AST SpaceMobile (ASTS) shares plunged nearly 13% in after-hours trading after the company disclosed plans to raise significant new capital through convertible senior notes.
The satellite communications company priced $1 billion of 1.625% convertible senior notes due 2034 in a private 144A offering set to settle around July 20.
The initial conversion price was set at $79.57 per share, representing a 20% premium to Wednesday’s closing price, giving existing shareholders some cushion against immediate dilution.
Paired capped call transactions lift the effective conversion price to $149.20 per share, which represents a 125% premium to the stock’s recent close.
Net proceeds from the offering are estimated at approximately $983.6 million, funds the company intends to direct toward growth initiatives and additional orbital access.
This marks the second billion-dollar convertible debt offering from AST SpaceMobile this year, following a similar raise in February that also triggered a significant stock selloff.
ASTS stock tumbled to $57.63 following the disclosure, extending the stock’s losses to roughly 27% over the past month and nearly 60% since late May, when shares traded above $130.
Satellite-communications analyst Tim Farrar flagged on X that language in the company’s 8-K filing pointing to “partnerships and/or acquisitions” reads like preparation to buy or invest in a launch provider.
Investors are watching closely whether AST SpaceMobile could be positioning itself to secure dedicated launch capacity as competition from SpaceX’s Starlink intensifies across the satellite internet market.
SpaceX’s Starlink holds significant advantages in the rocket segment of the business, along with a vast array of already-deployed satellites orbiting the Earth.
AST SpaceMobile aims to have between 45 and 60 satellites in orbit by the end of 2026 to enable continuous coverage in key markets including the United States, Europe, and Japan.
Separately, Piper Sandler initiated coverage of AST SpaceMobile with an Overweight rating and a $100 price target, implying potential upside of roughly 51% from the stock’s recent closing price.
Despite the bullish analyst sentiment, repeated capital raises continue to reset dilution concerns among shareholders who have already absorbed steep losses from the stock’s prolonged decline.
