AST SpaceMobile Stock Is Down 50% From Highs, and Just Raised $1 Billion to Shore Up Its Satellite Internet Plans. Here's Why I Am Still Not Buying Shares.
The company is developing a direct-to-device satellite internet business, but will face major hurdles if it is to be successful.
Overview
The initial public offering (IPO) of Space Exploration Technologies (NASDAQ: SPCX) may have marked a near-term peak in space-economy stocks. Many companies in the sector have fallen precipitously over the last month, including huge 2025 winner AST SpaceMobile (NASDAQ: ASTS).
Now, the direct-to-device satellite internet business aiming to revolutionize connectivity is raising $1 billion through a convertible bond offering, sending shares down nearly 60% from highs. However, at a share price of around $55 today, I still would not add AST SpaceMobile to my portfolio. Here's why.
Details
AST SpaceMobile has the audacious goal of being the first company to fully commercialize high-speed satellite internet beamed directly to smartphones. This means that, unlike with current satellite internet services like Starlink, a person will not need a bulky satellite dish to obtain an internet connection to their devices. Starlink already generates over $10 billion in revenue, so if a company can improve on the service, you could see an explosion in adoption that disrupts the entire wireless internet sector.
Source
Originally published at www.fool.com.