Why AST SpaceMobile Stock Finally Popped on Friday

After sliding lower all week long, shares of AST SpaceMobile (ASTS 8.05%) turned around and moved higher on Friday, gaining 5% through 10:45 a.m. ET. Why? Probably because of AST’s 8-k filing with the SEC yesterday.

More limited in focus than a 10-K filing, an 8-K highlights news important to a company. In this case, AST wanted to emphasize what it said in a press release issued Wednesday: It has officially bought back all its stock warrants.

What this means for AST SpaceMobile

This isn’t exactly a surprise. As I wrote last month, AST had already announced its intention to “redeem all of its publicly traded warrants to purchase shares of Class A common stock,” requiring warrant holders to either exercise their warrants and pay $11.50 to convert each warrant into a new share of AST stock or allow AST to buy back those warrants for a mere penny apiece.

There was only one logical choice, and now most of the warrant holders have made it: AST says 98.26% of warrant holders tendered their warrants and paid their money. (Presumably, the other 1.74% never got the memo and were cashed out at a pittance.)

AST is now $153.6 million richer, and its share count has increased 13.4 million.

Is AST SpaceMobile stock a buy?

S&P Global Market Intelligence data last clocked AST’s cash reserves at $285.1 million. So based on this latest news, the company probably has close to $440 million in cash.

Management says this should suffice to pay for its “near-term operational initiatives” such as building another 20 BlueBird communications satellites, to cover interest obligations on its $212 million in debt, and maybe even to pay down that debt load a bit. More generally, it’s enough money to keep the company in business for another 18 months or so at its current yearly burn rate of $280 million.

AST may not be profitable yet, but it isn’t heading for bankruptcy right away, either.