AST SpaceMobile Selloff Highlights Execution Risks and Dilution Fears Amid Pre-Revenue Reality

What happened

AST SpaceMobile's stock has fallen 26-27% over the past month, driven by investor concerns over execution delays and funding needs, as highlighted in recent SEC filings. The company remains pre-revenue for its core SpaceMobile service, with high cash burn and reliance on equity financing, including a $1 billion convertible raise in February 2026 that exacerbates dilution risks. Despite some revenue growth from non-core sources like government contracts, this does not offset structural vulnerabilities, contrasting with rival Rocket Lab's broader disappointments. Critical near-term catalysts, such as the NG-3 launch by March 2026 and FCC approval for full commercial service, face significant timing and regulatory hurdles. Any further delays could force additional capital raises, compounding shareholder dilution and threatening the commercialization timeline.

Implication

The selloff underscores the market's growing impatience with AST's pre-revenue status and execution risks, which are not adequately priced in at current valuations. Any slippage in the NG-3 launch or FCC approval could trigger further equity raises, eroding per-share value and delaying revenue generation from the core business. While non-core revenue provides minimal cushion, it fails to address the fundamental capital intensity and dilution sensitivity highlighted in filings. Prudent investors should consider reducing exposure or setting strict stop-losses around catalyst dates, such as the March 2026 launch deadline. Long-term holders must reassess management's ability to deliver on aggressive timelines without excessive dilution, as failure could lead to permanent capital impairment.

Thesis delta

The recent selloff reinforces the DeepValue thesis that AST is overvalued due to its pre-revenue state and dependency on timely execution and funding, with no shift in the underlying risks. However, it emphasizes that market sentiment is increasingly sensitive to dilution events and delays, making downside scenarios more probable in the near term.