The stock of AST SpaceMobile (ASTS) is down 13% after the company’s plans to launch a satellite for space-based broadband internet service failed.
An AST SpaceMobile satellite being carried by a Blue Origin rocket was put into an incorrect position on April 19 and it will now have to be taken out of orbit.
“The altitude is too low to sustain operations with its onboard thruster technology and will be de-orbited,” said AST SpaceMobile in a statement.
De-orbiting a satellite usually means allowing it to burn up in the atmosphere. However, AST SpaceMobile said that the cost of taking out the satellite will be covered by its insurance policy.
Regardless, the failed satellite launch is seen as a blow for both AST SpaceMobile and Blue Origin, the privately held rocket company backed by Amazon (AMZN) founder Jeff Bezos.
Both AST SpaceMobile and Blue Origin are trying to compete against Elon Musk’s rival satellite company SpaceX.
AST SpaceMobile is racing to put a satellite constellation in orbit that is capable of providing 5G-quality internet service on Earth.
AST SpaceMobile said it continues to target placing 45 internet satellites into low Earth orbit by the end of this year.
With six satellites currently in orbit, AST SpaceMobile needs between 45 and 60 operational to offer commercial internet service on Earth.
Prior to today (April 20), ASTS stock had risen 312% over the past 12 months to trade at $85.53 U.S. per share.
