Astra CEO Chris Kemp speaks inside the company’s headquarters during Spacetech Day, May 12, 2022.
Manufacturer of spacecraft engines and builder of small rockets Astra It intends to conduct a reverse stock split of 1 to 15, the company disclosed in a securities filing on Monday.
The request said Astra was also seeking to raise up to $65 million through an “on-the-market” placement of ordinary shares.
Astra shares were little changed in after-hours trading, closing at 40 cents a share. The company went public in July 2021 through a SPAC deal, at a valuation of nearly $2 billion, before the stock began to crash after launch failures and development setbacks.
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The reverse stock split is expected to take place on or before October 2, Astra’s filing said, after its board of directors approved the plan on July 6. The company previously scheduled a reverse split as part of its plan to avoid delisting by the Nasdaq.
A reverse split does not affect the fundamentals of the company, as it does not dilute the value of the stock nor change the valuation of the company, but it will raise the share price through the combination of shares. A reverse split can be seen as a sign that a company is in distress and is trying to “artificially” increase its share price, or it can be seen as a way for a viable company with crumbling shares to continue its operations on a public stock exchange. Functionally, the reverse split, often done as 1 for 10, means that a stock worth, say, $3 will become $30 a share.