AST SpaceMobile Inc. (NASDAQ:ASTS) shares are trading lower Thursday following the completion of the company’s capital raise. The stock has been volatile, falling more than 2% in premarket trading before opening in positive territory during the regular session. The broader market is also under pressure, with the Nasdaq down 1.09% and the S&P 500 falling 0.78%.
On Tuesday, the company reported completing a $1.15 billion private offering of convertible senior notes. The transaction brings pro forma cash, cash equivalents, and restricted cash to over $3.8 billion as of June 30.
The offering includes $1 billion of 1.625% convertible senior notes due 2034, plus $150 million from an option exercised in full by initial purchasers, set to settle July 22. AST SpaceMobile also executed capped call transactions, raising the effective conversion price to $149.20 per share to cap dilution under 2%.
“This financing allows us to pursue an expanding universe of growth opportunities, continue vertical integration, and secure additional access to orbit for our space-based cellular network,” said Scott Wisniewski, president of AST SpaceMobile.
CFO Andy Johnson stated: “The notes have our lowest coupon ever at 1.625% and have an effective conversion price of $149.20 per share, well above our all-time high stock price, providing cost-efficient capital with effective dilution of less than 2%.”
Upcoming Q2 Earnings Schedule
AST SpaceMobile plans to report second quarter earnings on August 10. Consensus analyst estimates project an earnings per share of 29 cents on quarterly revenue of $34.54 million. The company missed EPS consensus estimates in five consecutive quarters.
Short interest in AST SpaceMobile increased during the recent reporting period from 62.49 million to 64.72 million, placing 21.73% of publicly available stock short. Given recent average daily trading volume of 25.02 million stock, the days-to-cover ratio stands at 2.59 days.
Recent Wall Street Analyst Actions
- July 17: B. Riley Securities upgraded the stock to Buy and maintained an $85 price forecast.
- July 16: Piper Sandler initiated coverage with an Overweight rating and a $100 price forecast.
- May 29: Deutsche Bank downgraded the stock to Hold and lowered its price forecast to $106.
Technical Analysis
From a trend perspective, ASTS is in a clear downswing relative to its key moving averages: the stock is trading 12.8% below its 20-day SMA and 26.7% below its 50-day SMA, with price also sitting well under the 100-day and 200-day averages.
The 20-day SMA is below the 50-day SMA (a bearish crossover), reinforcing that the intermediate trend is still pointed down even after prior rebounds. At the same time, the 50-day SMA remains above the 200-day SMA.
ASTS Stock Price Activity: AST SpaceMobile shares were down 3.95% at $59.50 at the time of publication on Thursday, according to Benzinga Pro data.
Photo Courtesy: PJ McDonnell on Shutterstock.com
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