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MIDLAND, Texas - AST SpaceMobile, Inc. (NASDAQ:ASTS), currently valued at $28.3 billion and showing strong revenue growth of 249% over the last twelve months, has priced a $1 billion offering of convertible senior notes due 2036, according to a company press release. The offering, initially announced at $850 million, was upsized by $150 million. According to InvestingPro analysis, the company maintains a healthy financial position with more cash than debt on its balance sheet.
The notes will carry a 2.00% annual interest rate, payable semiannually beginning July 15, 2026. They have an initial conversion price of approximately $96.30 per share of AST SpaceMobile’s Class A common stock, representing a 22.5% premium over the October 21 closing price of $78.61. The stock has demonstrated significant momentum, with InvestingPro data showing a remarkable 292% price return over the past six months.
The company granted initial purchasers an option to buy up to an additional $150 million in notes within 13 days of issuance. The transaction is expected to settle on October 24.
AST SpaceMobile anticipates net proceeds of approximately $981.9 million, or $1.13 billion if the additional purchase option is fully exercised. The company plans to use proceeds for general corporate purposes, including funding the deployment of its satellite constellation.
In a separate transaction, AST SpaceMobile has priced a registered direct offering of approximately 2 million shares of Class A common stock at $78.61 per share, with settlement scheduled for October 29. The company intends to use these proceeds, along with cash on hand, to repurchase $50 million of its existing 4.25% convertible senior notes due 2032.
The notes are being offered only to qualified institutional buyers under Rule 144A of the Securities Act. Neither the notes nor the potentially issuable shares upon conversion have been registered under the Securities Act.
AST SpaceMobile is developing what it describes as the first space-based cellular broadband network designed to work directly with standard mobile devices.
The information in this article is based on a company press release statement.
In other recent news, AST SpaceMobile announced plans to offer $850 million in convertible senior notes due 2036 to qualified institutional buyers, with an option for initial purchasers to acquire an additional $150 million in notes. These notes will be senior, unsecured obligations with interest payable semiannually and convertible into cash or shares of AST SpaceMobile’s Class A common stock at the company’s discretion. Additionally, AST SpaceMobile plans to repurchase up to $50 million of its 4.25% convertible senior notes due 2032, funding the repurchase through a combination of a registered direct offering of Class A common stock and cash on hand. In a separate development, Barclays downgraded AST SpaceMobile from Overweight to Underweight, citing valuation concerns, with a price target of $60. Despite the downgrade, the company has confirmed launches of its next-generation Blue Bird 2 satellites starting in 2025, with plans to deploy 45-60 satellites by the end of 2026. The company also finalized a deal with Verizon for direct-to-device services in the US and reported successful testing with Bell Canada. These recent developments highlight AST SpaceMobile’s strategic financial maneuvers and ongoing partnerships in the satellite communications industry.
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