Firefly Aerospace signs $1.3 billion rocket engine deal with AST SpaceMobile

what happened

Firefly Aerospace has signed a three-year agreement with AST SpaceMobile worth more than $1.3 billion. Under its terms, Firefly will deliver 36 rocket engines, including 27 Miranda engines and nine vacuum-variant Vira engines, for the first three rockets of AST, which is developing its own heavy-lift vehicle. AST will also receive a license to manufacture the engines and engineering support.

Payment will be made in cash and in AST Class A common stock, with the shares subject to various lock-up periods. The companies did not disclose the split between cash and stock. Firefly plans to use the funds to expand hiring, buy materials and equipment, and build infrastructure, including new test bays in Briggs, Texas. According to Dow Jones Newswires, Firefly shares jumped 17% to $17.80 in premarket trading, while AST SpaceMobile rose 5.1% to $31.75.

why it matters

For markets, the deal matters because it gives Firefly extra capital at a time when demand for launches is strong, and it gives AST more control over the timing of its satellite deployments. Part of the payment in AST stock could weigh on supply once the lock-ups end. The exact cash and stock split is not known, so the size of that effect is hard to gauge.

market impact

Firefly Aerospace: a large contract supports the stock; AST SpaceMobile: payment in shares adds dilution risk

• ▲Firefly Aerospace shares pressure up — a large three-year contract and extra funding for production
• ↔AST SpaceMobile shares mixed — more control over launches offset by possible dilution from share payment

tags

instruments