By Sam Boughedda
AST SpaceMobile Inc (NASDAQ:ASTS) is down more than 7% Thursday after Kerrisdale Capital said it is short the stock questioning the firm's credibility.
AST SpaceMobile is said to be working on a technology that will allow smartphones to connect to satellites internationally.
However, Kerrisdale, best known for short-selling, claims AST SpaceMobile is a $1.8bn satellite company "trying to sell the dream of connecting billions of people with mobile broadband directly to their phones from space, but without a credible ability to bring that dream to reality."
It added that the company's satellite design is "destined to fail," which it believes is unsurprising due to AST management's "uninspiring backgrounds" and a "business case that makes little sense" in almost all aspects.
Kerrisdale also questioned why AST keeps pushing out the projected timeline while its stock has gained significantly in the past few months. In a further scathing assessment, the short-seller said: "AST is an ambitious, wildly risky science project that has no business (literally) being public."