Latest / AST SpaceMobile Podcast / Kook's Weekly - November 3

Transcript

Kook's Weekly - November 3 · AST SpaceMobile Podcast

0:07
This is the AST Space Mobile podcast and we.
0:11
Just basically come the phone be seamless regardless of where you
0:15
are. We don't want the user even to
0:16
know that it's connected by satellite.
0:21
Listen, the opportunity that we have is very, very, very large.
0:28
OK. Good evening, everyone.
0:29
Thanks for joining. Busy week with sports.
0:33
And SO the prophecy just said that a team that wore blue had
0:38
to win for ASTS to go to 1000. So we kind of wrapped up either
0:43
way, which is really the great news.
0:45
So now I'm pretty exhausted from all that baseball.
0:48
And then looking at the weekly, clearly this company did not
0:52
take the week off. They basically celebrated
0:55
baseball. These guys were pumping.
0:59
So the first thing that Bear is mentioning is we have earnings
1:04
next Monday at 5:00 PM Eastern. Eagle eyed people notice that
1:10
they pulled this up a little bit.
1:11
Generally pulling things up is a good thing, means they're trying
1:16
to get some news out. I can only speculate what that
1:21
might be. You know, if people are
1:25
thinking, hey, Kook, do you want to speculate a little bit more
1:28
specifically? I would think maybe Golden Dome,
1:33
I'm just trying to think of anything else that might merit
1:36
pulling earnings forward. But that's really just the hope
1:39
of me speaking near term terms of operational excellence.
1:45
ISRO which is our next rocket had a successful launch
1:51
yesterday, very exciting news. Good to see those rockets just
1:56
continue to go up accurately really.
2:00
And we are slated essentially for the first two weeks of
2:04
December. And so that will be here before
2:06
you know it. And in the meantime, you know,
2:09
all eyes are really on FM 2. Before that earlier in the week
2:15
we had some very technical news around the three GPP standards.
2:21
And so this is the type of thing I normally would have frankly
2:25
missed and you know, pretty technical stuff.
2:33
But when you kind of dig deeper and I linked out quite a few
2:38
pieces of analysis, the the support of three GPP means that
2:43
all chipsets are going to support our spectrum.
2:46
So this goes hand in hand with the idea of working on
2:49
unmodified devices. When you see the rumoured
2:55
headlines, you know, whatever you want to call it from kind of
2:59
these Apple SpaceX headlines, to me, those headlines have always
3:03
really been posts of failure. And so it's quite ironic where
3:07
journalists will pick up on these headlines and go, oh wow,
3:10
Apple's working with SpaceX. You know, that's really kind of
3:14
the same thing as saying, you know, oh wow, the tow truck came
3:18
to pick up the busted car. That's not a good thing.
3:22
You know, thinking of those headlines as really
3:25
acknowledgement that they had to call roadside assistance.
3:28
And we saw that first hand when we we could get some expert
3:33
calls from T-Mobile where they talked about the thousands and
3:36
thousands of hours of engineering required to get the
3:39
SpaceX thing to work at all. And you know, that's the
3:47
problem. You have a backward compatible
3:48
system. So here ESTs is really, they're
3:52
just so far ahead of it. You know, they've really built
3:56
this company with first principles and part of those
3:58
first principles has always been a standards based company and
4:03
without, you know, I'm certainly not an expert on this, but I've
4:05
posted some things that I think it was Peter Linmark posted that
4:08
were kind of a grot conversation that talks about this.
4:11
We have Kevin, as always with some really good analysis.
4:16
His point just being the Block 1 and Block 2 are already going to
4:19
be supported with all chipsets because of its low band
4:23
spectrum. And then going forward when we
4:26
have block 3, which is going to be our mid band spectrum, those
4:29
spectrums will will be supported by new phones, which is which is
4:34
important. SpaceX, for example, you know,
4:37
still has to be incorporated in all the chipsets.
4:40
We're already wired because we're standards based.
4:43
But I wanted to point to 1 post from Elena Niera, who's I
4:46
actually forget what she does. Maybe she's at MIT.
4:50
I don't know what she does for a living, but she's she's a kind
4:52
of an industry. She an actual industry expert,
4:55
not, you know, not an idiot like Tim.
4:58
And her quote I think sums it up quote having a three GPP
5:02
compliance stack and running on globally harmonized spectrum
5:06
opens the door to connect to the billions of smartphones with
5:09
those specifications. Adherence to standards wins the
5:13
day one time after another. And she was retweeting AST space
5:18
mobiles announcement to this effect.
5:21
And so I do think that this is one of those announcements that
5:23
the market would generally miss. I I would certainly miss it had
5:26
I not been beat over the head by this cat that we have living
5:32
with us called Catsy that taught me all these things.
5:35
And so the company is putting out a press release like that
5:38
because industry will understand it.
5:41
And it's also a nod to space mob of a really knowing that we are
5:44
standards based and that puts us in a very different camp from
5:48
all of the other competitors, puts us in a different Cam from
5:52
Iridium, SpaceX, the whole gamut.
5:55
And it really just goes to being again, first principles base
5:58
company. So for most people, again, this
6:03
3 GPP press release wasn't very exciting and the company knows
6:06
that. So then they said, OK, fine
6:08
guys, we'll give you some, some MNO contracts.
6:11
And so this STC deal, Saudi Telecom Group, wow, you know,
6:17
these are grown up dollar amounts now.
6:19
These prepayments are now $175,000,000, just jaw-dropping
6:27
dollar amounts. And this is going to be all
6:30
across the Middle East. So it's not just Saudi Arabia.
6:34
And it just goes to show that this will be a global
6:37
phenomenon. And the dollar amounts I think
6:40
are just simply stunning. And so let's dig in a little bit
6:43
more to that. As part of the announcement, STC
6:47
was required by the Saudi Stock Exchange to actually press
6:52
release what the contract value might be.
6:55
And so in the disclosure, it says the contract value may
6:58
exceed 9% of St. CS revenues as per the audited
7:01
financial statements for the year 2024.
7:04
Well, so that's an estimate, but there's a chance it does exceed
7:09
that virtual, which is why they had to disclose it.
7:13
That's $1.8 billion over the 10 year term.
