Astra plans reverse stock split, seeks to raise up to $65 million

Manufacturers of spacecraft engines and manufacturers of small rockets astra The company disclosed in its securities that it intends to effect a 1-for-15 reverse stock split archive on Monday.

Astra is also seeking to raise up to $65 million through an “on-the-market” offering of common shares, the filing said.

Shares in Astra were little changed in after-hours trading from their closing price of 40 cents a share. The company went public via a SPAC deal in July 2021 at a valuation of nearly $2 billion, but after a failed listing and development setbacks, the company’s stock price began to plummet.

After its board of directors approves the plan on July 6, the reverse stock split is expected to take place on or before October 2, Astra’s filing said. The company previously outlined a reverse stock split as part of its plan to avoid delisting from the Nasdaq exchange.

A reverse split does not affect the fundamentals of the company because it does not dilute the stock nor change the company’s valuation, but it boosts the stock price through a stock merger. A reverse split can be seen as a sign that a company is struggling and trying to “artificially” boost its stock price, or it can be seen as a way for a vibrant company with a battered stock to continue operating on a public exchange. Functionally, a reverse split (usually done in a 1-for-10 split) means that a $3 stock becomes $30 a share.