It's impossible to be happy when your competitors ink a potentially groundbreaking deal, as satellite designer and manufacturer AST SpaceMobile, Inc. (NASDAQ:ASTS) is finding out firsthand. With SpaceX and EchoStar Corp. (NASDAQ:SATS) signing a spectrum agreement valued at approximately $17 billion, AST found itself as the third wheel. Subsequently, ASTS stock dropped around 4% in late afternoon trading on Monday. Still, this fallout could be an opportunity for contrarian options speculators.
At first glance, circumstances look unpleasant for AST. Under the SpaceX-EchoStar deal, the terms consist of up to $8.5 billion in cash and up to $8.5 billion in the former entity's stock. In addition, the agreement provides for SpaceX to fund an aggregate of approximately $2 billion of cash interest payments payable on EchoStar debt through November 2027.
