Just over a year ago, Astra went public on the Nasdaq Global Select Market, closing at $12.90 on its first day. Astra’s stock price has since plummeted to less than $1, starting a clock before it could be moved off the Nasdaq.
Lackluster performance of SPACs in general
Astra went public like many other space companies during the 2021 rush to IPO through SPACs –Special Purpose Acquisition Companies. These public companies are created to merge with prominent private companies and bring them to the public stock market. Companies like Rocket Lab, Virgin Galactic, and Redwire Space went down similar routes, and they have had less than outstanding performance over the last year.
Astra has seen the worst of it. Only a fraction of their starting value, the company’s market cap in the last year has dropped by almost $2 billion. First off, I would like to say I’m no financial reporter, and definitely no Micheal Sheetz, but even the most basic on-lookers can see Astra doesn’t look good stock-wise.
On August 24, Astra closed at $0.9280 a share, outside the minimum $1 the Nasdaq requires to remain on the market. If the average closing price remains below $1 for the next 30 days, the Nasdaq could give Astra a formal notice that they will be delisted if the price does not improve. Then Astra could be given up to 180 days to improve its stock price before being delisted altogether. If this happens, shareholders could still retain and trade their shares if the company is moved to the over-the-counter bulletin board or the pink sheets.
What’s to blame for Astra’s low stock price?
Oh, where to start? There are a number of things to look at that have impacted Astra’s stock price. One place to look is their launch record. Launching their Rocket 3 variant a total of 7 times, Astra has only been able to reach orbit successfully twice. Now, launching rockets to space is a challenging task, doing that while also pleasing shareholders? That’s a whole other story.
The company’s most recent launch attempt for NASA’s TROPICS program failed during the second stage burn, causing the loss of both payloads. Since then, Astra has announced the retirement of Rocket 3 and the move to building Rocket 4, a bigger, more capable, and hopefully more reliable rocket. NASA then announced it was looking for alternatives to launch the remaining CubeSats, giving Astra’s competitors the ability to steal the launches away.
So low launch performance it is, then, right? Well, it’s definitely part of it. Launches from both Rocket Lab and Astra have led to high market volatility and exchanges pausing trading on those stocks, but other factors could be at play. Astra promised to launch almost daily by 2025, something that is hard to believe with today’s abilities, but we’ve already seen SpaceX push what is possible. However, with Astra still trying to get to space successfully and the smallsat launch market growing more and more crowded, it’s hard to imagine this will come to fruition.
Only time will tell if Astra will survive the stock market. Maybe, just maybe Rocket 4 will be the company’s savior, and get some large contracts to pull Astra back from this low.