ASTS 5% Jump: The Dirty Secret Behind Wall Street’s Split on SpaceMobile

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(SeaPRwire) –   By: Lucas Caldwell

AST SpaceMobile’s 5% Friday pop isn’t a meaningful turnaround. It’s just a temporary band-aid for a company split between execution failures and overhyped promise. Most casual traders only see the B. Riley upgrade. They miss the full picture of risks that still sit right below the surface. I’ve talked to three space sector analysts this week over casual industry drinks. None of them see this quick pop as a long-term bull signal for the company. Many are still holding their breath for deeper corrections in the unprofitable space tech sector.

ASTS closed at $57.80 on Friday, after hitting an intraday high of $61.67 during trading. Total volume hit 30.2 million shares, 62% above the stock’s daily average. The immediate, widely cited catalyst was B. Riley’s upgrade from Neutral to Buy. The firm attached an $85 price target to the new Buy rating. The upgrade came right after the stock fell 44% across the prior six months. AST just priced $1 billion in 1.625% convertible senior notes due 2034. The deal also includes an option for an additional $150 million tranche if demand holds.

The company executed capped call transactions that lifted the effective conversion price from $79.57 to $149.20. B. Riley’s model projects AST will hold more than $3.4 billion in deployable cash by the end of Q3. AST exited the second quarter with more than $2.7 billion in cash on hand. B. Riley analyst Mike Crawford says the company is fully funded to deploy its global direct-to-device satellite constellation. BlueBird 10’s 2,400 square foot array deployed successfully late last week. BlueBirds 11, 12, and 13 are slated for an early August launch on SpaceX’s Falcon 9. The company already has production and assembly running through BlueBird 37.

The picture gets far messier when you look past the positive headlines marketed to traders. The convertible note offering first sparked broad dilution concerns among investors earlier in the week. AST also openly disclosed a delay to its commercial satellite service timeline. Broader weakness across the entire space stock sector, tied to recent SpaceX headlines, dragged sentiment down earlier that same week. Last quarter’s earnings miss hit the stock hard, and the damage hasn’t been fully reversed. AST reported a loss of $0.66 per share, against a consensus expected loss of $0.23. Revenue came in at just $14.73 million, against analyst forecasts of $39.01 million.

Wall Street analyst ratings are split straight down the middle on the stock right now. Piper Sandler also upgraded ASTS to Strong Buy recently, but Deutsche Bank moved in the opposite direction. Deutsche Bank cut its rating to Hold and lowered its price target from $117 to $106. UBS holds a Neutral rating with an $80 target, while Barclays has an Underweight rating with a $65 target. Insiders have been selling steadily across the past three months. Total insider sales hit 105,809 units, valued at approximately $9.7 million. The company’s CTO sold 40,000 units in early June at $96.37, cutting his position by 53.5%.

Only 1 in 3 pre-revenue direct-to-device satellite companies will turn a profit this decade, and ASTS is far from a sure bet.

Author bio: Lucas Caldwell, a tech opinion leader covering space tech and public equities with millions of followers on X/Twitter.