Shares of AST SpaceMobile Inc. (NASDAQ:ASTS) dropped 7% on Tuesday morning after the satellite communications company announced plans to raise up to $800 million through an at-the-market (ATM) stock offering.
In a recent regulatory filing, AST SpaceMobile said it had entered into an equity distribution agreement with ten major investment banks that will act as agents for the sale. The participating firms include B. Riley Securities, Barclays Capital, BofA Securities, Cantor Fitzgerald, Deutsche Bank Securities, Roth Capital Partners, Scotia Capital, UBS Securities, William Blair, and Yorkville Securities.
Under the terms of the agreement, the company may issue and sell Class A common shares periodically using a variety of methods allowed under Securities Act Rule 415, such as direct market sales on Nasdaq, transactions with market makers, or privately negotiated block trades.
AST SpaceMobile stated that shares would be sold at prevailing or market-related prices, giving the firm flexibility to raise capital when market conditions are favorable. The company added that the program provides an alternative to a traditional follow-on offering, allowing it to access funding with potentially less immediate dilution for existing shareholders.
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