Latest / AST SpaceMobile Podcast / Anpanman - Golden Dome Unlocked

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Anpanman - Golden Dome Unlocked · AST SpaceMobile Podcast

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This is the AST Space Mobile podcast.
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Just basically from your phone and be seamless regardless of
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where you are. We don't want the user even to
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know that it's connected by satellite.
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Listen, the opportunity that we have is very, very, very large.
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Good evening everyone. Thanks for joining this last
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minute space that I'm holding in lieu of our because of the news
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that came out today after hours, which we'll see if the company
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PRS it tomorrow, which would be quite interesting just given
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that I think a lot of people have left for the long weekend,
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meaning institutions. But clearly retail is probably
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still sticking around. And as we head into options
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expiry, which I remember earlier this week, I had said that I
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thought we were going to consolidate around 100 and
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likely then, you know, move higher after this week unless
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something groundbreaking came out, which clearly that's just
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happened. So I think this morning I said
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it, it feels like something's going to happen and and indeed
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something did, not that I knew, but it certainly felt like it.
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So, you know, as they say, markets can be efficient and
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perhaps some folks out there knew, which was why AST was
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strong over the course of the day.
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But anyway, yeah, thanks everyone for joining.
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I wanted to hold this base because we've hit a pretty
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significant milestone. I think this milestone in
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particular is really huge for the company because it's, it's
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in terms of the financial impact, it's going to be pretty
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massive. And then it's a huge validation
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for what the company's doing. And what I mean by that is, you
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know, going back to, and I, I've talked to a few people about
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this and I remember I, you know, I just actually earlier today
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just sent Katzie a, a message thanking him for all his work
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going back to 2021-2022. It was Katzie who was first to
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really talk about the dual use case of ASD space mobile
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satellites. Because, you know, by having
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this large phased array orbiting the Earth, besides doing
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connectivity, there were a number of other things you could
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do around radar sensing, GPS backup.
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And, you know, and now we've learned that there's probably
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about 10 different use cases besides communications that
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would be applicable to military applications.
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And so, but yeah, hats off to Catsy for doing all this work.
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As I've explained in my spaces and, and also Kukas explained,
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there were some pretty dark times over the past several
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years where even in the throes of, you know, trading down to
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$2.00 and they're really part of 2024.
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Catsy continue to, you know, put out due diligence just hammering
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home the case that beyond just providing, you know,
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communications to war fighters, there were these other aspects
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of what the company could do around electronic warfare radar,
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you know, very particular radar type of sensing applications,
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what have you. And so I think we all owe a huge
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debt of gratitude to Catsy for all his work.
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And even in the face of skepticism, whether that was
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outside the community or in the community, because there were
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points in time where even myself or Kook where question, you
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know, hey, Catsy, this is great. But I'm not sure, you know, this
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what you're proposing makes sense, but I'm not sure it's
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going to be relevant or maybe the company's not doing it.
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But lo and behold, like he he was right the entire time.
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So, yeah, I think, I think this, this, this award that came out
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this evening is a big deal because I think as Space Mob, a
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lot of investors already know about the potential dual use
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case of the company's satellites, whether it's the
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existing commercial satellites are going to be put up or
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potentially satellites that will be purpose built for the
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government. But it's important in that
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taking a step back, you know, most investors don't really know
4:29
what ASD Space Mobile is like. It's not on most people's
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radars. I mean, people understand
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Starlink, they probably, there's probably a pretty decent and if
4:38
you look at like institutional ownership, it's certainly true.
4:41
Like there's probably most people on the street know Rocket
4:44
Lab and what they do right. And out of the gate, Rocket Lab
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has always had a pretty significant institutional
4:53
support, you know, after they went public.
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But AST was kind of like this niche company and you know, hey,
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it's, it's for the people that spent any, you know, that took
5:03
the time and did some research, you know, oh, wow, this
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company's like doing broadband connectivity to unmodified
5:10
phones. That seems like that could be a
5:12
big market. But then I think, you know, in
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the confusion of things, I think people probably either they
5:18
didn't know about AC space mobile or they do.
