Astra Space Ends Public Trading Era, Goes Private in Deal with Founders

Astra Space has concluded its tenure as a publicly traded company as on July 18, the company finalized a deal that takes it private, marking the end of more than three years on the public market. This transition follows a challenging period marked by financial struggles and a drastic decline in stock value.

The company announced before the markets opened that it had closed a deal, previously revealed earlier this year, with Astra's co-founders Chris Kemp and Adam London. The agreement was finalized at 50 cents per share, a slight dip from the 53.9 cents closing price on July 17.

Astra's Journey

Astra's journey as a public entity began in July 2021 when it went public through a merger with Holicity, a special purpose acquisition company (SPAC). SPAC mergers provided an alternative route to the traditional initial public offering (IPO) process, offering a quicker path to public markets. However, the market's enthusiasm for SPAC mergers waned over time, and Astra was not spared from this trend.

When adjusted for reverse stock splits, Astra’s shares have plummeted by more than 99% from their peak following the initial public offering. The company, once valued at several billion dollars, saw its market capitalization shrink to approximately $12 million.

Go Private Or Bankrupt

Facing severe cash shortages, Astra considered filing for bankruptcy multiple times in recent months. The company's board ultimately decided to accept the deal proposed by Kemp and London, even after the per-share price was reduced by two-thirds.

A committee from the board determined that the only alternative to the deal was a bankruptcy filing, which would likely lead to the company's liquidation.

Rocket 3 Failure

Astra entered the public market with ambitious plans to provide high-frequency, low-cost launches of small satellites using its Rocket 3 vehicle. Unfortunately, Rocket 3 only achieved two successful orbital launches out of seven attempts. Following a failure during a NASA mission in June 2022, the company decided to retire Rocket 3.

Rocket 4 Plan

Plans to develop a larger vehicle, Rocket 4, have been hampered by Astra’s financial difficulties. The company has managed to generate modest revenue from sales of electric propulsion systems, leveraging a design from Apollo Fusion, which Astra acquired in 2021.

The announcement of the privatization deal did not provide much insight into Astra’s future plans or how the company will finance them.

At the June 15 premiere of "Wild, Wild Space" in Washington—a documentary featuring Astra alongside Planet and Rocket Lab—Kemp mentioned he had raised a significant amount of money to facilitate the privatization but did not disclose specific details.

“The team is super excited to, as a private company, just put our heads down, get focused on putting Rocket 4 back on the pad...Hopefully that will be a much more successful flight.” - Chris Kemp, Astra Co-Founder

As Astra transitions back to a private entity, the company faces the challenge of stabilizing its financial footing and reviving its launch program. The path forward will be closely watched by the industry and investors alike, as Astra aims to fulfill its original vision in a new chapter.