Space Company Astra to Go Private with Founders in Cut-Rate Deal
Rocket LV0006 Tilts During Liftoff
Rocket LV0006 from Astra’s NASASpaceflight, during liftoff.
Founders’ Agreement in the Midst of Company’s Challenging Time
Space company Astra, known for its aspirations to mass produce small rockets and increase launch frequency, is set to go private in a deal with its founders. Astra’s co-founders, Chris Kemp and Adam London, who are also the CEO and CTO respectively, have signed an agreement to acquire all outstanding common stock for 50 cents a share. The deal is expected to be concluded in the second quarter, marking a major shift for the once publicly-traded company.
Board Committee’s Decision and Insurance Against Bankruptcy
A special board committee, consisting of members excluding Kemp and London, voted in favor of the take-private plan. The founders previously adjusted their offer from $1.50 a share to the final 50 cents. The committee strongly believes that this agreement represents the best alternative to filing for Chapter 7 bankruptcy, providing a feasible path forward for the company.
Astra witnessed a decline in the value of its stock, starting from 85 cents per share at the time of the announcement, ultimately closing at 58 cents per share on Thursday. The current market value of the company stands at approximately $13 million, a fraction of the $2.6 billion equity valuation when it went public through a Special Purpose Acquisition Company (SPAC) three years ago.
Prior Accomplishments and Setbacks of Astra
Despite Astra’s notable successes of reaching orbit twice with its rockets, the company has also encountered significant challenges along the way. It suffered from three launch failures, causing a decline in operational activities. Astra’s rocket-launching operations have been on hiatus since a mission failure in June 2022. The acquisition of a spacecraft propulsion business did not bring in substantial quarterly revenue, leading to last year’s layoffs as part of the company’s survival strategy.
The company has faced financial losses of over $750 million since the initial announcement of its intention to go public.
