Shares of AST SpaceMobile (NASDAQ: ASTS) dropped sharply Thursday after the satellite communications company priced a fresh $1 billion convertible senior notes offering.
The stock fell 13% to $57.63 in early trading, extending an overnight slide that began when details of the deal emerged late Wednesday.
AST SpaceMobile priced $1 billion of 1.625% convertible senior notes due 2034 in a private 144A offering, with the transaction 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, with capped call transactions lifting the effective conversion price to $149.20, a 125% premium.
Net proceeds from the offering are estimated at approximately $983.6 million, giving the company a substantial cash infusion despite the dilution concerns weighing on the stock.
This marks the second billion-dollar convertible debt offering AST SpaceMobile has executed this year, mirroring a similar raise in February that also triggered a meaningful selloff in the shares.
Satellite-communications analyst Tim Farrar flagged that acquisition language in the company’s 8-K filing suggests AST SpaceMobile may be targeting a launch provider, potentially copying Rocket Lab’s vertical-integration strategy.
The company has also delayed its launch schedule for BlueBird satellites to early 2027, adding to investor anxiety about its timeline for achieving commercial service at scale.
Despite the selling pressure, Piper Sandler initiated coverage of ASTS at Overweight with a $100 price target, while Wall Street’s consensus sits at $81, well above current trading levels.
The decline in AST SpaceMobile contributed to a broader session of losses across markets, with technology and semiconductor stocks leading the retreat on Thursday.
The S&P 500 fell 0.51% to close at 7,533.77, while the Nasdaq Composite declined 1.47% to finish at 25,881.95, and the Dow Jones Industrial Average shed 105.67 points, or 0.20%, to close at 52,552.97.
Chip stocks were hit particularly hard after Taiwan Semiconductor raised its capital expenditure forecast to between $60 billion and $64 billion, up from prior guidance of $52 billion to $56 billion.
The VanEck Semiconductor ETF (SMH) slid nearly 4%, with Arm Holdings dropping more than 5%, while Micron Technology and AMD each tumbled more than 5%.
SanDisk (SNDK) slipped over 12%, Broadcom shed about 5%, and US-listed shares of SK Hynix plunged more than 13% on the day.
Shares of Alphabet dropped more than 4% after Bloomberg News reported the company is delaying the release of its flagship artificial intelligence model, Gemini 3.5 Pro, which is described as months behind schedule.
On the brighter side, UnitedHealth Group (NYSE: UNH) gained 5.6% after reporting strong second-quarter 2026 earnings, providing a rare bright spot amid the broad market weakness.
Separately, Freddie Mac reported that the 30-year fixed mortgage rate climbed to 6.55% this week, its highest level in nearly a year, adding another layer of concern for interest-rate-sensitive sectors.
