AST SpaceMobile facing class action lawsuit from investors

May 08, 2024 01:00 PM

The Gross lawfirm has hit AST SpaceMobile with a class action lawsuit, alleging the direct-to-cell satellite operator issued materially false and/or misleading statements.

The complaint alleges AST SpaceMobile failed to disclose information regarding delays to the launch of its five first generation of commercial satellites, Block 1 BlueBird.

SpaceX were initially lined up to launch the satellites in 2023, but this was pushed back to Q1 2024.

AST SpaceMobile have now pushed this back even further, revealing in its latest earnings report on April 1^st 2024 that the satellites wouldn’t arrive at the launch site until July or August of 2024.

“Production of five 700 sq. ft. Block 1 BlueBird satellites was impacted by two suppliers, leading to delays in integration and testing,” the company said in its earnings report.

“In order to accelerate production of our next satellites and reduce dependency on these suppliers, we acquired a non-exclusive and worldwide license to manufacture one of the subsystems, and replaced the supplier of the other subsystem with a new supplier with whom we have completed a new design and now own the IP,” it said.

However Gross allege that AST SpaceMobile failed to disclose the disruption to production and the delay in its completion to investors.

As a result “the Company's five Block 1 BlueBird satellites were not on track to launch in the first quarter of 2024,” it says.

Due to this, Gross says that AST SpaceMobile’s positive statements about it business, operations, and prospects were “materially misleading and/or lacked a reasonable basis.”

Shareholders who purchased shares of AST SpaceMobile between November 14, 2023 to April 1, 2024 have until June 17^th 2024 to register to be a lead plaintiff for the lawsuit.

AST SpaceMobile appointed Andrew Johnson as its new chief legal officer on Monday. AST SpaceMobile said that in his previous role at 3D printing company 3D systems corporation he was responsible for overseeing global legal matters, including corporate securities, contracts, and litigation.

Its shares fell 23.4% following the release of its results and are down over 52% since the start of the year.

AST SpaceMobile did not respond to a request for comment at time of publication.