ASTS Stock Rises Premarket Ahead Of $1B Note Settlement: Analyst Warns Rocket-Firm Buy May Be ‘Likely Foolish’

• Analyst Tim Farrar called a potential launch-company purchase “likely foolish” but said AST needs to change its story.
• The notes carry a 1.625% rate and could generate up to about $1.13 billion in net proceeds.
• BlueBirds 11, 12 and 13 are at Cape Canaveral as production continues through BlueBird 38.

Shares of AST SpaceMobile (ASTS) rose 2% in premarket trading on Monday as the company’s $1 billion convertible note offering was set to settle, while an analyst weighed in on whether the satellite communications company is preparing to acquire a launch provider rather than simply purchase additional rocket launches.

ASTS stock rose 5% on Friday but still ended the week down 21%, marking its steepest weekly decline in more than two years. 

Analyst Calls Launch Acquisition ‘Likely Foolish’

Satellite communications analyst Tim Farrar said on X that the company’s financing plan points toward a launch-provider acquisition rather than an effort to secure more SpaceX Falcon 9 missions after Blue Origin’s New Glenn delays. Responding to an investor analysis suggesting that half of the convertible proceeds could be needed to replace delayed New Glenn launches with Falcon 9 missions, Farrar said: “It is correct that the original plan was only 3 F9s plus 9 NGs including BB7”

He also said: “Of course, the plan is not just to buy more F9s, which probably isn’t feasible anyway. AST intends to buy a launch company: likely foolish but they need to change the story.” The comments come after Farrar said last week that AST SpaceMobile’s offering documents made it “pretty clear” the company intended to buy or invest in a launch provider to vertically integrate its operations.

Why ASTS’ $1B Raise Sparked Speculation

The debate intensified after AST SpaceMobile priced $1 billion of 1.625% convertible senior notes due 2034, with the transaction scheduled to settle Monday. After funding capped call transactions, the company said the remaining proceeds would be used to pursue an “expanding universe of growth initiatives” and secure additional access to orbit through partnerships and/or acquisitions that would vertically integrate the business and reduce reliance on third-party launch providers. The company expects net proceeds of about $983.6 million, or roughly $1.13 billion if the underwriters fully exercise their option to purchase an additional $150 million of notes.

ASTS Ramps Up Satellite Production 

The financing comes as AST SpaceMobile continues expanding its BlueBird satellite constellation. The company recently confirmed on X that BlueBirds 12 and 13 have arrived at Cape Canaveral, joining BlueBird 11 ahead of their next launch. Production is continuing through BlueBird 38, while AST has said its next-generation satellites are expected to deliver nearly twice the peak speeds of its first-generation spacecraft.

Separately, the Midland Development Corporation’s board is also scheduled to consider an economic development agreement on Monday that would support AST SpaceMobile’s satellite manufacturing expansion at the Midland Spaceport Business Park.

How Do Retail Traders Feel About ASTS?

On Stocktwits, retail sentiment for ASTS was ‘bullish’ amid a 52% jump in 24-hour message volumes.

One user said, “$ASTS maybe the $1b raise was to double production capacity because Scott and Abel are convinced of an incoming unprecedented major demand for specialized satellites critical for national defense. Something dual use but hardened and optimized for defense world-wide.”

Another user said, “$ASTS such a steal right now. Put in an order for 175 more shares at open. Will bring my total to 3,325 shares. Hoping to retire off of this stock/dividends. Just have to believe in Abel and team.”

ASTS stock rose 1% over the past year, but has declined 20% since January. 

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