Space company Astra is set to transition into private ownership through a deal struck with its founders after a disappointing stint on the public market.
Astra’s CEO Chris Kemp and CTO Adam London, who are also the company’s co-founders, have reached an agreement with the board to purchase all outstanding common stock at a rate of 50 cents per share. The transaction is anticipated to be finalized in the second quarter.
Approval for the move towards privatization came from a special committee of the board, with Kemp and London recusing themselves from the decision-making process. This decision follows a reduction in the founders’ initial offer, dropping from $1.50 per share to the current 50 cents. The committee stressed that they viewed this privatization deal as the best course of action to avoid the need for Chapter 7 bankruptcy.
At the time of the announcement, Astra’s stock, previously trading at 85 cents per share, closed at 58 cents per share on Thursday.
With its current market value standing at approximately $13 million, Astra’s worth represents a stark contrast to the $2.6 billion valuation it commanded when it went public through a SPAC three years ago.
Established in 2016 in the San Francisco area, Astra initially set out to revolutionize space travel by mass-producing small rockets and conducting launches frequently, aiming for daily missions.
However, since its debut on the stock market, Astra has only managed to achieve orbit twice, facing setbacks with three failed launch attempts.
Despite diversifying its offerings by acquiring a spacecraft propulsion business, Astra has struggled to generate significant revenue quarterly. Last year, to stay afloat, the company implemented layoffs.
Since announcing its intention to go public, Astra has incurred over $750 million in net losses.
