Astra Space's SPACtacular Fall: Company to Go Private at 50 Cents Per Share
Company's ultra-cheap rockets crashed more than they soared
Astra Space (NASDAQ: ASTR) announced on Thursday that the company’s founders planned to take the company private by offering $0.50 for outstanding shares of common stock less than three years after going public on the NASDAQ exchange.
In November 2023, Kemp and London offered to take the company private with an offer of $1.50 per share, three times more than the current offer. The new plan calls for Astra Space to merge with an acquiring entity named Parent.
“The Parent was formed by Chris Kemp, Astra’s co-founder, chief executive officer and chairman, and Dr. Adam London, Astra’s co-founder, chief technology officer and director. The Parent is expected to be owned, at the closing of the transaction, by a number of long-term investors of the Company and its predecessor, including Mr. Kemp and Dr. London,” Astra said in a press release.
“A special committee (the ‘Special Committee’) of the Board of Directors of the Company (the ‘Board’), comprised solely of independent and disinterested directors, advised by its own independent financial and legal advisors, and taking into account Astra’s current liquidity situation, among other factors, determined that the proposed transaction is in the best interests of Astra and the holders of Astra’s common stock other than Chris Kemp, Dr. Adam London and their respective affiliates and unanimously recommended that the Board approve the transaction,” the press release added.
The move marks a precipitous decline for the company, whose original plan was to launch hundreds of ultra-inexpensive rockets with satellites aboard every year. The company launched its Rocket 3 family only seven times, with two successes and five failures. Another Rocket 3 was destroyed by a fire on the pad prior to launch.
Astra abandoned the Rocket 3 family after a launch failure destroyed a pair of NASA environmental satellites in June 2022. The company began developing the larger Rocket 4 booster. Astra also manufactures a line of spacecraft propulsion systems as a result of its acquisition of Apollo Fusion in 2021.
Astra Space began trading on NASDAQ on July 1, 2021, after merging with named Holicity, a special purpose acquisition company (SPAC) backed by Microsoft Founder Bill Gates and billionaire telecom entrepreneur Craig McCaw. The merger provided $500 million in cash to Astra and valued the company at $2.1 billion.
A SPAC is an investment vehicle that is already traded on a stock exchange. A SPAC’s entire purpose is to take another company public under its own name by merging with it.