Why AST SpaceMobile Stock Just Plunged 10%

AST SpaceMobile (ASTS -12.04%) the stock was down 10.5% by 10:10 ET this morning, which — one would think — was actually pretty good news. (And as we’ll see, that may be the problem.)

Overnight, SpaceX successfully launched five AST BlueBird satellites into orbit from the launch pad at Cape Canaveral. Once in orbit, AST says, it will begin providing “nearly 100 percent nationwide coverage from space, with more than 5,600 coverage cells in the United States,” with data download speeds of up to 120 Mbps.

Buy the rumor, sell the news

Of course, this was not unexpected. While it may not quite be a “buy the rumor, sell the news” situation, it is at least a “buy when you think something will happen and sell when it does” kind of event. AST’s BlueBird launch has been on SpaceX’s manifesto for months, and today’s launch was known in advance.

However, it was perhaps the biggest catalyst that lifted AST stock from $2 and change in May to nearly $39 in August. Now that the catalyst has been completed, investors can’t immediately look forward to AST stock, and momentum traders may have decided it’s time to take profits — especially since the odds of AST starting from here to generate significant. the revenue from connecting 5,600 phone calls isn’t great.

Is AST SpaceMobile stock a sell?

Investors selling AST SpaceMobile shares today may be leaving too soon, however. While there are certainly risks that the stock will suffer going forward (due to ongoing stock dilution, for example), consider all the catalysts that still remain to be fulfilled.

These include announcements that the BlueBirds are in orbit and operating as designed, announcements of the first completed calls from the new satellites, and announcements of additional and expanded corporate telecommunications partnerships that will help raise the funds AST needs to to launch even more satellites and expand his business.

All of these are still in AST’s future and all have the potential to raise the stock again.