Shares of Astra Space are lower after Kerrisdale Capital said it was short shares of what it calls “a $2.0bn space launch company formed at the peak of the 2021 SPAC bubble.” The company has “no revenue, no track record of reliability, and no established market for its undersized vehicle,” according to Kerrisdale, which calls Astra “yet another example of the questionable businesses going public via SPACs” and argues that the company “faces massive obstacles in its quest to develop a viable business model.” In its report, Kerrisdale goes on to say: “From an execution standpoint, Astra is already exhibiting tell-tale signs of a company that’ll never fulfill its cosmic promises… We’re skeptical that public investors will stick around at the current valuation to underwrite Astra’s tenuous business prospects, and the lock-up expiry of 91m shares tomorrow could result in near-term volatility. As Astra encounters inevitable setbacks, hemorrhaging cash in hopes of developing a rocket that is undersized and lacking demand, its shares valued at the height of the SPAC boom should tumble further to the ground.” In morning trading following the publication of the short report, Astra shares are off earlier lows but remain down 58c, or 7.5%, to $7.13.
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