In a recent development, Astra Space Inc. co-founders, CEO Chris Kemp and Chief Technology Officer Adam London, have revealed their intentions to privatize the company. The news was first reported by Reuters on March 7.
The small rocket manufacturer has agreed to a buyout at 50 cents per share, which places the company’s valuation at approximately $11.25 million. The transaction is expected to close in the second quarter.
Upon completion of the deal, Astra is expected to be owned by a group of long-term investors, including the co-founders. The company’s shares were down 33% at 57 cents following the announcement.
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Since going public, only two of Astra’s five launches have been successful. One was for the U.S. Space Force and the other for a rideshare mission for the on-orbit servicing company Spaceflight Inc.
The co-founders had previously attempted to acquire the company for $27.8 million, or $1.50 per share, in November. The revised offer price of 50 cents per share is a more than 32% discount on the stock’s closing price on Nov. 8, a day before the original bid was disclosed.
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In October, the company was reportedly considering selling a 51% stake in its in-space propulsion business, among other strategic sale options.
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Given the company’s recent performance, the decision to go private could be seen as a strategic move by the co-founders. Since its public debut, Astra has faced a series of challenges, with only two of its five launches proving successful. The decision to privatize could provide the company with the flexibility it needs to navigate these challenges without the pressure of public scrutiny.
The co-founders’ previous attempt to acquire the company at a higher price indicates their confidence in the company’s potential. Despite the current discounted offer, their continued interest in taking the company private suggests they believe in its long-term prospects.
The move has not been without consequences. The company’s shares took a significant hit following the announcement, indicating investor uncertainty surrounding the decision. As the transaction progresses, it will be interesting to see how the market responds.
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