Struggling Space Company Astra Founders Offer to Take the Company Private
The founders of the flailing space company Astra have made a bold move to take the company private at a value of about $30 million. This announcement comes after a series of setbacks for the company, including a failed mission in June 2022 and a cash shortage.
The proposal to acquire all outstanding stock at $1.50 a share, which represents a 103% premium to Wednesday’s closing price at 74 cents a share, was delivered to the Astra board of directors by Chris Kemp, chairman and CEO, and Adam London, chief technology officer.
Astra’s rocket launching business has been on hiatus since the mission failure in June 2022, and the company is running out of cash. In a bid to stay afloat, Astra made the decision to cut 25% of its workforce in early August, shifting focus from rocket development to spacecraft engine production.
Adding to the company’s financial woes, Astra’s cash reserve recently fell below $10.5 million, leading to a default on a debt raise; however, the company managed to raise financing from a pair of investors to pay off the outstanding debt.
Following a SPAC merger at a $2.6 billion valuation in February 2021, Astra has struggled to live up to its promise of cheaply and rapidly producing small rockets. While the company successfully reached orbit twice after going public, it has suffered three launch failures.
With the founders proposing to take the company private, Astra’s future remains uncertain. The offer, if approved, would mark a significant turning point for the struggling space company.