Blue Origin Misplaces Satellite, Stock Takes a Hit

On Sunday, Blue Origin, the space tech firm founded by Jeff Bezos, accidentally launched a customer’s satellite into the wrong orbit, leading to a significant downturn in its stock value on Monday.

AST Space Mobile, listed on Nasdaq, saw its shares drop nearly 12% in premarket trading, and by midday Monday, they were down around 8% compared to Friday’s closing price.

The Bluebird 7 satellite was launched from Cape Canaveral, Florida, on a New Glenn rocket. However, AST SpaceMobile reported that the satellite did not reach the necessary altitude during its flight.

In a statement, the company stated, “Bluebird 7 was placed into a lower orbit than intended by the upper stage of its launch vehicle. While the satellite is separated from the launch vehicle and turned on, its altitude is too low for its onboard thruster technology to maintain operations, causing it to fall out of orbit.”

Deorbiting refers to the process where a satellite is intentionally removed from its orbit, leading to it burning up in the atmosphere or crashing to the ground, according to NASA.

In response, Blue Origin CEO Dave Limp took to X on Monday, admitting that the company “clearly failed to fulfill the mission our customers wanted.” He also mentioned that one of the rocket’s engines “did not generate enough thrust to reach the target orbit.” Blue Origin is currently spearheading the investigation into this issue, as oversight is critical for learning from this incident and enhancing future operations.

Blue Origin further stated, “The payload has departed from its nominal orbit. We are currently assessing the situation and will provide updates as more information becomes available.” No additional details were provided.

AST Space Mobile did not comment on the situation.

The satellite was intended to offer space-based cellular broadband for smartphones, catering to both commercial and governmental applications.

This incident poses a setback for Bezos, who aims to rival Elon Musk’s SpaceX. Blue Origin has been focused on increasing flight frequency with its New Glenn rocket amid a backlog of launches.

AST had even invited its shareholders to watch the launch live. It began as a celebratory occasion but quickly turned concerning when news emerged that the satellite was incorrectly placed in orbit, casting a shadow over its mission. Analyst Louis DiPalma noted that the mood shifted dramatically, and it was later confirmed that the satellite had been lost.

ACH’s goal of deploying 45 satellites into orbit this year now seems challenging, according to DiPalma.

He suggested that while the stock would likely face pressure, there are still lessons learned from this experience with Blue Origin.

This satellite was supposed to be the eighth launched by AST into low Earth orbit, and the company intends to continue its launch schedule of once or twice a month this year.

In a Monday note, Clear Street analyst Greg Pendy kept a buy rating on the stock but adjusted his year-end price target lower from $137 to $115. Though still a 34% uptick from the last closing price, it’s notably less than the previous 60% forecast. Thankfully, the financial loss from the lost satellite will be covered by the company’s insurance policy.