San Francisco, California – Astra, a space company, will undergo a privatization process at a reduced price with its founders after facing challenges as a publicly traded entity. Co-founders Chris Kemp and Adam London, who serve as CEO and CTO, respectively, have reached an agreement with the company’s board to purchase all outstanding common stock at 50 cents per share. The deal is anticipated to be finalized in the second quarter.
A special committee of the board, with Kemp and London abstaining from the decision-making process, voted in favor of the take-private proposal. Following a reduction in the founders’ offer from $1.50 per share to 50 cents, the board’s committee highlighted that they view this deal as “the only alternative” to avoid filing for Chapter 7 bankruptcy. The company’s stock, which was halted at 85 cents per share at the time of the announcement, closed at 58 cents per share on Thursday.
Astra, established in 2016 in the San Francisco area, originally aimed to mass produce small rockets and conduct launches on a daily basis. Despite the company’s initial ambition, since going public via a SPAC three years ago at a $2.6 billion equity valuation, Astra has only managed to successfully launch rockets into orbit twice while experiencing three launch failures.
Due to a mission failure in June 2022, Astra’s rocket-launching operations have experienced a pause. Despite acquiring a spacecraft propulsion business, the company struggled to generate significant quarterly revenue, resulting in layoffs conducted last year as part of their survival strategy. With more than $750 million in net losses recorded since announcing its plans to go public, Astra has faced significant challenges in its journey as a publicly traded entity.