What happened
Quotes of the American space company Astra Space (ASTR) collapsed by 26% to $3.8 per share. The securities entered the top 10 in terms of trading volume on the SPX Exchange. The price has already dropped by 85% from the historical maximums.

The reason was the failed launch of the first mission. The Rocket 3.3 launch vehicle, the launch of which was repeatedly postponed due to technical problems, launched from the site at Cape Canaveral, Florida, but after 3.5 minutes, communication with the second stage of the engine was lost. The rocket was to put three compact satellites into low Earth orbit.

“We experienced a malfunction during today’s launch, resulting in the payload not being placed into orbit,” Astra Space said in a Twitter post.

What’s next
The launch was part of NASA’s ElaNA 41 mission. The failure is the second for Astra Space since last August, when one of its rocket engines failed during testing about a second after launch.

Investors should be cautious about investing in this company. Astra is not in the best position in the oversaturated small launch vehicle market. Its main competitors will soon be launching larger rockets with payloads over 1000 kg. Astra’s forecast calls for 300 launches a year by 2025, which is 10 times more than SpaceX’s 2021 target. Such an ambitious forecast does not look very plausible at the moment.

A brief analysis of the financial situation shows that even the cash, which was initially noted by the management as sufficient to fully fund the company’s daily launches until 2025, may now only be enough to provide monthly launches until 2023. This means that Astra will almost certainly need additional funds to fulfill its own forecast. The company could either make an additional share issue or increase debt on the back of interest rate hikes.

Astra Space (ASTR) is not recommended for a long-term portfolio at the moment. The shares are suitable only for short-term speculative trading for traders with high risk tolerance.

Refinitiv analysts’ consensus forecast for Astra Space shares is at $7 per share, which is 87% higher than the current price, but it should be noted that only two investment houses are covering the stock. The securities are available for trading under the ticker ASTR on SPX Exchange.