5:20
They did, but then they assumed it was like something similar to
5:24
what Iridium does, right? Or, or, you know, we, we, we saw
5:29
a few short sellers come out over the last few weeks.
5:32
What was this guy like raging capital?
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This guy was, this guy made his money building, I think some
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social actually was like some message boards back in the day,
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which became popular. And then, you know, he moved
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into like managing assets and then moving to the venture side.
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But I think he tweeted like a week ago or two weeks ago about
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how he was shorting AST because it's basically another Radium.
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And, you know, the story's the same, which we kind of poked fun
6:00
at him. Like, yeah, Radium is a
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completely different company. I won't go into all the details,
6:07
but I mean, the key aspect which the guy missed is like the world
6:11
is very different than 1990s. Like a lot of technology has
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changed and what the company's doing is changing and it's
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providing connectivity to unmodified devices, right?
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Like there's no friction in turning on the service versus
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selling someone $1000 brick phone that can do texting in
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limited voice, right? Those are very different value
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propositions. But anyway, but that's kind of
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like the general, and I'm sure like many of you have pitched
6:36
ASDC's mobile to friends and family and you probably get met
6:41
with some level of skepticism. And then, you know, like we all
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say, after that 5 minutes, you get pushed back.
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But then after an hour they're like, OK, yeah, I'm going to
6:49
invest. But that's the general
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perception by the market, right? Like I think the company's is
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misunderstood. Only a few people truly
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understand it and then only a small subset of those people
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truly understand that there's not just a commercial business
7:05
here. There's also the defense
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business, right? There's defense and there's like
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the first responder business as well.
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And the defense business, as Scott in his own words, you
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know, that is a business that is going to be bigger than the
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commercial business in the early years, right?
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And so I think for those that do know the news out today, you
7:26
know, it's I was joking with Kook about how because he he
7:30
asked me, he's like, well, what do you think the market reaction
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will be? And, and you know, is it going
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to be positive? Like, are people going to be
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confused? And I told him like, yeah, it's
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going to be very positive, right?
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Like, I think we've seen this where some of these other
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companies like Rocket Lab, Voyager, Firefly, they get
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awards and it's expected, right? And we joke about like things
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are priced in to an extent, like it was priced in for those
7:55
companies because it was kind of expected, right?
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Whereas I think for AST space mobile people see this consumer
8:03
broadband connectivity company, they don't they don't truly
8:05
understand the implications of having a large massive phased
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array and lower orbit like the different applications you can
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do with that. And so I think people were
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dismissive of all the things that we were, we've been posting
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for over a year now, right? Like I remember putting
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together, you know, sending out these, these the, the tweets
8:30
with, with, you know, the Golden Dome, like having Cerberus.
8:34
You know, the reason why we put Cerberus on there is because
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Cerberus is a big defense investor.
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They own a piece of legato and we believe that legato spectrum
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is going to be an integral part of Golden Dome and Cerberus.
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Steve Feinberg, who is the sorry, that's my, those are my
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kids yelling. But anyway, Steve Feinberg is
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his number 2 at the Department of War.
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And so having that connection, that's why we, we tweet those
9:02
things with Cerberus standing over like this Golden Dome over
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the US for those that don't know.
9:07
But yeah, we've been pushing this, this narrative that they
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are going to win Golden Dome based off of our due diligence.
9:14
And lo and behold, that happened today, right?
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And so this is a huge point of validation.
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I think even valuations this this like short seller douchebag
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guy who wrote who did a write up, like part of his write up
9:29
was he was very skeptical that the company would get anything.
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He also doesn't, you know, I guess he didn't do his work like
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he was saying, well, the company's just going to be a
9:39
minor prime, minor subprime to a prime if they get work and it'll
9:43
be low margin. What he doesn't know is that the
9:45
company is actually a prime for SDA and the company is getting
9:50
direct work and the numbers are going to be pretty big, right?
