The stock of AST SpaceMobile (ASTS 4.60%) popped again on Wednesday, after the satellite communications company announced on Tuesday that it has updated its filings with the International Telecommunication Union (ITU) for its V-band application with the Federal Communications Commission (FCC).
Through 11:30 a.m. ET today, AST SpaceMobile stock was up 11.3%.
NASDAQ: ASTS
Key Data Points
What AST SpaceMobile is doing
AST says it has "agreements and understandings" with more than 40 mobile network operators around the world, but the company develops and manufactures its communications satellites primarily in the U.S.
Management says it wants a "closer strategic alignment of our network buildout and future network operations with the United States." This appears to be the main import of yesterday's news: that the company is choosing the U.S. as its legal jurisdiction setting the rules for how it launches and operates its satellites all around the planet, preferring the regulatory framework set by the Federal Communications Commission over any other country's laws.
It's a rather arcane and technical decision, but investors seem to think it's a good enough excuse to bid up AST's share price today.
IS AST SpaceMobile stock a buy?
The question is whether this announcement by AST is big enough news to justify adding $40 million or so to the company's market capitalization. And I think the answer to that question is "no."
The legal certainty provided by AST's decision has some value in an investment, but I don't believe it justifies a 10% or greater increase in the company's market capitalization. As an investor, I would much rather see more detail on how the company will raise the more than $1.8 billion it needs to build out its constellation of satellites. It has only about $133 million in the bank right now.
Let's not put the cart before the horse, folks. AST's funding requirements remain the big issue here, and until they're resolved, the stock remains speculative in the extreme.
