Astra plans a reverse stock split, seeks to raise up to $65 million in offering


In this article

Astra CEO Chris Kemp speaks inside the company’s headquarters during its Spacetech Day, May 12, 2022.
Brady Kenniston / Astra

Spacecraft engine manufacturer and small rocket builder Astra plans to conduct a reverse stock split at a 1 to 15 ratio, the company disclosed in a securities filing Monday.

Astra also seeks to raise up to $65 million through an “at the market” offering of common stock, the filing said.

Shares of Astra were little changed in after-hours trading from their close at 40 cents a share. The company went public in July 2021 via a SPAC deal, at a near $2 billion valuation, before the stock began to tumble after launch failures and development setbacks.

Sign up here to receive weekly editions of CNBC’s Investing in Space newsletter.

Astra’s filing said the reverse stock split is expected to take place on or before October 2, after its board approved the plan July 6. The company previously outlined a reverse split as part of its plan to avoid delisting by the Nasdaq exchange.

A reverse split does not affect the fundamentals of a company, as it is not dilutive to the stock and does not change the company’s valuation, but it would lift the stock price by combining shares. A reverse split can be seen as a sign a company is in distress and is trying to “artificially” boost its stock price, or it can be viewed as a way for a viable company with a beaten up stock to continue operations on a public exchange. Functionally, a reverse split, often done as a 1 for 10, would mean a $3 stock, for example, would become $30 a share.

Articles You May Like

Automakers grow frustrated over pace of UAW negotiations as new strike deadline looms
Stocks making the biggest moves premarket: Rivian, SolarEdge, Sphere Entertainment and more
SpaceX wins first Pentagon contract for Starshield, its satellite network for military use
Bill Ackman’s ‘SPARC’ gets OK from the SEC and he’s ready for a deal: ‘please call me’
CEO of private credit giant Ares says his firm is benefitting from rising rates