A class action lawsuit was filed against AST SpaceMobile, Inc. (NASDAQ:ASTS) on April 17, 2024. The plaintiffs (shareholders) alleged that they bought ASTS stock at artificially inflated prices between November 14, 2023 and April 1, 2024 (Class Period) and are now seeking compensation for their financial losses. Investors who bought ASTS stock during that period can click here to learn about joining the lawsuit.
ASTS is a direct-to-sell technology company building space-based cellular broadband providing space 5G, cellular, and broadband services in areas with coverage gaps. The company is building a low-latency broadband architecture.
The plaintiffs maintain that AST SpaceMobile and two of its senior officers deceived investors by omitting truthful information about the production of the Company’s five Block 1 BlueBird satellites and ancillary issues from SEC filings and related material.
The information became clear on April 1, 2024, when the company issued a statement, after the market closed, saying that the production of five Block 1 BlueBird satellites had been “impacted by two suppliers, leading to delays in integration and testing.” Consequently, the company said that the transport of the five satellites to the launch site was delayed to July or August instead of the first quarter of the year.
Interestingly, during the Class Period, AST SpaceMobile consistently maintained that the procurement of the related materials for the production and development of Block 1 BB satellites was underway in full swing. The company even noted that it was assembling and testing the satellites for the dedicated orbital launch scheduled in the first quarter.
As per the class action lawsuit, AST SpaceMobile caused its stock to trade at artificially inflated prices by knowingly and recklessly misleading investors about the company’s business prospects during the Class Period.
Notably, on April 2, ASTS stock plunged 23.6%, causing massive damage to shareholders’ returns.
