Why AST SpaceMobile Stock Crashed on Monday
Key Points
A Blue Origin launch carrying AST's newest satellite failed to put the satellite in orbit over the weekend.
AST has three more satellites almost ready for launch to replace it.
SpaceX, however, has 650 DTC Starlinks already in orbit and competing with AST.
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AST SpaceMobile (NASDAQ: ASTS) stock -- the company that started the direct-to-cell (DTC) satellite revolution five years ago -- fell 9.9% through 11:10 a.m. ET Monday after announcing its newest BlueBird satellite failed to reach its intended orbit after launch on Sunday. Don't blame AST for this failure, however.
It's all Blue Origin's fault.
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Image source: Getty Images.
What went wrong with AST's satellite?
AST broke the bad news to investors yesterday afternoon. "BlueBird 7" took flight atop a Blue Origin New Glenn rocket on Sunday, aiming for a stable orbit. While Blue's second stage rocket successfully separated from the reusable first stage, however (which first stage then conducted a successful landing on a barge at sea), the second stage failed to put the satellite in the correct orbit, such that AST is going to have to de-orbit the satellite and write it off.
The good news is that AST anticipates the occasional launch failure, insures its satellites against such snafus, and expects insurance to cover the cost of this failure. The bad news is that the failure may delay start of beta service for AST's DTC service -- and delay the start of AST collecting revenue and earning profit from this service.
What this means for AST SpaceMobile stock
The other good news is that AST hasn't put all its eggs in one basket. Where on satellite launch fails, others may succeed, and AST says it will have three more satellites ready to launch shortly. Launches are scheduled to take place "every one to two months on average during 2026," and AST has a goal of putting 45 satellites in orbit before 2026 is done.
The other bad news, though, is that SpaceX already has 650 DTC Starlink satellites in orbit and is already providing service.
AST still doesn't.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AST SpaceMobile. The Motley Fool has a disclosure policy.
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