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Claire Yubin Oh & Luke Kawa

AST SpaceMobile drops after announcing new share issuance and plans to raise more debt

AST SpaceMobile is down in premarket trading on Wednesday after the space-based cellular broadband network company announced that it’s refinancing by issuing more shares and raising more debt.

Most notably for shareholders is that these plans include dilution to the tune of about 2 million shares at $78.61 per share, with the proceeds being used to buy out $50 million out of $100 million in senior convertible notes due in 2032, which have a coupon of 4.25%, from their holders.

Separately, the company also announced an offering of convertible senior notes that was quickly upsized to $1 billion, which will have a coupon of 2% and are due in 2036. These notes have an initial conversion price of about $96.30 per share, more than 20% above where shares closed on Tuesday. There’s the potential for an additional $150 million of these notes to be issued.

If the full initial $1 billion of notes were converted to shares, this would notionally add around 10.4 million shares to the company’s shares outstanding (274.6 million as of the latest count, per Bloomberg).

AST SpaceMobile said it would be able to settle conversions of the notes through cash or stock, or a combination thereof, and plans to use the proceeds for general corporate purposes and “funding the deployment of AST SpaceMobile’s worldwide constellation of satellites.”

So, in sum: more shares, more overall debt, the potential for additional shareholder dilution going forward in light of this addition of convertible notes, but less debt in 2032 that had a higher coupon than these new notes.

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Helena Cheng

Lululemon’s stretch getting tested: Stock plunges after after outlook is cut

Lululemon shares are down double digits in premarket trading after the company cut its full-year sales and profit outlook, overshadowing a Q1 beat and raising fresh concerns about the brand’s turnaround efforts.

The company now expects fiscal 2026 revenue to be flat to down 1%, compared with its prior forecast for 2% to 4% growth. Guidance for full-year diluted earnings per share was dragged down to a range of $10.95 to $11.15, below the company’s previous guidance of $12.10 to $12.30 and well below Wall Street’s estimate of $13.26.

Key numbers for Q1:

  • EPS of $1.69 vs. the $1.68 expected.

  • Revenue of $2.47 billion vs. the $2.43 billion expected.

The modest top-line beat masked a widening divergence between Lululemon’s geographic markets. While international revenue rose 22% overall with a 30% increase in Mainland China, the bigger problem remains North America, where revenue fell 5%.

Interim co-CEO and CFO Meghan Frank acknowledged during the earnings call that recent product rollouts underperformed. A highly anticipated yoga campaign failed to generate its expected “halo effect” across broader product lines.

Profitability metrics took a major hit, with gross margins contracting by 410 basis points to 54.2% due to mounting tariff costs and promotional markdowns. Operating income consequently fell 37% year over year to $276.9 million.

“We experienced spikes of negative commentary in the media and on social channels with regard to our brand, which had an impact on traffic and overall top-line performance,” Frank said during the earnings call. “And second, not all of our product launches have met our expectations. While we have had several successful launches so far this year, we have seen others as we start Q2 not generate the anticipated guest response.”

Lululemon’s valuation has already been steadily compressing for years. While it was once one of retail’s richly valued stocks, investors have been questioning whether the company can return to the double-digit growth era.

The results also arrive during a leadership transition. Lululemon announced back in April that former Nike executive Heidi O’Neill is set to take over as CEO in September, with investors looking to her to revive growth in North America and restore the brand’s growth.

As Lululemon faces both macroeconomic pressure and brand-specific challenges, its stock has dropped around 40% year to date.

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Paige Oamek

US job growth skyrocketed in May, blasting past expectations

The US economy added 172,000 jobs in the month of May, the Bureau of Labor Statistics reported Friday, sending 10-year Treasury yields higher.

The strong May job market surprised economists. Experts had predicted only 85,000 new jobs — just half the reported number. The unemployment rate held steady at 4.3%, as expected.

The job growth story is a hopeful spot for the economy as consumers continue to feel inflationary pressure from the Iran war.

Job gains were buoyed by the leisure and hospitality sector, which added 70,000 jobs, as well as local government, healthcare, and education.

Both the March and April jobs reports were revised upward, making them collectively 93,000 higher than previously reported.

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