AST SpaceMobile (NASDAQ: ASTS) shares fell almost 25% on Friday. This decline came in the wake of the company’s announcement of a $100 million offering of its stock.
The offering will see AST selling 32.26 million shares at $3.10 each. In addition, the deal’s underwriters have been granted an option to purchase an extra 4.838 million shares.
The company expects to generate gross proceeds ranging from $100 million to $115 million from this deal. The funds raised will be directed toward general corporate purposes. It’s important to note that stock offerings can dilute the value of each share due to the increase in the total number of shares sold.
In a separate development, AST SpaceMobile (NASDAQ: ASTS) announced that it would be receiving investments from AT&T (NYSE: T), Alphabet (NASDAQ: GOOG, NASDAQ: GOOGL), and European telecom giant Vodafone (NASDAQ: VOD). The total investment from these three companies amounts to $155 million. While Vodafone has previously invested in AST, this marks the first time that Alphabet and Google are funding the company.
In a statement, AST said,
“This significant investment in AST SpaceMobile underscores confidence in the company’s technology and leadership position in the emerging space-based cellular direct-to-device market, with the potential to offer connectivity to today’s 5.5 billion cellular devices when they are out of coverage”
By the close of trading on Friday, ASTS stock was down 25.72%, with 44.33 million shares traded. This trading volume exceeds the company’s daily average of 2.32 million shares.
Kevin Putnam is a financial journalist and editor based in New York. He specializes in editing news and analysis related to U.S. stock market.