7:21
Consensus numbers are going higher.
7:23
If these numbers turn out to be true, that's simple as that.
7:27
And so these are really big numbers and Saudi's not a really
7:31
big country. And so then when you start to
7:33
think about the impact as we roll out across North America,
7:38
Central and South America, all of Europe, Africa, Asia X China,
7:43
you can start to see where this is going.
7:45
And this does not include things like the government deals until
7:50
we also have had some good hatch biz by only 6 inches.
7:55
He pointed out that the maps that ASTS discloses which Orange
8:00
show kind of where, where we're going to be over the summer.
8:05
Algeria, Algeria, Oman and Kuwait lit up over the summer.
8:12
And so that was probably then, you know, now in hindsight, A
8:16
telltale that the STC deal was advancing and, and going firm.
8:20
So more countries and when you, you know, I just want to repeat
8:24
this point over and over again. As you lock in more countries
8:29
and get the dominant M and OS in those countries, you you
8:33
reinforce your competitive advantage in terms of your Moat.
8:38
Every time you take down a big swath of geography, you
8:42
effectively render any competing constellation less economic than
8:47
the day before. And these constellations require
8:50
such large amounts of capital, never mind the engineering
8:53
complexity and things like that, but they're based on
8:55
utilization. If you can only monetize your
9:00
constellation over a small sliver of the world, the math
9:04
just simply does not work. And that's why I believe that
9:07
this is a winner taste take most market and we we're seeing a
9:11
very, you know, quickly clarifying picture on the market
9:18
of who is going to be the winner that's going to take most.
9:21
There's a little bit of a misperception in the market that
9:24
some sliver will be remaining for AST space mobile.
9:27
When people say, hey, there's there's room for more than one
9:29
player. I've been pretty consistent
9:31
flipping that around and thinking that it's really
9:36
SpaceX, it's going to be lucky to be the distant second when it
9:40
comes to to this market. And each day it shows that that
9:43
assertion is looking more and more correct.
9:46
So what's interesting too about these deals is ASTS gets, you
9:50
know, again can the continued benefit of being a spectrum
9:55
holding company. And so earlier this, it was a
9:59
couple of years ago, STC was bidding on 60 megahertz of
10:03
spectrum in Saudi Arabia and was awarded it.
10:06
And so this is likely going to be leased to AST Space Mobile.
10:09
And so while the company doesn't have the spectrum directly, it's
10:13
becoming, you know, effectively gifted all this spectrum around
10:16
the world. And that's where I think the
10:18
market's going to come to realize is that almost, I mean,
10:22
if you were to think of like a distant analogue of when the
10:25
world let's us use Saudi Arabia, for example, when the world
10:28
started to find huge oil deposits, you know, effectively
10:31
the way to capture the value of that oil was to own all the
10:35
refineries in the retail distribution in the markets
10:37
where there was demand. That's how the Seven Sisters,
10:40
the the oil dominant oil companies of the time really
10:43
monetized. The oil itself was just kept
10:45
really low as a as a way to frankly screw countries like
10:48
Saudi Arabia. And the money was basically
10:50
shifted downstream. And so here the spectrum, it
10:54
doesn't have a whole lot of value presently because people
10:57
can't use it. So here comes ASTS walking along
11:00
and now just like that cheap oil, ASTS is basically the thing
11:04
that allows that spectrum to access market and they're
11:07
capturing as we can see this STC deal a huge amount of the
11:11
economics. It's a very exciting, it's a
11:13
very exciting time to be alive first, first of all, but it's a
11:16
very exciting development to see this thesis come true.
11:21
If this spaces is not enough for you, linking out and pay a man's
11:26
other space where he talked about this dynamic as well.
11:32
We had a Big Bang this week with NVIDIA giving Nokia a billion
11:37
dollars to accelerate the development of 5G and 6G RAN
11:42
software to run Nvidia's architecture.
11:45
This is really again proof point of where I think the puck is
11:48
going. I've always thought that AST
11:49
Space Mobile is going to be an AI edge company.
11:52
It's just the logical continuation.
11:55
And you know, as I actually just kind of think about it more
11:57
broadly, I, I was reading Transhumanica's whatever it was
12:03
X letter the other day about Kraken, which is just
12:06
interesting thesis in its own right.
12:08
And if nothing else, it's absolutely hysterical that
12:11
there's a group of investors called crackheads.
12:12
And so, yeah, you almost have to buy that stock just so you can
12:16
say you're a crackhead. And, and maybe one day it'll be
12:18
the crack report in addition to the kook report.
12:21
But that notwithstanding, what I found to be just really
12:23
interesting it well, it's Transhumanica the guy future
12:27
plan. If you know him, some of these
12:29
OG guys like me, you know him from the dark days five years
12:32
ago. He's a he's a very gifted
12:34
thinker and very interesting perspective on these really big
12:39
secular winters. I don't actually know his
12:41
background. He's always been kind of like a
12:43
Mystic to me, like a like a sage wise man on a foggy hill.
12:48
I would go to visit with from time to time to figure out if I
12:50
was insane for owning ASTS. But his preface on his whole
12:55
thesis around cracking was really this idea of like the
12:57
narrative drive in the market. And so whether it's, you know,
13:01
AI narrative simple enough that we all knew it, you know, shame
13:04
on me for not spending a week just to dissect the value chain
13:08
of AI kind of methodically and go, well, OK, yeah, so people
13:12
are going to buy all these chips.
13:14
Really shame on me because I'm AVC and we saw AI and ML coming
13:17
from a mile away. And I actually understood
13:19
NVIDIA. But then they're gonna buy all
13:21
these chips. OK, that's simple enough.
13:23
Oh, they're gonna need all this power.
13:24
They're gonna need all these racks, all these things.
13:27
It was, you know, one, one of the guys in the space mob, can't
13:32
remember if it's asymmetric or it was another guy, but he owned
13:35
this thing, Tssi. He was posting about it, sharing
13:38
all his work. And it was like 100 bag.
13:40
There's a pretty simple thesis. I don't know if it's the world's
13:42
greatest company has one customer really with Dell, but I
13:45
mean, 100 X, it's pretty, pretty cool.
13:49
And you had to understand the narrative.
13:50
And then you look at DRAM prices.
