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AST SpaceMobile hit by Class Action

April 22, 2024

AST SpaceMobile, already suffering criticism for multiple delays and alleged misleading statements to shareholders, has been hit with Class Actions.

The actions will be before the Western District of Texas in the US District Court and before Judge David Counts. AST SpaceMobile is based at Midland, Texas.

AST SpaceMobile, together with its subsidiaries, develops and provides access to a space-based cellular broadband network for smartphones in the US. It has some valuable and important shareholders not least AT&T, Vodafone and Google and has announced 40 partnerships with the likes of Nokia, Japan’s Rakuten, American Tower and Bell Canada and many other national telcos.

The core allegation claims that AST SpaceMobile “overstated satellite production and hiding suppliers’ issues”. Specifically, the claim argues that on April 2nd (following AST’s business update) news about the production delay caused AST’s share price to fall 23.6 per cent, and losing more than $85 million in shareholder value. The claim argues that AST SpaceMobile is in breach of the US Securities & Exchange Act.

On April 1st, AST SpaceMobile announced production delays for five of its important Block 1 BlueBird satellites due to supplier issues. These five satellites are part of a planned 20+ fleet which will girdle the planet and supply ‘direct-to-cell’ connectivity for smart-phones.

The five Block 1 BlueBird craft should be ready for launch this late summer in the July-August period although specific launch dates have yet to be announced.

Other allegations include mention of “securities fraud” while the core action claims that AST SpaceMobile “misled investors about its satellite production and have hidden supplier issues”.

The action cites the company and two of its executives – Abel Avellan CEO and Sean Wallace EVP & CFO – and was filed into the court system on April 17th.

AST SpaceMobile describes itself as “The first and only space-based cellular broadband network for mobile phones. Eliminating coverage gaps to enable billions of people globally to stay connected.”

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