Zinger Key Points
- AST SpaceMobile shares dropped 11.8% after Apple announced a satellite texting partnership with SpaceX and T-Mobile.
- The company secured $460 million in convertible notes, boosting its cash reserves to nearly $1 billion.
- Get the Real Story Behind Every Major Earnings Report
AST SpaceMobile, Inc. ASTS shares are trading lower Wednesday potentially following Apple Inc.'s AAPL announcement of a partnership with SpaceX's Starlink and T-Mobile to introduce satellite texting capabilities for iPhone users.
What To Know: Apple integrated Starlink satellite services into its latest iOS 18.3 update, enabling limited beta testing for select T-Mobile customers in the U.S. This move marks a shift from T-Mobile's prior focus on Starlink compatibility with Samsung devices.
The announcement raises concerns for AST SpaceMobile, which aims to provide direct-to-device satellite communication services. Apple’s partnership with Starlink, a major competitor in the satellite sector, may add pressure to AST SpaceMobile's market position.
CEO Abel Avellan stated that the additional capital will accelerate the company's manufacturing and launch plans. The notes carry a 4.25% interest rate with a seven-year maturity and an effective conversion price of $44.98 per share, designed to minimize shareholder dilution. AST SpaceMobile also executed a capped call hedge to mitigate potential dilution and maintain flexibility in handling future conversions.
ASTS Price Action: AST Spacemobile shares were down 11.4% at $17.85 at the time of writing, according to Benzinga Pro.
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