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AST SpaceMobile shares plunge after SpaceX slump and convertible notes
The selloff comes as AST SpaceMobile faces heavy funding needs, with about $3 billion in spending expected this year and next and free cash flow not projected until at least 2028.
Space stocks took another hit this week, with AST SpaceMobile dropping more than 18% after the market close on Wednesday, July 15, according to MarketBeat Ratings.
The decline was tied to broader weakness in the space sector following SpaceX, which is now trading below its IPO price, and losses of about 18% to 26% over the prior five days for peers including Rocket Lab and Intuitive Machines.
MarketBeat Ratings also pointed to AST SpaceMobile’s $1 billion convertible senior notes offering due in 2034 as weighing on sentiment, amid concerns about the company’s capital intensive business model and potential balance sheet pressure.
The outlet added that AST SpaceMobile is forecast to spend roughly $3 billion this year and next, with positive free cash flow not expected until at least 2028, and it cited a steep deterioration in Q1 performance including diluted EPS of negative 66 cents, versus a negative 23-cent consensus, plus a 292% plus year over year net income contraction despite revenue growth of more than 1,952%.