13:52
Well, guess what? You build up a bunch of data
13:54
centers and DRAM becomes, you know, the world's most valuable
13:58
commodity. And so going back to this
14:02
narrative idea, kind of, if I, if I think a little bit like
14:04
Transhumanica, I try to, to be a smarter guy.
14:09
They're building a lot of AI stuff.
14:10
And even Elon talks about what his view is of the future of the
14:15
phone, which is that we'll have a device.
14:17
He, he calls it, you know, the thing formerly known as a phone,
14:21
but it really relies on what we know, shocker connectivity, just
14:24
like everything else. And so this narrative of you
14:27
build out so much inference capacity, the next obvious thing
14:31
once you power it is making sure people can actually access it.
14:36
And that's where I think we're about to have kind of warp speed
14:40
hit us in the next year when the market realizes that ASTS is at
14:45
the center of all of this. I think ASTS already recognizes
14:48
this, recognizes that and I think that it's strategic
14:51
partners recognize that. But when the stock market
14:53
recognizes that, that's where I think we get blast off to our
14:58
Palantir type multiple on huge revenues.
15:02
And so, you know, you need both of those things, big absolute
15:05
dollar amounts of revenues and then, you know, really helps the
15:09
old bank account if you can trade it 102 hundred times
15:12
earnings or I'm sorry, sales that that's what you want.
15:16
And seeing industry confirmation of this each day just, you know,
15:23
helps people stay at the path. Even though recently the stock,
15:27
you know, the stock corrections have been quite shallow and, you
15:30
know, hasn't maybe required as much resolve in the past.
15:33
But yeah, I'll move from $102.00 to 67.
15:36
We'll certainly wake you up. And that's why it's good to, to
15:39
remember what the narrative is in the market.
15:41
And then all the microeconomic parts of the thesis that allow
15:45
you to contextualize the narrative and make sure like,
15:48
OK, I get the bigger picture, but do I also get the small
15:50
picture of, of why this security or this, you know, this, the
15:53
security behind this company is going to make sense.
15:57
And that's, you know, the, the two parts of investing that I
16:01
think are necessary and very difficult.
16:03
Cause a lot of people are good at 1:00, but not the other, you
16:05
know, good at the narrative, a bad at the security selection or
16:09
people are really good at, you know, looking at companies, but
16:11
sort of miss the force for the trees in terms of the market
16:14
narrative. So then we also have more news
16:19
coming out of Satco. And so Peter Lemark shared a
16:24
interview by Daniel Thomas, who's the commercial lead of
16:27
Vodafone's space. This is space adventure, head of
16:32
sales and commercial of Satco. And so he's saying that they're
16:35
going to have EU coverage by the end of 2026.
16:39
You know, pretty exciting, especially when you look at
16:42
what's happened to Sacco of getting all these other M and
16:45
OS. And so that's where you go.
16:48
You know, we've talked about this at length.
16:49
You go from getting the dominant M&O in the market to lock up,
16:52
you know, 35% of the market share.
16:55
And then, you know, the real thing that that I certainly had
16:58
never anticipated was that you start to get the number 2 or #2
17:03
and the long tail to all work together.
17:07
And that's what happened in the US with AT&T and Verizon, which
17:10
was certainly incredible. And it looks like the same
17:13
thing's going to happen in Europe.
17:16
Very unclear if it will happen in Japan.
17:17
It almost seems like there's too much honor among the old legacy
17:20
companies to throw a bone to Rakuten, But we'll see.
17:24
So the sell side's also, you know, tracking the progress.
17:28
And so Bank of America was out really fast to talk about the
17:32
new agreement with SDC Group. They increased their target
17:36
price from 85 to 85 from 80. You know, which again, sell side
17:42
target prices are pretty stupid and so I would pay them a whole
17:46
lot of attention. They kind of track, you know,
17:48
track what the stock price is and what you want to read is the
17:53
qualitative part 'cause they're going to be good at putting
17:55
together the broader observations and that's what you
18:00
want to keep track of. There's going to be very few
18:03
sell side analysts other than, you know, crazy guys like Red
18:06
Drum that put out, you know, a $1500 target price.
18:10
Those are frankly the guys you really want to pay attention to
18:14
because they're going to show you sort of the, the bigger
18:17
picture, almost like what Kathy Woods used to do, except she
18:20
would, you know, basically give you that advice publicly.
18:26
Guys like Reggie, I'm are much smarter than Kathy and are able
18:29
to zoom out and see the bigger picture.
18:31
Sell side's not going to generally do that for you.
18:33
So you have to read it more carefully and extrapolate in
18:35
your own, in your own mind of what's going to happen.
18:40
We also have had, oh, I've got deviation from at Dunwall's one
18:46
pointing out that Bank of America is 2026 revenue forecast
18:51
is just $232 million for the company and STC alone looks like
18:58
it's going to be about $200 million a year.
19:01
So that's good news. The way a stock is generally
19:07
going to travel is if revenue revisions are are going up, your
19:12
stock is going to go up. Stocks are generally going to
19:15
follow revisions. And so if you can start to track
19:18
forward estimates that are far in excess of what this the sell
19:21
side is projecting, you are generally going to be on the
19:25
right side of history. And especially on a company like
19:30
ASTS the the uncertainty interval of forward revenue is
19:36
very high. It's a new company, you know,
19:38
there's a lot to be seen and so the sell side's just going to
19:42
kind of sit there with the numbers that seem high when the
19:44
the current revenue is 0 projecting out quarter of a
19:47
billion dollars is certainly, you know, something I just saw
19:53
in the comments that someone let me see if it's not working.
20:04
I'll be really frustrated if if I've just been speaking to
20:06
myself for the past. Period of time, I'll keep going
20:13
if people could just respond in the comments if it's working.
20:18
We also had William Blair talking about the company as
20:22
well. And again, just more eyes
20:25
looking at the STC deal and paying attention.
20:29
It was pretty funny where the short account, Pivotal Capital
20:33
kind of made the assertation that it was a fake contract.
20:36
He said, yeah, definitely a real contract.
20:38
I mean, OK, WTF doesn't require a whole lot of research to
20:41
figure out the St. CS real company.
