AST SpaceMobile Stock Is Getting Hammered Friday: What's Going On?

Shares of AST SpaceMobile Inc ASTS are trading lower Friday morning after the company announced a new, large-scale debt offering and a stock-for-debt swap. Here’s what investors need to know.

What To Know: The satellite-to-phone company announced the pricing of $500 million in 2.375% convertible senior notes due 2032. These notes, offered privately to institutional buyers, feature an initial conversion price of approximately $72.07 per share, a 20% premium over Thursday’s closing price.

Net proceeds of roughly $486.9 million are intended for general corporate purposes and to fund capped call transactions designed to reduce potential future dilution.

Simultaneously, AST SpaceMobile revealed a deal to repurchase $135 million of its existing convertible notes. However, the repurchase will be funded by issuing approximately 5.8 million new shares of its Class A common stock directly to the noteholders participating in the transaction.

While the moves will remove $135 million in debt and save about $37.8 million in future interest payments, the market is reacting to the dilutive impact.

The issuance of 5.8 million new shares to settle the repurchase, combined with the potential for future dilution from the new $500 million note offering, is creating significant downward pressure on shares Friday morning.

Price Action: According to data from Benzinga Pro, ASTS shares are trading lower by 7.8% to $55.36 Friday morning. The stock has a 52-week high of $60.95 and a 52-week low of $16.89.

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How To Buy ASTS Stock

Besides going to a brokerage platform to purchase a share – or fractional share – of stock, you can also gain access to shares either by buying an exchange traded fund (ETF) that holds the stock itself, or by allocating yourself to a strategy in your 401(k) that would seek to acquire shares in a mutual fund or other instrument.

For example, in AST SpaceMobile’s case, it is in the Communication Services sector. An ETF will likely hold shares in many liquid and large companies that help track that sector, allowing an investor to gain exposure to the trends within that segment.

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