Key Takeaways
- B. Riley’s Mike Crawford elevated ASTS from Hold to Buy, maintaining an $85 price objective.
- Shares of AST reached $133.86 in May before plummeting over 50% in subsequent months.
- A 17% single-day decline occurred Thursday following news of a $1 billion convertible debt offering.
- Analyst support has weakened significantly: only 21% now recommend buying ASTS versus the typical S&P 500 range of 55–60%.
- Competition from SpaceX and limited satellite orbit availability present ongoing challenges for investors.
Shares of AST SpaceMobile are currently hovering between $55 and $57, representing a collapse of more than half their value from the May high of $133.86. Following this rapid descent, one Wall Street analyst believes the selling has created an attractive opportunity.
Mike Crawford from B. Riley raised his rating on ASTS to Buy from Hold this Friday, while leaving his $85 price objective unchanged. Crawford had previously lowered his stance on the stock in January when it traded near the $100 mark. Now, with the price approximately halved, he believes the risk-to-reward balance has improved considerably.
On Friday, AST stock climbed roughly 0.7% to reach $55.37, even as broader market indices declined — the S&P 500 shed 1.3% and the Dow Jones lost 0.8%.
The unchanged price target accompanying this upgrade sends a clear message: Crawford’s fundamental assessment of the company remains stable, but the valuation entry point has become more compelling.
Why the $1 Billion Convertible Debt Offering Rattled Markets
The most dramatic single-session decline occurred Thursday, when AST shares tumbled 17% after the company unveiled plans for a $1 billion private placement of convertible senior notes. These instruments feature an initial conversion price slightly below $80 per share — representing approximately a 20% premium over the pre-announcement trading level.
Convertible securities pose dilution risks since they can eventually transform into equity, reducing the ownership stake of current shareholders. Additionally, certain convertible note purchasers employ hedging strategies that involve shorting the underlying shares to capture bond-like returns, creating additional downward price pressure.
Detractors highlighted that AST was changing hands above $130 just weeks ago in late May. Executing this capital raise at a substantially lower conversion threshold translates into greater dilution compared to completing the transaction during the earlier, higher-priced period.
The company stated that funds raised will support expansion initiatives and help “secure additional access to orbit” for its satellite-based cellular broadband infrastructure.
The SpaceX Challenge Looms Larger
While the convertible note announcement dominated recent headlines, rivalry with SpaceX may represent the more fundamental long-term concern. Starlink has already established a substantial constellation of operational satellites and maintains considerable control over orbital access — precisely what AST requires more of to execute its strategy.
SpaceX dropped below its $135 IPO price threshold for the first time Thursday, suggesting that enthusiasm across the broader space industry has diminished.
Twelve months ago, 67% of Wall Street analysts assigned Buy ratings to ASTS. That proportion has contracted sharply to merely 21%, falling well short of the 55–60% Buy rating typical for S&P 500 constituents. The consensus analyst price target stands near $87, closely aligned with Crawford’s $85 projection.