20:43
And you had press releases on two different exchanges and
20:47
photographic pictures of executive shaking hands.
20:50
And so it's again, just shows how poorly informed the market
20:57
is. And I get it, you know, AUS
20:59
company all of a sudden announcing some big deal in
21:02
Saudi Arabia, Someone could go, I don't know, kind of far away.
21:05
But as the credibility factor goes up, I don't know why ASTS
21:09
would be viewed as credible. But humor maybe for a second as
21:13
people, as people catch up to the progress of the company,
21:19
then all of a sudden down the line, they're going to see, you
21:21
know, $200 million a year of revenue, FTC and that.
21:25
And that's just going to get dialed in and no one's getting
21:27
to question it. It's like someone all of a
21:29
sudden being like, well, you know, Exxon has $3 billion of
21:33
revenue in Papua New Guinea and that's kind of a sketch country.
21:37
You know, give me a break. 0 people on earth are doing that
21:42
when looking at Exxon. Zero people are parsing the
21:44
revenue of Facebook and Microsoft like that.
21:48
And so it all matters. And ASTS is going to be a
21:50
company on the same. I'm going to say it's going to
21:53
be the big Exxon, but it, it frankly might be, but I think
21:57
it's going to be the same kind of leading NASDAQ company as any
22:00
other leading NASDAQ company. And so these revenues in fact,
22:05
are going to be viewed as a business that was able to scale
22:09
internationally unlike really anything before.
22:13
I'm, I'm trying to think of a business that was able to scale
22:16
so well internationally. And, and it's very difficult,
22:20
obviously some of the digital businesses, but even them, like
22:23
I forget how long it took Facebook to actually scale
22:25
outside the US. And so ASTS is really paving a
22:28
new, a new dynamic. And if that weren't enough, so
22:33
we had three GPP standards, we had a big Saudi deal.
22:38
And you know, it's like, could these guys space out news
22:41
releases a little bit more? But then we also had a
22:45
successful test of the IoT market with a company called
22:49
Beware Holdings. Now Beware is a legit teeny
22:52
company. And so I spent actually the day
22:54
I was driving up to a football game and was listening to some
22:57
calls from Beware just to educate myself.
22:59
And I, I don't have a view really of that company, but it
23:02
is interesting that they were getting just standard cell phone
23:05
chips to work well as asset tracks.
23:07
And that's a, that's a big market.
23:10
I've seen some of this stuff before the VC market where
23:12
companies are doing this and they're really just reselling
23:16
MNO spectrum as far as I'm concerned, just take a sip of my
23:18
coffee. And so I don't know that the
23:21
asset tracker companies are that interested really what the
23:25
competitive advantage is going to be.
23:27
But powering the tracker is a big deal.
23:31
And So what I've also posted here and so on my original DD,
23:36
they just showed some of the ways in which the existing
23:40
satellite market worked. And so Global Star, for example,
23:44
has an asset tracker. This sensor cost $350.00.
23:49
It's pretty big and you get 1 message per day and you're
23:53
paying $9 per month. If you want unlimited messages,
23:58
that fee is $35 per month. Think about that for a second.
24:04
So these the existing market is really just a narrow band.
24:09
So just simple messaging that's going to give you, you know
24:12
where, where is the tracker and some other sort of telemetry
24:16
data around it. So really not that intensive in
24:19
terms of bandwidth. And so when you think about the
24:21
capacity of a constellation like ASTS, handling asset trackers is
24:27
going to be easy. Business not really take up any
24:31
capacity. If people are otherwise having
24:33
to spend $350.00 for a tracker and then spending, you know,
24:36
even at the low end $10 a month, there's really not a lot of
24:41
reasons why a lot of packages and a lot of assets that are
24:44
moving around the world are not going to be using an asset
24:47
track. It's a it's a real big enabler.
24:51
And to see this press release immediately with a small little
24:56
company muse is always something that the AT and TS and Verizon's
24:59
were going to roll out again. They're in the business of
25:01
leveraging their networks seven ways till Sunday and all of a
25:06
sudden selling a ton of this to the Fedexes and UPS of the world
25:10
or any container that's moving around.
25:13
There's a big market here. If all of a sudden you're able
25:15
to sell a tracker for you know, a couple dollars and then have,
25:22
you know, again, I don't know, unlimited messages for again, a
25:26
couple dollars. I would just point out when,
25:31
when we're thinking about this, generally people are looking at
25:34
it as there's, you know, 300 million people in the US and we
25:38
have 66% market share, there's 200 million.
25:40
What's the ARPU going to be when you start to think of your real
25:44
customer is device not human being?
25:47
The number of devices could be a huge multiple of the number of
25:53
people. And so that's where this ARPU
25:55
concept can go all over the place 'cause, you know, the
25:59
average revenue per device is, is really what's going to
26:02
operate. And then what I think people are
26:04
going to miss is that there are way more devices than human
26:08
beings in the world. So our Tam is not 7 billion
26:11
people, it's going to be more like 50 billion things.
26:17
Big market, pretty excited. And so I have some others market
26:20
slides that I had done originally in my DD.
26:22
This is your showing, you know what it looked like for Iridium
26:26
and Global Star And the DDDIOT market was expected to reach $10
26:31
billion a year, really driven also by connected cars.
26:36
I think that this market is going to explode higher and why
26:40
is that when you're no longer constrained by old tech like
26:44
narrow band crap from Global Star and Iridium, that's super
26:47
expensive all of a sudden when the cost of that is potentially
26:52
1% of what it currently is, the device count is going to
27:00
explode. And so sure, then someone could
27:03
say, well, how are they calculating that addressable
27:05
revenue number? You know, 'cause obviously if
27:07
I'm saying the the price is going to go down by, you know,
27:09
potentially 99%, then you know, the dollar size of the market
27:13
might go down. But my strong suspicion is that
27:16
the unit count in prior estimates was, was pretty small.
27:21
And for example as well, utilities.
27:24
And so nevermind automotive, where there's a whole lot of
27:28
reasons to have every car have an activity like this.
27:32
Utilities have 500 million devices installed with smart
27:37
meters, energy grids, all of their assets, things like that.
27:42
Saudi Aramco, we, we always thought that there was going to
27:45
be a contract with Aramco because the old head of Rakatin
27:50
went to go be the CEO of Saudi Aramco's tech group.
