Pumpkin spice latte season is upon us, and perhaps no company is looking forward to turning the page on summer more than Midland, Texas-based AST SpaceMobile (NASDAQ: ASTS).
Since the space-based cellular broadband network provider’s stock hit its all-time high on May 28, it has fallen nearly 54%.
As the company continues to build out its constellation of low Earth orbit (LEO) BlueBird satellites, numerous headwinds and tailwinds could work against it and or in its favor. But the SpaceX (NASDAQ: SPCX) competitor will have to overcome some challenges—and embrace certain catalysts—as it aims to work its way back into investors’ good graces.
Concerns Mount Over AST SpaceMobile’s Burn Rate, Dilution, and Heavy Insider Selling
Like any company expanding at the scale of AST SpaceMobile, the speed at which it spends its cash reserves can be alarming.
Those outlays are necessary in order to achieve objectives. But that doesn’t quell critics’ concerns.
Analysts are forecasting a full-year cash burn rate between $1.5 billion and $1.8 billion.
That spending is being driven by R&D, vertically integrated BlueBird satellite production, and costly rocket launch service fees, of which SpaceX charges around $55 million to $65 million per.
To address that last expense, the company is exploring a partnership or potential acquisition of a launch services provider, but that has come with strings attached. In a Form 8-K filing on July 15, AST SpaceMobile noted that its $1 billion private offering of convertible senior notes due 2034 was intended to “further vertically integrate its business and mitigate risks associated with third-party launch providers.”
As ambitious as that is, the $1 billion offering raises the specter of shareholder dilution.
AST SpaceMobile ultimately raised $1.15 billion through the convertible notes, which carry an initial conversion price of $79.57 per share. However, the company also entered into capped call transactions designed to reduce potential dilution, resulting in what AST says is an effective conversion price of $149.20 and effective dilution of less than 2%.
Another headwind comes in the form of heavy insider selling. Over the trailing 12 months, insiders have liquidated more than $450 million worth of ASTS, while only buying $187,240 worth of the stock, all of which came in Q4 2025. In Q1 and Q2, there were zero buys.
The company has also strung together a chain of disappointing earnings. Most recently, AST SpaceMobile’s Q2 report on Aug. 10 resulted in its sixth consecutive earnings per share (EPS) miss, and its seventh revenue miss in eight quarters.
EPS of negative 77 cents missed the consensus estimate of negative 32 cents by a wide margin, while revenue of $31.52 million came in below expectations of $34.53 million.
Concerningly, Q2 adjusted operating expenses—excluding cost of revenues—rose to $95.9 million, capital expenditures reached approximately $610 million. Q3 adjusted operating expenses are expected to increase to a range of $105 million to $115 million.
A Reversal Will Largely Depend on the Success of AST SpaceMobile’s FCC Test and Its Partnerships
The rollout of AST SpaceMobile’s direct-to-device (D2D) network depends in part on regulatory approvals and testing as well as the roughly 60 strategic partnerships it already has in place.
Earlier in August, the U.S. Federal Communications Commission (FCC) granted the company a temporary 30-day authorization to test D2D connectivity using 800 MHz spectrum on up to 100 commercially available devices running through Sept. 12.
That testing comes amid a broader push by major U.S. carriers to expand satellite-based D2D coverage. On May 14, AT&T (NYSE: T), T-Mobile (NASDAQ: TMUS), and Verizon (NYSE: VZ) announced an agreement in principle to form a joint venture that aims to expand satellite-based D2D wireless coverage in the United States by pooling spectrum resources, improving D2D capacity, and creating a more unified platform for satellite providers. Among the three carriers, currently only T-Mobile uses Starlink to fill coverage gaps, while AT&T and Verizon have agreements in place with AST SpaceMobile.
The company also has an agreement in place with Tokyo-based Rakuten (OTCMKTS: RKUNF)
In its Aug. 10 update, AST said the Rakuten-AST joint venture had been preliminarily selected by Japan’s Ministry of Internal Affairs and Communications for the J-LEO initiative, with a total expected value of up to approximately $1 billion in non-dilutive, non-debt government capital. Rakuten has said it is targeting the launch of domestic service in Q4 2026.
While the stock remains highly volatile with a current beta of 2.75 and short interest at 18.67% of the float, or $4.08 billion worth of ASTS shares, institutional investors taking the long view are buoying the stock. Over the past 12 months, inflows from institutional buyers have totaled more than $5 billion, while institutional sellers’ outflows have been limited to less than $400 million.
AST SpaceMobile continues to work its way toward its target of 45 BlueBird satellites in LEO by early 2027. A company press release confirmed that it is well on its way to achieving that goal, with “production advancing through BlueBird satellite 42” as it continues to scale its constellation.
The article "AST SpaceMobile Is Down 54%—Can FCC Progress and BlueBirds Reverse the Slide?" first appeared on MarketBeat.
