In a strategic financial move, Abel Avellan, Chairman and CEO of AST SpaceMobile, Inc., entered into a variable prepaid forward contract on November 20, 2024. This transaction, conducted through a wholly-owned special purpose vehicle (SPV) and with an unaffiliated dealer, represents approximately 3.2% of Mr. Avellan’s total holdings in AST SpaceMobile and less than 1% of the total outstanding Class A common stock as of November 12, 2024. Despite the complexity of the transaction, it is crucial to note that this move did not involve the sale of any shares of AST SpaceMobile’s Class A common stock owned by Mr. Avellan. Rather, it aligns with his financial planning goals while demonstrating his commitment to the company.
The significance of Avellan’s financial maneuver is underscored by the contract’s settlement terms, set for January 2026, contingent on the stock price relative to a forward floor price of $18.24 per share and a cap price of $34.20 per share. The transaction, which is capped at 2.5 million shares, involves the SPV pledging an equivalent number of Common Units as collateral. The SPV also retains an option to settle the contract in cash under specific conditions, preserving ownership of the pledged units. By approving this transaction, AST SpaceMobile’s Board of Directors has allowed Mr. Avellan to both maintain his voting rights over the pledged units and potentially benefit from future stock price appreciation up to the cap price. This deal not only indicates Mr. Avellan’s confidence in the company’s future but also reflects his long-term commitment to enhancing AST SpaceMobile’s mission and vision in the space-based telecommunications sector.
Strategic Financial Planning and Its Implications
Avellan’s variable prepaid forward contract is an intricate financial instrument designed primarily to meet his financial planning needs without diluting his equity position in AST SpaceMobile. While such transactions are relatively common among corporate executives, they usually raise questions regarding the insider’s confidence in the company’s prospects. However, it is clear that Mr. Avellan’s decision was made with a forward-looking perspective aimed at financial prudence rather than a lack of faith in AST SpaceMobile. Retaining his substantial holdings in the company, Avellan has mitigated potential concerns about his commitment to the firm’s long-term success.
The contract terms highlight a balance between risk management and the anticipation of value appreciation. The forward floor and cap prices establish a range within which any financial benefit will accrue to the SPV. By having a cap price, Avellan safeguards against significant value drops, while still positioning himself to gain from moderate stock price increases. The SPV’s option to settle the contract in cash under specific conditions ensures flexibility. These strategic considerations showcase Avellan’s calculated approach to his financial dealings, ensuring that his engagement with AST SpaceMobile remains steadfast and undeterred by short-term market fluctuations.
Confidence in AST SpaceMobile’s Long-Term Vision
Abel Avellan, Chairman and CEO of AST SpaceMobile, Inc., executed a strategic financial maneuver on November 20, 2024, by entering into a variable prepaid forward contract. This transaction was carried out through a wholly-owned special purpose vehicle (SPV) and an unaffiliated dealer, involving around 3.2% of his total holdings in the company and less than 1% of the outstanding Class A common stock as of November 12, 2024. Importantly, this did not involve selling any shares of AST SpaceMobile’s Class A common stock owned by Avellan. Instead, it served his financial planning while underscoring his commitment to AST SpaceMobile.
The contract features terms for settlement in January 2026, based on the stock’s price relative to a floor price of $18.24 per share and a cap price of $34.20 per share. The transaction is capped at 2.5 million shares, with the SPV pledging an equivalent number of Common Units as collateral. The SPV has the option to settle in cash, retaining ownership of the units. AST SpaceMobile’s Board of Directors approved the transaction, enabling Avellan to maintain voting rights and benefit from future stock price gains up to the cap price. This deal reflects Avellan’s confidence in the company’s future and his long-term dedication to enhancing AST SpaceMobile’s mission in space-based telecommunications.