27:54
There could be really is no limit effectively to the device
28:00
count that would be applicable to this.
28:03
And that's where these revenue numbers out of left field go
28:06
crazy. And especially because these
28:07
devices where they need to be tracked are usually where people
28:10
are not. And so when people do the
28:12
analysis and they go, well, most people live in only like 2% of
28:15
the land mass, therefore, there's no demand for these
28:18
systems. Well, yeah.
28:19
OK. Go to marinetraffic.com, which
28:22
which I always kind of found was cool.
28:25
I like to attract boats. And if you zoom out, one time I
28:28
was showing my kids, you know, just marine traffic.
28:30
And you zoom out and you look at all the boats around the world,
28:32
and it's just wild. Just, you know, just take a step
28:35
back if you're not burdened by knowledge like I am.
28:38
Right. I understand, You know how the
28:39
world works pretty well. I look at that and I'm like, Oh
28:42
yeah, of course. You know, that's the the China
28:43
Europe trade into Rotterdam, of course.
28:45
Like why are we even seconding us that?
28:46
And like, Oh yeah, of course Panama Canal.
28:49
But if you just kind of simplify and you go like, look at these
28:51
boats everywhere. I mean, it's just incredible to
28:53
watch just the flow of things. You know, those things are where
28:58
people are not and those things need to be tracked.
29:01
Those things want like want connectivity.
29:03
And those things then are actually very easy to service
29:07
from a constellation because that's where we actually have
29:09
our latent capacity. Basically anything we're selling
29:12
in those markets is just cream versus what you would have
29:15
underwritten as your base economic model thinking about
29:20
consumer, you know, dead zones and things like that.
29:23
And and that's just really again, you know, stepping back
29:28
in terms of how difficult it is to model the revenues of the
29:31
company until, you know, we'll give the sell side a pass on
29:34
this. But you know, one way to do it,
29:38
which I've done is look at what the GB capacity is of the
29:41
satellite and try to put numbers on that.
29:43
But then as I said, I think it was one or two weeks ago, you
29:47
really then need to realize the ability to oversell that
29:50
capacity is probably, you know, something on the order of
29:53
5/10/20 to 50X. And so you have to think about
29:58
the concurrency of, of usage and you know, like an asset tracker
30:02
is, is not going to use a lot of data, but you're going to be
30:06
able to charge, you know, a couple bucks a month, just like
30:09
you would charge a user. I'm not always going to be using
30:11
my phone. My car is not always going to be
30:13
connected because it's, you know, a car, for example, is in
30:15
the garage 95% of the time, not necessarily using a lot of data,
30:19
but you're going to be charging 15 bucks a month.
30:21
I think I just re up my Toyota package with AT&T, which I think
30:25
is 15 bucks a month for connectivity to my car.
30:28
Now there's a good example of your ARPU until, you know, just
30:32
me sitting in my house. I have 5 phones, I have two
30:37
phones, wife has one, kids both have watches.
30:40
So it's 5 devices. All my cars are connected, you
30:44
know, easily, you know, especially the Fast forward, you
30:49
know, with, with new innovations that will come up.
30:51
If I had a dog, I would definitely have my dog wired
30:53
with ASTS based mobile. I mean, Can you imagine them
30:55
losing their dog? No way.
30:56
People are definitely going to pay for that.
30:57
You could easily see a generic American family having 10 to 20
31:01
devices connected to something like this.
31:03
And you know, all these little things, 10 bucks a month, they
31:05
add up, but you're gonna pay it. And that's where this market
31:08
goes, goes crazy and ironies of ironies, Tim.
31:12
I mean, you can't make this. This, this guy's so bizarre.
31:16
It's really a cry for help, honestly.
31:18
But he he wrote why is ESTs encouraging potential customers
31:21
to break federal laws that forbid use of cellular phones on
31:25
board aircraft. And this is when the company
31:27
announced the inclusion of the three GPP standards, which
31:32
talked about how the technology will work on board aircrafts.
31:38
And it was one of the funniest posts I saw where it was that
31:42
forget which cartoon it is, but it's, you know, some Pixar movie
31:45
with like Uncle Fester or something.
31:48
And it was, you know, Tim saying ASTS will not work.
31:53
And then it was like, accepts they break laws because it works
31:59
on planes and every time killing the joke.
32:01
But like basically he's kind of admitting it works on airplanes
32:04
now, which is very different from his tune just a year ago.
32:08
And in my DD doc, which is posted, I also did the math on
32:11
just the airplane market. And So what does it look like if
32:13
people just use the AST space mobile service on planes?
32:19
And that that alone is actually a pretty reasonable market.
32:23
And it would save airlines a huge amount of CapEx if they
32:27
didn't have to install the Starlink systems on airplanes.
32:30
And that's a very interesting thing to think about in its own
32:33
right. But the path to get there
32:36
requires satellites to launch. And so we had an interesting
32:40
little thing happened this week as well.
32:42
We had AT&T post, well actually AST Space mobile post that the
32:48
CEO of AT&T, John Stankey, went to Midland for a first look at
32:52
the rapid development of the next John Bluebirds.
32:55
So for those playing at home, whenever you have senior people
32:59
like the CEO of telecom companies or the government go
33:03
to Midland, it's not because that was kind of a free day for
33:06
them. They're like, you know, it's a
33:09
pretty chill day. So instead of going to my elite
33:11
Golf Club or seeing my family, I'm going to go the middle of
33:14
Midland, TX to a small airport, into a clean facility to go
33:20
check out some satellites randomly.
33:22
That's not what they do. And so they're going there
33:25
because something happened. They either are signing an
33:28
agreement or more likely than not, John Stanky put his
33:32
signature on FM 2. And in case you wondered whether
33:36
you know, this was just A1 sided press release by ASTA Space
33:39
Bubble, AT&T promptly retweeted it and said, and we're all in on
33:44
those beautiful waffles. Of course, with that, they got
33:47
more engagement on that post than almost any other post AT&T
33:51
does about anything. And so it's very pretty funny is
33:54
they got 1000 likes on that retweet.
33:56
And you know, when they do something like sponsor, you
33:59
know, NCAA final four, they get like 27 likes.
