In a move that sent ripples through the market, the founders of Astra Space Inc. have unveiled plans to take the company private at a valuation of approximately $30 million, as disclosed in a securities filing on Thursday.
Chairman and CEO Chris Kemp, alongside Chief Technology Officer Adam London, submitted a formal proposal to the Astra board of directors on Wednesday, outlining their intention to acquire all outstanding company stock at a price of $1.50 per share.
This proposed price tag reflects an astounding 103% premium over Wednesday’s closing value of 74 cents per share, amounting to an estimated market capitalization of $16 million. The stock of Astra Space opened today at $1.27 and while maintaining its opening price, the stock is experiencing heavy treading. As compared to its average 524.12K volume, 39.2 million shares have been traded this morning so far.
At the time of this publication, Astra Space Inc stock (ASTR) has witnessed a surge.
Astra Space Inc
Current Price: $1.27
Change : +0.53
Change (%): (71.46%)
Volume: 39.2M
Source: Tomorrow Events Market Data
In a letter addressed to the board, Kemp and London articulated their rationale, stating, “We believe that Astra’s strategic objectives and business prospects will be best served as a private company. Taking the company private while delivering a meaningful premium to current shareholders allows for the best interests of shareholders as well as the Company, its employees, and its customers to be met.”
To facilitate this ambitious move, the founders anticipate securing between $60 million to $65 million in capital. This funding will encompass the purchase price, transaction expenses, and bridge financing. Additionally, Kemp and London expressed openness to allowing certain accredited investor stockholders to participate in the transaction by rolling their equity.
Astra’s rocket-launching endeavors have faced significant setbacks, culminating in a mission failure in June of 2022. Consequently, the company is grappling with dwindling cash reserves, with its recently acquired spacecraft propulsion arm yet to yield substantial quarterly revenue. To pivot their focus towards spacecraft engine production, Astra executed a 25% reduction in its workforce in early August.
In a recent disclosure, Astra revealed that its cash reserves had dipped below $10.5 million, leading to a default on a debt raise, a situation promptly remedied by securing financing from two investors to settle the outstanding debt.
The trajectory of Astra’s fortunes has been marked by a rapid ascent and subsequent challenges. The company went public via a Special Purpose Acquisition Company (SPAC) merger in February 2021, boasting a valuation of $2.6 billion. Astra’s initial objective was to streamline the cost-effective production of small rockets. Despite successfully achieving orbit twice, the company grappled with three launch failures post-IPO, presenting a complex landscape for the company and its stakeholders.
In the face of mounting challenges, the Astra Space founders’ bold proposal to take the company private at a $30 million valuation signals a strategic shift aimed at safeguarding the best interests of shareholders, employees, and customers alike.