9:53
And so, so I think that's where for us as, as you know, space
10:00
mob investors understanding, you know, we, we talk about this
10:04
whole idea of know what you own is important, right, 'cause it's
10:07
this company's not just about commercial, it's about defense,
10:11
which is going to be pretty large.
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It's also about, you know, first responder networks.
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It's going to, you know, Sacco JV, there's significant upside
10:20
there in terms of providing A sovereign turnkey solution for
10:23
Europe, which also leads to potential awards for two
10:28
gigahertz MSS spectrum in 2027. I mean, there's just so many
10:32
different threads to this story that, you know, I could go on
10:35
and on and talk about it. But but yeah, I think I think
10:38
the, as we saw overnight or as we're seeing now, I think the
10:41
stocks trading at one O 736 on on, on pretty decent volume.
10:47
When I saw the news and the stock was like at 101-0130.
10:51
I happen to have some money that I freed up today.
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And so I bought 2000 shares at one O 1 three.
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And then and then I didn't, you know, the, the stock started to
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move a little bit. And so I bought another 2000 at
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like one O 330, I think it was. And then I think it's people
11:07
kind of started to understand the implications of this.
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The stock started to move further.
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And so I think tomorrow, I mean, who knows, right?
11:14
Like I think it is pretty tough to predict where ASD trades on
11:19
any given day, just the algo, I guess we'd call it like part of
11:27
my French, but the algo fuckery that happens and, and any number
11:30
of different things that are going on with this particular
11:33
stock or, or different. But but yeah, I think I think
11:38
tomorrow we should open up pretty strong.
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And as people digest this and you know, we, we, we happen to
11:42
be blessed by the way, with like B Riley and Scotiabank, who
11:46
downgraded our ratings a day ago and three days ago.
11:51
That's good, by the way, because like the stock hung in there
11:54
just fine on the, on the downgrades.
11:56
And quite candidly, like I was able to add some upside
11:59
exposure. But when you have one of the
12:04
things on the street that's tough is like, if you have a
12:06
stock that's doing well and everybody's bullish on it, like
12:09
everyone has a buy rating, there's no place to move.
12:11
Like they can move targets up. But then that doesn't really
12:14
give you, you know, the the financial juice, right?
12:18
But when analysts are forced to upgrade stocks by ratings and
12:24
either they do that on a single rating or they do what we call a
12:26
double upgrade, right? So, so for example, Scotia is
12:29
primed to do a double upgrade at some point, right?
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They're on a cell rating. So eventually, and you know,
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they have the the notoriety they and B Riley of down grading the
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stock on the eve of our first Golden Dome award.
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So another, another, I guess, badge of honor for Scotia, who's
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been pretty awful. I mean, after getting turned by
12:57
hedge funds to be bearish on the name, they've been pretty bad on
13:01
their timing. Or I guess you could look at it
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as pretty good, right? Because they've been become like
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a few other characters, like they're, they've become like
13:10
inverse indicators, right? But, but the good thing about
13:14
that is you, you may have this award and we are expecting
13:18
another one. And for those, those people
13:21
who've computed out like space mob due diligence, yeah, you're
13:26
don't, don't do that. We actually are pretty good at
13:29
what we do. But yeah, there, there's,
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there's basically like 2 awards, right?
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And so this first one is the first piece.
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I'll, I'll talk a little bit about the two awards.
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And and I will I will say like I had to have, you know, GEM and I
13:44
helped me out in kind of deciphering some of this stuff.
13:48
But today's award was for the third tranche of the Missile
13:53
Defense Agency SHIELD program. And so this one in particular
13:58
it's they call it scalable Homeland Innovative Enterprise
14:02
Layer Defense, which the acronym of SHIELD.
14:05
The total program ceiling for this is $151 billion and that
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shared over, you know, multiple awards for 10 years.