34:03
I mean, you think about their marketing budget and they're
34:05
probably just like, oh God, we could save probably a billion
34:09
dollars in support promotion fees and just literally give and
34:12
pay a man a free T-shirt and we'll get more engagement.
34:16
And so, you know, and ironically, because I'm looking
34:19
around and I have my AT and TT shirt and my in my office and I
34:24
have my AT&T key chain, which I have on my car and I talk about
34:27
AT&T right now and I've got my AT&T sticker in front of me that
34:30
says connecting changes everything.
34:31
And so you know what, they have actually done the meme and
34:38
they'll be really funny if they actually dump the NCAA and make
34:40
the press release and go, we've actually decided to go all in on
34:43
the space mob from marketing and it'll probably work.
34:48
You know what else is going to work?
34:51
Regulatory purvals and so the FCC is out saying we would like
34:56
to propose quote licensing assembly line to accelerate
35:00
satellite approvals. Do you guys remember when
35:05
everyone was selling AASTS stock and Trump won because a Brandon
35:10
Carr was going to kill our satellite company.
35:14
I mean, that was a valid concern.
35:16
And I have some friends that that certainly pay God knows how
35:20
much money to the street and for consultants to get, you know,
35:23
inside line. And so I'm thinking of 1 friend
35:25
who works at one of the biggest firms and of all the people in
35:29
the world that would have a Direct Line into the FCCI would
35:31
imagine this would have been the person.
35:33
I remember him calling me and you know, just going like, Hey,
35:36
Kook, except you could call me Kook because he is he is a Noah
35:39
Kook. That's where I live my double
35:42
life. And he was, yeah, renting cars
35:45
is going to kill STS. He's going to just do whatever
35:47
SpaceX wants. And because I live in my own
35:51
reality that I choose to project, I decided to ignore
35:53
that comment and what I did because it turned out to be 100%
35:57
wrong. Because I, when I think back at
36:00
that, you know, just so people don't think I'm just totally
36:02
delusional. I remember my logic to that.
36:05
I had some Twitter fights too, you know, when people were so
36:08
bearish on FCC killing space mobile.
36:11
The reason I remain positive is just simply my belief.
36:14
And this is going to sound almost kind of trite, but like
36:16
my belief in America, I just don't believe that the US is
36:20
going to have corrupt institutions.
36:23
And so far we don't. And you know, in fact, the
36:26
opposite, you know, leading innovative companies have had
36:29
the red carpet rolled out for them.
36:31
And that's what the FCC is literally saying.
36:34
Not even you don't have to do any work now random cars saying
36:37
we're going to have a satellite licensing assembly line right on
36:43
schedule too. Because if memory serves, we're
36:45
now past the reply to the comment period for our SES
36:51
market access filing, which will be a big approval when that
36:56
happens. And that you know, I don't know
36:59
how much the government shutdown is impacting that, but that
37:01
could happen, you know, soon as in a couple months.
37:05
And I think that will be the final cork, you know, to pull
37:09
from our champagne bottle of glory and thinking about the de
37:13
risking of this company, you know, once we unfurl FM 1 and FM
37:18
2 and show that those can connect, you know, to the, you
37:22
know, frankly that constellation will now have once we start
37:25
seeing that they're able to produce three to six birds a
37:27
month. And then you have that U.S.
37:30
market access approval, you know, we, we obviously solved
37:34
the financing question. Company at this point, you know,
37:38
is going to be pushing almost $3 billion of cash on the balance
37:41
sheet. And so then you go, well, boy,
37:43
they've really done a lot. And then the government just
37:47
keeps pumping. And so what's also interesting
37:50
is we're starting to see rumors come out about Golden Dome.
37:54
And so, you know, of all things Cauchy, that account is, is
38:00
posting parking breaking news. Maybe they're going after
38:01
Bloomberg, frankly, which actually would make sense.
38:04
But they posted SpaceX is set to receive $2 billion to build
38:07
missile tracking satellites for Golden Dome.
38:10
And that same news was out, you know, of course, posted by Zero
38:15
Hedge, and it's being called Millnet, which is going to power
38:20
Golden Dome. Interesting.
38:22
In a prior life, ASEF stock would have been just bombed on
38:28
this 'cause people would win. Oh, look, SpaceX is winning
38:31
Golden Dome. I can't remember.
38:33
I think we were there was some weird puke this week.
38:39
It was on the G sat news and then it was just bot like you
38:42
can never believe. But it's interesting because
38:44
when I saw this cold and Dome news, my instinct was, Oh shit,
38:48
it's happening. You know, not Oh, there's a you
38:51
know, pressure. You say in space X1 it it's oh
38:54
wow, this is actually starting to like finally get past the
38:57
funnel of the Pentagon where the news is is leaking out.
39:01
And so of you know, of course SpaceX is going to be the first
39:04
thing mentioned because just the drama of the world.
39:06
But to me that means that we're kind of now all of a sudden in
39:09
the frame where whatever asts is going to get we're we're about
39:13
to, you know, learn up. And then meanwhile, as Anthea
39:18
man reminds us, reminds us from Wall Street Journal article is
39:22
that many military military leaders and lawmakers are quote,
39:26
leery of treading too many national security satellite
39:30
networks through SpaceX, hearing that they're going to be
39:32
dependent on the company. You know, fool me once, shame on
39:37
you. Fool me twice, shame on me.
39:40
Then you also had Trump happened here with an interesting little
39:43
snippet that I save And he goes, it's good with Elon.
39:46
I like Elon. I've always liked Elon.
39:48
Elon, Elon's good. He's a nice guy.
39:49
He's a cubicle guy. He had a bad spell, a bad
39:52
period, a bad moment. He was a stupid moment in his
39:54
life, very stupid. But I like Elon.
39:56
I always respected him, you know, when he when Trump is
39:59
like, yeah, you know, good. I like him.
40:01
That's kind of code for, you know, this MFR is dead to me
40:06
except he can't have anyone go split the vote with a third
40:10
political party. We're back Democrats.
40:11
So he's got like, you know, kind of have some truths.
