Shares tumble after $1 billion convertible bond sale
AST SpaceMobile's ASTS.O shares tumble 10.5% before the bell on Thursday to $59.32, their lowest since early December, after clinching a capital raise.
Midland, Texas-based ASTS late Wednesday announced pricing a private offering of $1 billion of 1.625% convertible bonds due Feb. 1, 2024.
The initial conversion price of $79.57 represents a 20% premium to the stock's last sale on Wednesday.
The company intends to use net proceeds for growth and to secure additional access for its space-based cellular broadband network, including partnerships and/or acquisitions.
It also intends to use $96.9 million of proceeds to pay the cost of capped call transactions to offset potential dilution; the initial cap price of $149.20 is 125% above the stock's last close.
ASTS, whose backers include Alphabet GOOGL.O, AT&T T.N and Vodafone VOD.L, has about a $25.7 billion market cap.
Through Wednesday, ASTS shares were down about 9% year to date and off 50% from the intraday record high of $133.86 hit on May 28.
Five of 12 analysts rate the stock "buy," five rate "hold" and two recommend "sell"; the median price target is $83.56, per LSEG data.
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