Astra CEO Chris Kemp delivers a speech at the company’s headquarters during its Spacetech Day on May 12, 2022.
Image credit: Brady Kenniston / Astra
Astra, a spacecraft engine manufacturer and small rocket builder, has announced its plans to conduct a reverse stock split at a ratio of 1 to 15, according to a securities filing released on Monday.
The filing also reveals that Astra intends to raise up to $65 million through an “at the market” offering of common stock.
After the market closed at a price of 40 cents per share, Astra’s stock remained relatively unchanged in after-hours trading. The company went public in July 2021 through a SPAC deal, initially valuing it at nearly $2 billion. However, the stock experienced a decline following launch failures and development setbacks.
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The reverse stock split, approved by Astra’s board on July 6, is expected to occur on or before October 2. The purpose of the reverse split is to avoid delisting by the Nasdaq exchange, and it will not impact the company’s valuation or stock fundamentals. Instead, it will consolidate shares to increase the stock price. While a reverse split can be perceived as a distress signal and an attempt to artificially boost the stock price, it can also provide a means for a viable company with a struggling stock to continue operating on a public exchange. For example, a 1-for-10 reverse split would result in a $3 stock becoming $30 per share.
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