Sometimes when you read SEC filings, you encounter a paragraph that makes your eyeballs pop out of your head. This article highlights one such paragraph, a “dirty little secret”.
However, before introducing the “dirty little secret”, it’s worth pointing out a few other eyeball popping tidbits:
(1) Astra stock has performed extremely poorly since it was listed on the NASDAQ. For the 52 week period ending June 30, 2022, the company lost 90% of its value.
(2) Astra as a going concern has a long list of threats and weaknesses and a very short list of strengths and opportunities.
(3) Astra is the target of multiple lawsuits. The following excerpt from one of the lawsuits summarizes their claims made against Astra.
The statements referenced above were materially false and/or misleading because they misrepresented and failed to disclose the following adverse facts pertaining to the Company’s business which were known to Defendants or recklessly disregarded by them. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (1) Astra cannot launch “anywhere”; (2) Astra significantly overstated its addressable market; (3) Astra overstated the effectiveness of its designs and reliability; (4) Astra significantly overstated its plans for diversification and its broadband constellation plan; and (5) as a result, Defendants’ public statements were materially false and/or misleading at all relevant times.The Rosen Law Firm, Class Action Complaint For Violation Of The Federal Securities Laws against Astra, February 9, 2022
(4) Astra financial statements may not be reliable.
We have identified material weaknesses in our internal control over financial reporting and may identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal control, which may result in material misstatements of our financial statements or cause us to fail to meet our periodic reporting obligations. We have identified material weaknesses in our internal control over financial reporting as of and for the years ended December 31, 2021 and 2020. Material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.Astra Space Inc. SEC Form S-1, July 11, 2022
And finally we get to the “dirty little secret”!
(5) Investors have very limited control over the company. Buried deep in the SEC filings of the company is the following eyeball popping commentary –
Shares of our Class B common stock have 10 votes per share, while shares of our Class A common stock have one vote per share. Our Chief Executive Officer and Chief Technology Officer (the “Astra Founders”), collectively, hold all of the issued and outstanding shares of our Class B common stock. Accordingly, the Astra Founders hold approximately seventy-three percent (73%) of the voting power of our capital stock and are able to control matters submitted to our stockholders for approval, including the election of directors, amendments of our organizational documents and any merger, consolidation, sale of all or substantially all of our assets or other major corporate transactions. The Astra Founders may have interests that differ from other investors and may vote in a way with which other investors disagree and which may be adverse to their interests. This concentrated control may have the effect of delaying, preventing or deterring a change in control of the Company, could deprive our stockholders of an opportunity to receive a premium for their capital stock as part of a sale of the Company, and might ultimately affect the market price of shares of our Class A common stock. We cannot predict the impact our dual class structure may have on the stock price of our Class A common stock.Astra Space Inc. SEC Form S-1, July 11, 2022
And the CEO also just happens to be the Chairman of the Board…
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This article will be updated as new information is available.
Additional information for the curious
Astra’s new business plan is… bankruptcy in 2023?
DON’T TELL ANYONE! Astra Space Inc. has a “dirty little secret” buried deep in their SEC filings…
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