Jim Cramer Discusses AST SpaceMobile (ASTS)’s $1 Billion Bonds & Hedge Funds

We recently published 14 Stocks Jim Cramer Discussed As He Shared Insights For Nuclear And Quantum Stocks. AST SpaceMobile, Inc. (NASDAQ:ASTS) is one of the stocks Jim Cramer recently discussed.

AST SpaceMobile, Inc. (NASDAQ:ASTS) is a satellite internet company that enables direct-to-cell communications. It is competing with SpaceX’s Starlink, which is also steadily growing its direct-to-cell coverage. The firm aims to remove coverage gaps with its satellites, but Cramer is concerned about its recent announcement of private convertible bonds worth $1 billion. He called AST SpaceMobile, Inc. (NASDAQ:ASTS) “speculative” in a recent Mad Money appearance. This time, he discussed the convertible offering and shared additional insights about strategies used by hedge funds in such cases:

“And at the same time I’ve got AST SpaceMobile, they do a billion dollar convert, 2.25% coupon. People have to realize, that the hedge funds, they buy the convert they short the common. And they knock the common down. That’s something that happened in 2000.”

Here are Cramer’s previous thoughts about AST SpaceMobile, Inc. (NASDAQ:ASTS):

“Okay, see this is the kind of company, alright, this is what I hate. I know that they filed a big convertible after the close. That is exactly what I’m most afraid of. That’s an equivalent of a big corporate finance. It’s going to push the stock down. That’s what I’m seeing with a lot of this speculative stuff. No, no, no.”

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Disclosure: None. This article is originally published at Insider Monkey.