In a column this morning, I argued AST SpaceMobile (ASTS 10.79%), the former space special purpose acquisition company (SPAC) that now aims to build a constellation of 168 communications satellites costing at least $3 billion, should sell a lot of stock quickly, to raise the cash it needs.
A couple of hours later came AST's response: "No thanks. We're good."
I paraphrase, but that's what AST's announcement boils down to. With $440 million in pro forma cash available, AST says it's got all the money it needs to advance its business this year. Investors, cheered by the news, bid up AST stock 4.9% through 10:25 a.m. ET.
NASDAQ: ASTS
Key Data Points
AST gets a cash infusion
Yahoo! Finance data put AST's cash reserves at $285 million (against $212 million in debt). But as management explained in this morning's interim business update, it has already received $71 million from a warrant redemption announced one week ago, and expects to receive a further $84 million through the end of the redemption period on Sept. 27.
In total, that's $155 million in new cash, raising AST's bank account to $440 million. Additionally, management says it can take out as much as $51.5 million more in debt under its senior secured credit facility.
What this means for AST SpaceMobile
AST says these funds will cover its "near-term operational initiatives," and also cover interest obligations on the company's debt -- and even permit it to pay off some of its convertible debt, limiting future stock dilution.
The upshot: "We continue to have no plans to raise capital in an underwritten public equity offering through at least the end of 2024."
This makes some sense. In its March 2024 10-K filing with the Securities and Exchange Commission (SEC), AST said $350 million to $400 million should suffice to build and launch the next 20 Block 1 BlueBird satellites in its lineup, so $440 million should cover that cost.
True, the company will need still more money soon afterward. But it seems AST has decided to cross that bridge when it comes to it.
