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Investing.com -- AST SpaceMobile Inc. (NASDAQ:ASTS) stock fell 7.3% in after-hours trading Tuesday following the company’s announcement of a planned $850 million convertible senior notes offering.
The space-based cellular broadband network developer said it intends to offer $850 million in convertible senior notes due 2036 to qualified institutional buyers, with an option for initial purchasers to buy up to an additional $150 million in notes. The notes will be senior, unsecured obligations with interest payable semiannually, convertible into cash, shares of AST SpaceMobile’s Class A common stock, or a combination at the company’s discretion.
AST SpaceMobile plans to use the proceeds from the notes offering for general corporate purposes, including funding the deployment of its worldwide satellite constellation for its SpaceMobile Service.
In a separate announcement, the company revealed plans for a registered direct offering of its Class A common stock. Proceeds from this stock offering, combined with cash on hand, will be used to repurchase up to $50 million of its existing 4.25% convertible senior notes due 2032.
The company noted that the notes offering is not contingent on the completion of the registered direct offering or the existing convertible notes repurchases. Similarly, the registered direct offering and existing notes repurchases are not dependent on the completion of the new notes offering, though the stock offering and notes repurchases are cross-conditional.
AST SpaceMobile is building what it describes as the first and only space-based cellular broadband network accessible directly by standard smartphones, designed for both commercial and government applications.
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