AST SpaceMobile sinks 15% after Blue Origin satellite failure

Shares of AST SpaceMobile fell sharply in premarket trading on Monday after the company disclosed a major setback involving one of its latest satellites, raising concerns about execution risks in the fast-growing space-based broadband race.

The stock dropped more than 15%, after the company confirmed that its BlueBird 7 satellite had been placed into an unusable orbit following its launch aboard a Blue Origin New Glenn rocket.

Satellite failure linked to launch error

The issue occurred during the third mission of Blue Origin’s New Glenn rocket. While the satellite successfully separated from the launch vehicle and powered on, it was placed into an orbit that is too low to sustain operations.

"While the satellite separated from the launch vehicle and powered on, the altitude is too low to sustain operations with its onboard thruster technology and will [be] de-orbited. The cost of the satellite is expected to be recovered under the company's insurance policy," an AST SpaceMobile spokesperson said in a Barron's report.

The failure was attributed to the rocket’s upper stage, which did not fire correctly, leaving the satellite stranded at an insufficient altitude. As a result, BlueBird 7 will be de-orbited, meaning it will burn up in the atmosphere.

Despite the loss of the satellite, AST SpaceMobile said the financial impact is expected to be mitigated through insurance coverage.

Deployment plans remain intact

BlueBird 7 would have been the company’s eighth satellite in low Earth orbit, part of its broader plan to build a space-based cellular broadband network capable of connecting directly to standard smartphones.

The company said it is continuing production through BlueBird 32, with BlueBird 8 to 10 expected to be ready for shipment within approximately 30 days.

AST SpaceMobile reiterated its target of deploying around 45 satellites by the end of 2026, with plans to conduct launches at a pace of one to two per month on average during that year.

Currently, the company has six satellites in orbit and requires between 45 and 60 operational satellites to offer commercial service in northern latitudes.

The setback underscores the complexity of scaling satellite constellations, particularly as companies aim to accelerate deployment timelines.

Competition and execution risks in focus

The incident is a blow not only to AST SpaceMobile but also to Blue Origin as both companies seek to compete with SpaceX and its Starlink Mobile initiative in the emerging satellite-to-device connectivity market.

AST SpaceMobile is racing to establish a 5G-quality global network before rivals scale similar offerings. Amazon is also expected to enter the space, targeting a launch around 2028 following its acquisition of Globalstar, and relying on multiple launch providers, including Blue Origin.

Analysts caution that execution will be critical. "While AST reiterated its year-end target for 45 satellites to be in orbit, it will be challenging to attain this goal. In our view, the quality of service for AST's beta offerings will be a major driver of the company's share price given competition from industry heavyweights," William Blair analyst Louie DiPalma wrote in a research note.

"We continue to believe that many of AST's mobile network operator partners will likely begin customer trials later this year when AST's network reaches approximately 25 satellites," DiPalma added.

The loss of BlueBird 7 highlights the operational risks inherent in satellite deployment, even as AST SpaceMobile maintains that the incident represents only one setback within a broader, ongoing rollout.