It was not so long ago that satellite communications were the platform of last resort. Mostly for rural dwellers who had no access to high-speed internet by any other means, satellite was expensive, metered, and often of poor quality. But now, satellite communications are increasingly viable. AST SpaceMobile (ASTS) surged nearly 6% in Wednesday afternoon’s trading thanks to plans to launch a new satellite network carried aloft by SpaceX.
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AST SpaceMobile is working on what it describes as “the first space-based cellular broadband network accessible directly by standard smartphones designed for both commercial and government use.” That, in turn, requires satellites, and sometime around September 12, the first five of AST’s commercial satellites will go into orbit around the Earth.
The satellites, dubbed “BlueBirds,” will comprise the largest commercial communications network in low Earth orbit. The initial service will not go that far, however; reports note the early service will offer access to “…beta test users for AT&T (T) and Verizon (VZ).” Nevertheless, the end target is to achieve 100% nationwide coverage. While the exact timing of the launch is unclear—it depends on a range of factors, including weather conditions on launch day—the launch will be broadcast live on AST SpaceMobile’s YouTube channel.
Incentive Plan Change
Meanwhile, as a more internal measure, AST SpaceMobile’s shareholders recently approved an incentive plan for several of its staff and outside consultants. The original plan was adopted by the board of directors in late July and, with shareholder approval, can now be put in place. The plan calls for 3,415,079 shares of Class A Common Stock to be issued, along with an additional 2,000,000 shares annually, if the plan’s administrator calls for it. Those shares, in turn, will be offered up as compensation in a bid to “…attract and retain talent by aligning the interests of service providers with those of shareholders.”
Is ASTS a Buy or Sell?
Turning to Wall Street, analysts have a Strong Buy consensus rating on ASTS stock based on three Buys assigned in the past three months, as indicated by the graphic below. After a 578.27% rally in its share price over the past year, the average ASTS price target of $37.30 per share implies 35.78% upside potential.
