Space company Astra is set to transition to private ownership in a deal negotiated with its founders, following a disappointing performance in the public market.
Astra’s CEO, Chris Kemp, and CTO, Adam London, who are also co-founders, have reached an agreement with the company’s board to purchase all outstanding common stock at a price of 50 cents per share. The transaction is anticipated to be finalized in the second quarter.
Approval for the privatization plan was granted by a special committee of the board, with Kemp and London abstaining from voting.
The decision to proceed with the buyout came after the founders reduced their initial offer from $1.50 per share to 50 cents. The committee emphasized that, given the circumstances, the privatization was deemed “the only alternative” to potentially filing for Chapter 7 bankruptcy.
Astra’s stock, which was trading at 85 cents per share prior to the announcement, closed at 58 cents per share on Thursday.
The company’s current market valuation stands at approximately $13 million, significantly lower than the $2.6 billion equity valuation it received when going public through a SPAC three years ago.
Founded in the San Francisco area in 2016, Astra initially aimed to streamline the production of small rockets and conduct frequent launches, with aspirations of launching missions on a daily basis.
Since its initial public offering, Astra has successfully achieved orbit with its rockets on two occasions but has also encountered three launch failures.
Following a mission failure in June 2022, Astra’s rocket-launching activities have been temporarily suspended.
Despite diversifying into the spacecraft propulsion sector, the company has struggled to generate significant quarterly revenue and underwent a round of layoffs last year in an effort to sustain operations.
Astra has accumulated net losses exceeding $750 million since announcing its intention to go public.
