Why AST SpaceMobile Stock Crashed Today

So it seems I was both right and right about the SpaceX (Nasdaq: SPCX) IPO.

Right, because I predicted SpaceX IPO fever could drive space stocks higher. Indeed, shares of satellite communications company AST SpaceMobile (Nasdaq: ASTS) were at one point up 61% since my prediction.

I was also right, unfortunately, about what would happen on the IPO date. And this, in a nutshell, is why AST stock fell 10.5% through 11:25 a.m. ET today.

Image source: Getty Images.

Three scenarios for SpaceX and space stocks

Four months ago, I ran down three theories for how the SpaceX IPO might play out, both for SpaceX and for other space stocks. Briefly, these scenarios went like this:

• Option 1: SpaceX IPO fever could make space stocks more popular, driving up their stock prices.
• Option 2: SpaceX could make space stocks not named SpaceX less popular, if they suffered by comparison to SpaceX, which is so much bigger and more profitable than SpaceX's competitors.
• Or Option 3: Investors wanting to buy SpaceX stock might sell shares of other space stocks to raise cash to buy SpaceX instead.

What's next for AST SpaceMobile stock

The fact that AST stock went up so much in four months means I was right about Option 1. The fact that AST stock is selling off today -- the same day investors are presumably preparing to pay for their new SpaceX IPO shares -- suggests I was right about Option 3 as well.

And Option 2? This remains to be seen. SpaceX's IPO prospectus made clear SpaceX isn't nearly as profitable as we once believed -- indeed, that it's losing money. Bigger isn't necessarily better, and AST could still be a winner. It still needs to get some more satellites in orbit, of course, and begin beta testing.

But at least there's a chance.

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.