AST SpaceMobile sets up call as investors await satellite news (NASDAQ:ASTS)

North America from space

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Updated: After a morning missing out on a rally in other tech-related names, AST SpaceMobile (NASDAQ:ASTS) rallied quickly Friday afternoon to a 16% gain in what may be some short-squeeze trading action. Short interest in the stock was about 25% of its float last month, setting up some volatility in ASTS ahead of a Monday update expected to deliver news on a key milestone for its BlueWalker 3 test satellite.

Original item: AST SpaceMobile (ASTS) had been 2.3% lower Friday morning, trailing a broadly higher Communications sector, as the company announced a quarterly business update call that investors expected would bring news of a key satellite catalyst.

The company will hold a call at 5 p.m. ET on Monday, and says it will take questions from retail and institutional shareholders, who are encouraged to submit questions to management.

Investors, though, are on pins and needles after Thursday came and went without an update on the planned “unfurling” of the full array of BlueWalker 3, the company’s key test satellite expected to provide direct communication with ordinary commercial mobile devices.

The company successfully launched BlueWalker 3 into orbit in mid-September, and CEO/Chairman Abel Avellan said in early October that control of the satellite from ground stations had been under way for about three weeks.

The unrolling of the satellite’s array is the key precursor for operational testing of the company’s mission – direct call connectivity between a satellite and ordinary mobile phone – and it sets up what Barclays (among others) considers a “binary” opportunity in the stock.

AST SpaceMobile has been heavily shorted, suggesting a big move in some direction on any news about BlueWalker 3.

In preliminary quarterly result estimates, the company said it ended the quarter with liquidity of about $199.5M (down $2.9M for the quarter), and said it expected quarterly nonrecurring development and engineering expenses would be $41M-$43M.

The company said it had incurred about $92M in capitalized costs tied to assembly, testing and deployment of BlueWalker 3, and $43.1M in capitalized property and equipment costs mainly related to Texas facilities, satellite antennas, satellite parts assembly and test equipment, and leasehold improvements.

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