Why AST SpaceMobile Stock Is Plummeting Today

Key Points

• AST SpaceMobile is raising capital through a private offering of convertible notes and a direct offering of common stock, which may lead to some stock dilution.

• The company recently formed a joint venture with Vodafone to bring space-based broadband to Europe, with commercial operations planned for 2026.

• 10 stocks we like better than AST SpaceMobile ›

Shares of AST SpaceMobile (NASDAQ: ASTS) are tumbling on Friday, down 10% as of 3:00 p.m. ET. The move comes as the S&P 500 and Nasdaq Composite both gained 0.4%.

The space-based broadband provider announced a private offering that sparked dilution concerns.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

AST is raising funds

The company announced that it is seeking to raise $500 million through a private offering. The convertible notes will be due in 2032, and initial purchasers will get the option to acquire another $75 million in notes. A direct offering of its common stock will be used to raise an additional $135 million in order to repurchase existing convertible notes.

While the company is using capped-call transactions to mitigate dilution, some dilution is still likely.

Image source: Getty Images.

AST is teaming up with Vodafone

In more positive news, last month the company announced it was partnering with Vodafone to create a joint venture, SatCo. SatCo will bring space-based broadband to Europe. Commercial operations are expected by 2026.

Investors should know the risks

The very nature of AST SpaceMobile's business means stock offerings and debt raises are something to be expected. It takes an enormous amount of capital to build and launch a network of satellites into space and then maintain and operate it. Since it is still in its early days, its revenue is nearly non-existent. It must establish its network first.

I think AST has a lot of potential, but it faces major challenges, including competition from much better capitalized players like Elon Musk's Starlink, which can more cheaply launch its satellites thanks to SpaceX. For investors with significant risk tolerance, AST could pay off, but it's a tall order.

Should you invest $1,000 in AST SpaceMobile right now?

Before you buy stock in AST SpaceMobile, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and AST SpaceMobile wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $636,774!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,064,942!*

Now, it’s worth noting Stock Advisor’s total average return is 1,040% — a market-crushing outperformance compared to 182% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 21, 2025

Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.