST SpaceMobile also announced that more than $155 million in proceeds is expected from its previously announced redemption of warrants, resulting in more than $440 million in cash on a pro forma basis as of June 30.

In May, AST SpaceMobile shares surged following the announcement of a deal with Verizon.

AST SpaceMobile shares are up 371.8% in 2024, outpacing the S&P 500 index's SPX gain of 15.4%.

-James Rogers

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09-06-24 0655ET

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