AST SpaceMobile shares take off after it announces Verizon partnership

The Verizon logo is seen on the 375 Pearl Street building in Manhattan, New York City

NEW YORK (Reuters) - AST SpaceMobile shares jumped more than 70% on Wednesday and hit their highest level since November 2022 after the satellite communication company announced a new direct-to-cellular tie-up with Verizon Communications.

The stock has more than quadrupled since the start of May, and is now up about 50% for the year.

The two companies early Wednesday announced the partnership, which AST SpaceMobile said would allow it to target 100% coverage of the continental United States from space on premium 850 MHz cellular spectrum. Verizon is committing $100 million to the partnership.

Earlier this month, AST SpaceMobile and AT&T announced a deal to deliver space-based broadband network direct to cell phones.

Shares of AST SpaceMobile closed up 69.2% at $9.02 and hit a high for the session of $9.35. Shares of Verizon finished off 0.7% on Wednesday.

Trading volume in AST SpaceMobile also spiked, and exceeded five times the 10-day moving average volume, according to LSEG data.

AST SpaceMobile also topped the trending charts on retail-investor focused social-media forum Stocktwits on Wednesday. The stock's message volumes surged and scored "extremely high" on the platform.

The latest partnership deal "will enhance cellular connectivity in the United States, essentially eliminating dead zones and empowering remote areas of the country with space-based connectivity," Abel Avellan, founder, chairman, and CEO of AST SpaceMobile, said in the announcement.

AST SpaceMobile has also received financial backing from AT&T as well as Alphabet-owned Google and from Vodafone Group this year.

(Reporting by Caroline Valetkevitch and Lance Tupper in New York; Editing by Kirsten Donovan and Daniel Wallis)