Astra’s long and strange journey in the space business takes a new turn. The company announced Thursday that it is going private at an extremely low valuation.
Four years ago, the Alameda, Calif.-based rocket company came out of stealth with grand plans to develop a no-frills rocket that could be launched frequently. “The theme that really sets this company apart and captures the imagination of our customers, investors and employees is the idea of building and launching rockets every day,” said Astra co-founder Chris Kemp. . Factory tour in February 2020.
Almost exactly one year later, on February 2, 2021, Astra went public through a special acquisition purpose company (SPAC). “This transaction reflects Astra’s implied pro forma enterprise value of approximately $2.1 billion.” the company said at that time. At one time, the company’s stock was trading above this valuation.
But then the rockets began to fail. Of the seven launches of the company’s Rocket 3 rocket, only two were successful. In August 2022, the company announced a transition to a larger Rocket 4 vehicle. Launch tests were scheduled to begin in 2023, but this did not materialize. As a result, the company’s stock price plummeted.
Last November, Kemp and company co-founder Adam London offered to buy Astra stock at about twice the price of $1.50. The company’s board of directors did not accept the deal. Then, in late February, Kemp and London largely dropped their bid to take the company private, warning that “bankruptcy is imminent” if the company doesn’t accept a new offer. They offered $0.50 per share, which is well below the trading price of about $0.80 per share.
Astra announced Thursday that the deal is nearing completion.
“Astra Space, Inc. today announced that it has entered into a definitive merger agreement under which the acquiring company will acquire, subject to customary closing conditions, all shares of Astra common stock not already owned by the acquiring company, per share. Agreed to obtain “cash,” for $0.50. the company said. The acquisition entity is comprised of Kemp, London and other long-term investors.
Where Astra goes from here is anyone’s guess. Rocket 4 will likely be months or even years off the launch pad. It faces stiff competition from established small launch companies such as Rocket Lab and Firefly, as well as new entrants such as ABL Space and Stoke Space. Additionally, both of these small launch companies are being priced out by SpaceX’s Transporter mission, which launches dozens of satellites at a time with Falcon 9 boosters.
Additionally, Astra’s spacecraft engine business, previously acquired from Apollo Fusion, may or may not currently be profitable. Questions about long-term viability In the same way.
“I don’t blame management for seizing the opportunity to raise hundreds of millions of dollars by becoming a SPAC, but a pre-revenue launch company without a proven rocket will probably never be suitable for the public markets,” Case said.・Mr. Taylor said.is an investor and author of Case resolution newsletter.
Taylor added that he hopes the Astra spacecraft engine will find a way to succeed in the new Astra because the space industry values performance. “I hope that diamond survives and thrives,” he said.