Why AST SpaceMobile Stock Jumped 14.1% Today
Key PointsAST SpaceMobile and Rakuten announced a joint venture, Rakuten AST, to use AST's satellites to extend cell service to parts of Japan with poor coverage and keep people connected in a disaster.
On Monday, Nov. 9, the stock of AST SpaceMobile (ASTS) surged 14% after the company and Japanese carrier Rakuten announced a joint venture aimed at bringing satellite cell service to Japan. This news came on the heels of both the S&P 500 (^GSPC) and the Nasdaq Composite (^IXIC) posting gains of 2.3% and 2.7%, respectively.
AST SpaceMobile and Rakuten, already partners since 2020, have agreed to form Rakuten AST, a subsidiary controlled by Rakuten. This entity will utilize AST's satellites to extend cellular coverage to regions with poor reception or ensure connectivity during emergencies. The Japanese government has pledged up to approximately $1 billion in funding for Rakuten AST, a commitment previously disclosed following the company's successful bid in June.
Following the announcement, AST SpaceMobile's stock experienced a slight correction in after-hours trading as the company reported its earnings. Revenue for the period nearly tripled compared to the previous year, reaching $42.3 million, although this figure fell short of market expectations. The company also reported a loss of $0.44 per share while maintaining its full-year revenue forecast of $150 million to $200 million.
Despite the setback, AST SpaceMobile remains optimistic about its future plans. The company anticipates offering intermittent coverage in the U.S. and other markets by the end of the year. Additionally, AST aims to have 45 of its BlueBird satellites operational by mid-2027.
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