AST SpaceMobile (NASDAQ: ASTS) stock soared during intraday trading Wednesday after announcing a $100 million partnership with Verizon to provide direct-to-cellular service.
AST SpaceMobile (ASTS) has partnered with Verizon Communications (NYSE: VZ) to deliver direct-to-cellular AST SpaceMobile service to Verizon customers as needed. The collaboration involves a significant commitment of $100 million from Verizon, comprising commercial prepayments and convertible notes.
Under the terms of the deal, Verizon has pledged $65 million in commercial prepayments, with an additional $45 million subject to earnout. Additionally, $35 million will be allocated towards convertible notes. This partnership represents a substantial milestone for AST SpaceMobile, as it aims to achieve 100% coverage of the continental United States on premium 850 MHz spectrum in collaboration with two major U.S. mobile operators.
Abel Avellan, Founder, Chairman, and CEO of AST SpaceMobile, hailed the partnership as a “transformational commercial milestone,” highlighting the strategic significance of targeting the lucrative U.S. wireless market.
AST SpaceMobile has already secured agreements with over 45 mobile network operators worldwide, collectively serving more than 2.8 billion existing subscribers. Earlier in May, the company inked a similar deal with AT&T (NYSE: T) to provide a space-based broadband network directly to cell phones.
Meanwhile, AST SpaceMobile reported fiscal first-quarter sales of $0.5 million, falling short of analyst consensus estimates of $5.5 million. However, the company reported an adjusted EPS loss of $(0.16), outperforming the consensus loss of $(0.21).
AST SpaceMobile (NASDAQ: ASTS) Stock Reaction
On Wednesday, ASTS stock climbed 69.23%, closing at $9.02, marking a 91.51% increase for the week. The trading volume was 109,899,280 shares, significantly higher than the average daily volume of 7.58 million.
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