40:14
But I think that says it all is that Elon is going to be kept at
40:17
a distant. And I can't imagine that there's
40:18
a whole lot of critical path elements that are going to be
40:23
based on SpaceX and. So I think we're going to get
40:27
our our conscience and it just shows the golden Dome is
40:31
actually happening pretty soon. And then it's it's a worthwhile
40:35
reminder. We had a good summary from at
40:37
tough 4R who seems to know a lot about the military.
40:42
He put out a really good slide. It's under the tweet I titled
40:46
military programs of record. He put out a really good slide
40:48
that just lists, you know, I think, I don't think this is an
40:52
official slide. I think he may have made this,
40:53
but of just the different use cases and this is really kind of
40:57
like a glossary of Cat C staff over the past five years instead
41:01
of direct to device. So obviously just for general
41:03
communications for IoT, remember there it is again for MUOS 5G
41:09
bridge, not really sure what that means.
41:12
I think it's from radio to current handsets, you know, and
41:17
so on and so forth, basically all these programs of records.
41:19
And Scott is someone who's also said that they have 10, I
41:23
believe it's 11:50 programs of records that they're pursuing.
41:27
Each of these programs, he said were, you know, hundreds of
41:30
millions of dollars. So these are big things and
41:33
these all stack. And you know that, you know,
41:37
just going back to the, the TM, this is where you can start to
41:41
oversell your capacity 'cause you're, you know, obviously the
41:44
US isn't fighting wars, you know, on the Long Island, you
41:48
know, Expressway. And so this capacity can be sold
41:54
where it's needed by the war fighter.
41:56
And it all is kind of incoming. So that one's turned back to
42:01
Elon who can't help himself. He's, you know, it's interesting
42:04
go back and forth on Elon. He's a very interesting guy.
42:06
This Joe Rogan report or interview interview where he
42:09
talked about the feature of the phone.
42:11
It, it kind of makes sense to me what he's saying.
42:13
So I don't even, I think there's an agenda here.
42:16
I think this is just Elon telling you what's going to
42:18
happen. And it kind of makes sense to me
42:20
that the device that we currently call a phone takes on
42:24
a different character of the future.
42:25
And, you know, it's anyone's guess who owns that market.
42:28
Doesn't necessarily make sense to me why Apple is.
42:31
Apple hasn't really innovative that much.
42:34
And you know, something will happen.
42:38
If I were Apple, I'd be reading this and also seeing that the,
42:42
you know, future is uncertain, then Elon is a better futurist
42:49
for sure than Tim Cook. And so who who is likely to
42:54
disrupt with the device that we currently call a phone?
43:00
Elon's a pretty good guess. And so here, it's interesting.
43:05
He's not saying he's going to go create an iPhone, but he's kind
43:09
of insinuating that this will inevitably lead to competition
43:14
with the MN OS and Apple. They are probably sweating
43:18
bullets about this as they should.
43:21
They wherever the certain the future is uncertain, the leaders
43:26
can flip. And it makes no sense to me why
43:30
you would partner with the company that is just as likely
43:35
to put you out of business than really any other outcome.
43:39
And so there is something out this week about GSAT potentially
43:44
getting bought by SpaceX. And now I think there was
43:48
another space. I know there was another spaces
43:50
by AMPAM man on this. I asked a couple of my friends
43:53
who are investment bankers because this just smelled kind
43:56
of weird to me. And you don't leak a banker
44:00
doesn't leak that SpaceX is is talking to GSAT unless the deal
44:05
is going poorly. He's just, you think about it
44:08
from a investment banking perspective, everyone's under
44:11
NDA in these discussions. And so if you're SpaceX, you
44:15
know, you're going to look at the data for sure.
44:17
Why wouldn't you? It's free information.
44:19
But then if someone leaks that, you know, SpaceX is in chats
44:22
with G SAT, you're going to be so mad.
44:26
It's just, it's a, it's a very unprofessional thing to do if
44:29
you're a banker, unless of course, you start to realize
44:32
SpaceX isn't going to do anything.
44:33
So then you, you, you PR that to create the perception of heat
44:38
and some panic. And so then someone else goes,
44:40
Oh my God, we better do it. Otherwise SpaceX is going to do
44:42
it. And that's generally how I view
44:44
this. And you know, of course, we
44:45
could find out tomorrow that I'm dead wrong.
44:48
So I'll certainly allow for that.
44:50
I don't know the future. I certainly don't have any
44:52
inside information on this. And you know, it's very
44:54
dangerous to speculate on Sunday night when it's called, you
44:57
know, merger Monday for a reason.
44:59
So I could be proven wrong in nine hours, which is fine, but I
45:05
don't really see why SpaceX would buy it.
45:08
Because the spectrum GSAT has is already spoken for with Apple.
45:13
And I don't see that Apple is going to really offer anything
45:16
more than an emergency texting service because they themselves
45:22
live in fear of pissing off the MN OS if they start to encroach
45:25
as a network operator themselves.
45:28
The MN OS all of a sudden are just going to promote Pixel
45:31
devices and Android devices. It's easy.
45:33
They can start to put their thumb on the scale in Shift, you
45:37
know, I don't know how many hundreds of basis points of
45:38
market share overnight very subtly away from Apple.
45:41
And so there is some tension there.
45:45
And so then what would SpaceX really get?
45:47
Like if you buy GSAT, you could nuke their, there's their new
45:51
constellation. You wouldn't need to build it.
45:53
So that's a lot of found value there.
45:55
And so maybe maybe there's some, you know, effectively IRR driven
45:59
trade by SpaceX. If you buy it, you basically buy
46:02
this Apple contract. It allows you to utilize your
46:05
satellites, which frankly you might have trouble utilizing
46:09
right now. And so they put up all these DAC
46:12
satellites, but they're not getting any, any M&O contracts.
46:15
So maybe what you could see is this is actually the surrender
46:19
of SpaceX because if you can't get any M&O business for obvious
46:23
reasons, means why would you let the wolf into the hen house?
46:26
Well, you got to have some business otherwise you're just
46:28
dead duck. Maybe you end up just being the
46:30
vendor to the manufacturers. But then I just feel like you're
46:37
pigeon polled in terms of what they're going to be willing to
46:39
pay you 'cause that just seems like that's much more of like,
46:43
like here's your capacity charge as opposed to, you know, the the
46:46
generous revenue shares you get with the M and OS.
