Competitor Starlink has failed a satellite launch. Its shares plummet 15%

Shares of space company AST SpaceMobile collapsed 15% on the premarket on April 20 after a failed satellite launch, they later slowed the rate of decline. The culprit of the incident was the rocket company of Jeff Bezos - Blue Origin, writes Barron's. The papers of this corporation are not listed on the stock exchange.

The AST SpaceMobile satellite launched by a Blue Origin rocket on April 19 was improperly launched into orbit and will now have to be decommissioned. "Although the satellite separated from the launch vehicle and powered up, its orbital altitude is too Ma to sustain operation using the on-board engines. It will be deorbited (deorbited)," an AST SpaceMobile spokesperson told Barron's in a written comment. The cost of the satellite is expected to be reimbursed under the company's insurance policy, he added. Deorbiting usually means the satellite will burn up completely in the dense atmosphere.

The satellite launch incident was a blow to both AST SpaceMobile and Blue Origin, both of which are looking to compete in the space race with Elon Musk's SpaceX. Blue Origin expects to become a major player in the commercial reusable rocket launch market, while AST SpaceMobile plans to deploy a constellation of satellites to provide 5G connectivity anywhere in the world before SpaceX's Starlink Mobile project achieves a similar goal, Barron's notes.

AST SpaceMobile said it is still aiming to put about 45 satellites into orbit by the end of 2026. The company now has six satellites, but it needs between 45 and 60 to launch a commercial service in the northern latitudes, a goal the company hopes to reach this year. SpaceX, for its part, promises to launch a similar Starlink Mobile service by the end of next year.

Meanwhile, Amazon is preparing to enter the fray for the mobile satellite market in 2028 following its recent acquisition of Globalstar. Meanwhile, Amazon is also relying on Blue Origin and other suppliers to launch its satellites.

William Blair analyst Louis DiPalma noted that although AST has reaffirmed its year-end targets, achieving them will not be easy. In his view, it is the quality of the first test launches that will be the main factor affecting the company's share price, given the pressure from industry heavyweights. DiPalma added that many of AST's partner operators are likely to begin customer trials later this year, when the company's network reaches a volume of around 25 satellites. For now, the analyst maintains a neutral rating on AST stock.

Of the 13 analysts who are watching the company's securities, five recommend buying them, the same number of analysts recommend holding, three recommend selling, MarketWatch data show. The average target price for the securities is $93, which implies their growth of 8% from the previous closing level.

This article was AI-translated and verified by a human editor