US Stock Market Move | The plan to issue a $1 billion convertible bond has raised concerns of equity dilution, causing AST SpaceMobile (ASTS.US) to fall more than 13%.

On Thursday, AST SpaceMobile (ASTS.US) fell by more than 13% in early trading, with the stock price halved from its historical high at the end of May to $57.09. On the news front, the company disclosed plans to raise a large amount of new funds through the issuance of convertible preferred notes, triggering concerns among existing shareholders about equity dilution. The company announced plans to raise $1 billion by privately issuing convertible preferred notes due on February 1, 2034. The pricing and completion of this issuance are currently pending market conditions. The funds raised will be used to acquire additional orbital rights and explore partnership or acquisition opportunities to reduce reliance on third-party launch providers. AST SpaceMobile is building the first satellite network that can directly provide broadband services to regular mobile phones. The company has established partnerships with several major carriers and successfully launched several BlueBird satellites. However, building a complete Globalstar, Inc. constellation remains costly and capital-intensive. In February of this year, ASTS announced a similar issuance of $1 billion in convertible notes, which also triggered a sell-off.