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Astra Space Faces Class Action Lawsuits

By Doug Messier
Parabolic Arc
February 22, 2022
Filed under , , , , , , , , , , , , , , , , ,
Rocket 3.3 makes a wobbly liftoff from Kodiak Island after losing a first stage engine. (Credit: Space webcast)

by Douglas Messier
Managing Editor

Astra Space, whose first attempt to orbit satellites failed on Feb. 10, is facing class action lawsuits alleging that the small-satellite launch provider and its officers made false and misleading statements about the company’s capabilities. Astra Space went public last July in a merger with Holicity Inc., a blank check special purpose acquisition company.

At least six law firms are seeking clients who lost significant amount of money after purchasing the stock. These include:

  • Kaskela Law LLC — Philadelphia, Pa.
  • Kessler Topaz Meltzer & Check, LLP — Radner, Pa.
  • Law Offices of Howard G. Smith — Bensalem, Pa.
  • Robbins Geller Rudman & Dowd LLP — San Diego
  • Rosen Law Firm — New York
  • Wolf Haldenstein Adler Freeman & Herz LLP — New York

Astra Space has plans to launch satellites up to 300 times per year and bills itself as having the ability to rapidly launch rockets from different ranges. But, those and other claims are false, the Rosen Law Firm alleged in a press release.

According to the lawsuit, defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose: (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. When the true details entered the market, the lawsuit claims that investors suffered damages.

Rosen cited a report, “Astra Space, Inc (ASTR): Headed for Dis-Astra,” published by Kerrisdale Capital in December that raised questions about the company’s claims and ability to deliver on its promises.

Rosen’s lawsuit accused CEO Chris Kemp, CFO Kelyn Brannon and former CFO Steven Ednie of making false and misleading statements. The company denied the claims in a filing with the Securities and Exchange Commission on Feb. 10.

“Astra believes the claims are without merit and Astra, Mr. Kemp and Ms. Brannon will vigorously defend against these claims,” the company said.

Four CubeSats were lost in the failed launch of Rocket 3 from Cape Canaveral Space Force Station in Florida on Feb. 10. Astra succeeded in launching a dummy payload into orbit from Pacific Spaceport Complex — Alaska in November. It was the company’s only successful launch in five attempts.

11 responses to “Astra Space Faces Class Action Lawsuits”

  1. ThomasLMatula says:

    Sad as they seem to a good firm. But publicly traded stock and space startups don’t mix.

  2. Cameron says:

    So far, their reliability has been utterly dismal. Yes, space is hard and all that. But other new launchers are finding their feet much more quickly. Though admittedly the sample size is still small.

  3. Robert G. Oler says:

    press on

  4. Aerospike says:

    I’m sorry, but there is no polite way of saying this: idiotic morons shouldn’t be allowed to invest in industries that they do not understand. Period.

    I’m pretty sure most if not all of the “Space-SPACs” of the last year or so will at some point face similar lawsuits. It is a very young industry that is working with technology that is way more difficult than anything the companies from the bubble were working with.

    I’ve been following Astra since before they came out of stealth (as much as was possible), and while I agree that their claimed capabilities and stated goals have always been one the far end of the credibility spectrum, this is not that unusual in the industry and should of course never be the basis for an investment! (“Launching once per day” yeah right, talk to me about that again once you can reliably and repeatedly launch once a month… )

    Guess @ThomasLMatula is right: space start ups and publicly traded stocks don’t mix.

    • Mark Davis says:

      This is the hazard of chasing easy money by going public. It isn’t necessarily that there are a ton of morons out there investing in space startups without knowing that they are making a long term bet that could take a long time to pay off, but instead that there are tons of predatory law firms and short sellers out there (vampires) that see a good opportunity to attack. This is why Elon has been reluctant to take SpaceX public.

    • ThomasLMatula says:

      I knew Jim Benson who started the first New Space firm, SpaceDev, to be traded on a stock exchange. He had to be very careful with the presentations he made at space conferences or the SEC would take an interest in him. When he died and SpaceDev, including Dream Chaser, were sold to Sierra Nevada they dissolved it for that reason.

    • Jennifer Wolfson says:

      What are you talking about? The presentation that Astra made about their company and plans did not remotely resemble what they did. They WILL have to settle in court. I promise. You’re calling people names very bluntly, and it is YOU who don’t understand what you are talking about. If you did, you would understand that companies that list on NASDAQ are required by law to be honest about forward looking statements.

      We are not supposed to do crazy levels of due diligence to discover that they are lying to us, especially if we are only investing a little bit of money! Seriously, you wanted me to be master of any company to the point where I can tell they are lying to me about what they have and what they can do? Get real.

      I hate people like you who blame victims. It is people like you who are encouraging the next Kemp to think it is reasonable to lie to people.

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