AST SpaceMobile plots $86 million share sale

by

TAMPA, Fla. — AST SpaceMobile said Nov. 30 it could raise more than $86 million from selling a chunk of shares as the company looks to accelerate its direct-to-smartphone constellation plans.

The satellite operator agreed to sell shares in a public offering for $5.50 each, less than half what they were worth the day it became a public company in April 2021.

Investment bank B. Riley Securities is underwriting the sale of shares that would equate to about $75 million in gross proceeds for AST SpaceMobile. The underwriter has a 30-day option to buy additional shares that would bring this amount to $86.25 million.

AST SpaceMobile initially aimed to raise up to $74.8 million when it first announced plans for a share sale Nov. 29, but upsized the target following investor demand. 

The companies expect to close the transaction Dec. 2.

AST SpaceMobile became a public company April 7 by merging with New Providence Acquisition Corp, a special purpose acquisition company (SPAC) that was already trading on the Nasdaq.

The company raised around $417 million from the merger to boost a constellation aiming to bring 5G connectivity directly to unmodified smartphones, however, the stock has fluctuated since opening at $11.63 April 7. 

The shares were sent on a downward trend following news in August that supply chain issues have delayed the launch of AST SpaceMobile’s first operational satellite by about six months to late 2023.

AST SpaceMobile said Nov. 14 it was exploring funding options to speed up deployments for future satellites in its constellation.

A delay in launching its BlueWalker-3 prototype, which successfully deployed its phased array antenna earlier this month, has also put the company at risk of losing frequencies that have been provisionally assigned to the constellation.

BlueWalker-3 missed a Nov. 22 deadline to reach 700 kilometers above the Earth to lock in rights to this spectrum following its launch in September.

AST SpaceMobile is asking international regulators for an 18-month extension to give the prototype time to climb to position and a decision on this is due in March.

The company has said more funds could help accelerate the development of technology and its manufacturing capabilities. 

More financial firepower could also help any plan to regain priority access to spectrum if this extension request fails.

AST SpaceMobile had nearly $200 million in cash reserves as of September and has said it already has enough financial resources to cover operations over the next 12 months.

Dec. 2 update: AST SpaceMobile said Dec. 2 it had successfully closed the $75 million portion of this share sale.