Stock Market Today, July 16: AST SpaceMobile Falls on $1B Convertible Notes Offering

Today’s Change

(-17.04%) $-11.30

Current Price

$55.01

Key Data Points

Market Cap

$20BMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.

Day’s Range

$53.33 – $61.50

52wk Range

$36.08 – $133.86

Volume

52.5M

Avg Vol

22.3M

Gross Margin

-22429.27%

AST SpaceMobile (ASTS 17.04%), a space-based cellular broadband provider, closed at $55.01, down 17.04%. The stock fell after a $1 billion convertible notes offering, as investors are watching the progress of satellite deployment and future competition.
Trading volume reached 52.2 million shares, coming in about 13% above its three-month average of 22.7 million shares. AST SpaceMobile IPO’d in 2019 and has grown 463% since going public.

How the markets moved today

S&P 500 (^GSPC 0.51%) fell 0.51% to 7,534, and the Nasdaq Composite (^IXIC 1.47%) dropped 1.47% to 25,882. Among satellite telecommunications and direct-to-device connectivity peers, Globalstar (GSAT 1.24%) fell 1.24% to $79.53, while Iridium Communications (IRDM 4.23%) declined 4.23% to $46.61.

What this means for investors

AST SpaceMobile continues to expand its fleet to build a space-based cellular broadband network. It takes capital to build and launch those satellites, and the company just announced a $1 billion convertible debt offering to help fund its growth.

One big reason shares slumped today is that they will be diluted if those notes are converted into common shares. But the stock drop may also be a buying opportunity for investors who want to own shares of what could be the first satellite provider of a direct-to-cellphone broadband network.

Proceeds from the debt sale will be used to continue building and launching AST’s growing satellite array. The next launch of its Bluebird satellites is planned for next month aboard a SpaceX (Space Exploration Technologies) Falcon 9 rocket.

There lies the rub. Competition from SpaceX is coming, and that company controls the satellite-carrying rockets. Investors should expect volatility in AST stock, but those who see room for more than one player might want to buy shares on the dip.