46:48
And then the device manufacturers are also going to
46:51
be hemmed in on again, not wanting to offer a service that
46:55
starts to encroach on the MN OS. So it's a, it's kind of a weird
46:59
thing to think about. It's it's certainly a fluid
47:05
dynamic. And so, you know, if SpaceX were
47:10
to buy Global Star, then I could just see all the MN OS just
47:14
further racing the Asts. It just becomes clear that there
47:17
really is only one option if you're an MNO and that option
47:22
should already be obvious it it should just be AST Space Mobile.
47:28
I personally think Iridium is the more attractive company for
47:31
MNA. It's smaller value.
47:34
CEO seems to have already waved the white flag.
47:37
The last earnings call was just nothing but pathetic.
47:41
They have some spectrum. It's like 8.75 gigahertz.
47:45
They have a big book of business with their narrow band stuff
47:48
with the government, things like that.
47:49
You step into that, you get $500 million of cash flow.
47:53
You have no, you're not going to rebuild that, that
47:56
constellation. So you run it off, replace the
47:59
service of your current deals with your new constellation,
48:02
transition all those customers, upsell them massively on better
48:05
products. You get the global spectrum,
48:09
which isn't a lot, but it's better than nothing.
48:11
And you clean up the market to just have fewer people out
48:15
there, which which would be great.
48:18
And so, you know, I think King Tut, as usual, said it best.
48:23
And you just went, it's funny how many legacy satellite
48:26
companies are quote, suddenly rushing to sell out their
48:28
spectrum assets or even their entire businesses all together.
48:33
It is interesting. It's a, it's a mass exit where
48:37
it's almost like people see something coming and they're
48:41
trying to salvage what they can before they're rendered
48:43
obsolete. And so we'll see, but it is a
48:50
shocking sort of change right away.
48:54
And I get pretty excited about this too, because it'll be
48:58
great. It just have silence.
49:02
And so getting all these third players out of here, we think
49:06
about it. When Echostar sold, I was so
49:10
excited to have Charlie Ergen out of here.
49:13
This guy is super annoying because he's kind of irrational,
49:17
very smart, ballsy as all hell, has cash and so he can, he can
49:22
do things that can really screw up a market.
49:25
He could have built 1/3 constellation and just I don't
49:29
know what he would have done with it because I, I'm still
49:31
dubious. The MDA can, can really make
49:33
something great. You know, that prime contractor
49:35
model, as I've said a million times, is pretty is is pretty
49:38
dubious, but I really don't want to have somewhat out there
49:42
'cause it just won't go away for five or ten years.
49:46
Then I really don't want to have Iridium talking about anything
49:51
and Global Star talking about things and Lincoln Omni Space.
49:55
And so we're having these guys kind of fold.
49:57
It would be great if Iridium goes away.
50:00
It'd be great. I think if ASTS buys it, that
50:02
would be great. I mean, there's a deal that
50:04
could be super attractive for AST Space Mobile and frankly
50:08
super attractive for Iridium. And then all of a sudden, if you
50:11
just have a market where it's just ASTS and SpaceX, it will be
50:15
just very simplifying for the market.
50:18
And then any people will be able to race to the conclusion I've
50:20
already had, which is this is a winner take most market.
50:23
And then people will realize that ASTS is that winner and
50:27
then we'll trade it a ungodly valuation multiple.
50:32
And that's what looks like can actually be an early 2026 type
50:36
of thing if this G sat news or, you know, situation resolves
50:41
itself. And then I still think that
50:42
already it was probably fast to go as well.
50:45
And Lincoln Omni spacer and I'm going to be buried under some
50:48
European bureaucracy. Good luck to them.
50:50
So this market's actually shaping up to be super
50:53
consolidated fast and that's a good thing.
50:56
And so then I posted, you know, this tweet, Iridium is next to
51:01
go, which mega constellations, which is a great account to
51:06
follow, also made the same kind of observation.
51:10
They put it out with spectrum assets overlapping and D to D
51:13
spectrum grabbing heating up. The question is, what's the end
51:18
game for Iridium still sitting at just a $1.4 billion
51:22
valuation. They have some debt too for it's
51:23
worth. But yeah, I agree, this one just
51:25
seems like it's it's ready to go.
51:29
And then we also Speaking of things that are ready to go, we
51:33
have new Glen 2 and so that half fired, I think it's on the path,
51:38
the cargo, the Escapade spacecraft is, Yep, it's now
51:44
secured in the fairing. And so we're going to be getting
51:47
a New Glenn 2 launch pretty soon, which will be not for the
51:51
fate of heart, but exciting nonetheless.
51:54
And I think that's pretty much all we have to cover.
51:58
So thank you for joining me. I am really as excited as I've
52:07
it's been about this investment. It feels like the stock wants to
52:11
make a move the way it recovered after the convertible bond.
52:15
This news that we have coming out of the company, the the
52:18
cadence is just accelerating. And again, it's kind of
52:21
interesting like why are they accelerating all this news right
52:24
before earnings? Why, what are they saving in the
52:28
earnings call for us that they want to have, you know, specific
52:32
attention paid to and I, you know, I can only guess.
52:36
And so luckily we really have to wait an additional week to find
52:39
that out. So thank you everyone for
52:41
joining me. Hope everyone has a great
52:43
evening and I will see everyone next week.
52:47
Bye. Thanks for listening to the AST
52:50
Space Mobile Podcast. If you enjoyed this episode and
52:53
you'd like to help support the podcast, please share it with
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others, post about it on social media, or leave a rating and
52:59
review. To catch all the latest news
53:02
about AST Space Mobile, make sure to subscribe.
53:05
Thanks again and I'll see you next time.
53:11
We're doing something very, very big and I think with this
53:13
technology we can really affect billion lives.
53:16
AST Space Mobile is the only company that has full technology
53:21
to deliver several mobile connectivity directly through
53:24
space to the everyday smartphone.
53:27
People will just basically turn their phone be seamless.
53:31
But regardless of where you are, we don't want the user even to
53:33
know that it's connected by satellite.
53:36
Our role is to bring this into reality, always in partnership
53:40
with the MMO Listen. Waffles.