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And So what this does is, you know, this is a contracting
14:16
vehicle, the primary contracting vehicle for the Golden Dome
14:19
initiative. And you know, this in particular
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is to, you know, develop a multi domain system to detect, track,
14:29
intercept advanced threats like Hoppersonics, Ballistics and
14:32
other cruise missiles. And So what what this means for
14:37
AST is that, you know, AST was named as a recipient, which is
14:41
an ID and they got an IDIQ, which is indefinite delivery,
14:45
indefinite quantity. And what that means is that this
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gives the company now the license.
14:50
You know, it's like the entree to them go pursue billions of
14:54
dollars for contract work, right.
14:56
And so you have to kind of pass this first stage in order to
15:01
start doing work for Gonadome, right?
15:03
So it pre qualifies them. And so now the company has the
15:09
ability to go in and win work. And I think what's important
15:13
about this is that this is a important, you know, this is a
15:17
validation of the dual use of the technology, right?
15:20
And so the Department of Defense, what it says is, and,
15:24
and I guess taking a step back, you know, heading into this, we
15:27
have, we have 9 military, military contracts of which the
15:32
SDA gave us like $43 million. And the SDA is part of this, by
15:37
the way. And so FM1-FM and FM2FM2, which
15:44
is sitting down in Cape Canaveral right now waiting to
15:47
launch on Blue Origin, New Glen Three, those two satellites are
15:51
Halo satellites. So Halo in that project from the
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SDA, they allocated money to various, you know, contractors
16:00
to develop 2 prototypes to prove out their technology, right.
16:05
And I believe Halo, it actually pays, pays for the launches as
16:09
well. So, and maybe, you know, this
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was one of our questions for Scott, but I, I believe LVM 3
16:15
and you know, Israel, LVM 3, but then also this New Glenn launch
16:20
will be paid for by the government.
16:23
And so but yeah, so EST is part of that program.
16:28
They also, you know, some of you guys may have read this past
16:31
week about the DIU, the defense Innovation Unit.
16:36
And that is like, it's basically like skunk works right for for
16:40
the Department of War. And so when I and then that
16:44
program AST got $10 million from that department and the the
16:48
purpose of DIU is to evaluate new next generation technologies
16:54
and then figure out ways that that technology can be used in
16:57
the various departments of defense, the other the different
17:01
armed forces, whether that's like the Navy, the Air Force,
17:04
Army, etcetera. So, so today is the 10th, you
17:11
know, now, now we've been assigned or we have the ability
17:14
to go hunt for Golden Dome work which the company feels very
17:18
confident in, you know their position in that.
17:22
And I guess one thing I would in terms of characterizing that the
17:27
company had mentioned, I think it was at Bank of America, the
17:31
Bank of America conference where you know they reiterated the
17:34
guidance of 50 to $75 million of second-half revenue.
17:38
We'll see where that comes out. I think there's probably a
17:40
reasonable chance that it will come at the lower end of that.
17:43
And the reason why is that, you know, we've, we are in terms of
17:48
our launch have been delayed and that's been, I've talked about
17:51
this before, but FM 1 and FM 2 on what we believe, I can't say
17:57
this definitively, but I think there's, there were some changes
18:00
in terms of government requirements.
18:02
And so the satellites needed additional time and then they
18:05
got out the door a bit late. And then of course, you know,
18:09
there were some launch launch provider delays as well, and in
18:12
particular for new Blend 3 refurbishing those boosters,
18:17
which they're planning to reuse. And this is part of the program
18:20
to see if they can turn them around pretty quickly.
18:23
I mean, this is the first time they're doing it, you know,
18:26
using the same booster. That's that's take that's going
18:30
to take a bit more time than they'd expected.
18:33
And so instead of a January launch, you're probably looking
18:36
more like something in February and perhaps even possibly moving
18:40
into March. But the cool thing, as I
18:43
mentioned this morning, is that, you know, sending FM 2 on New
18:48
Glen 3 is going to be pretty badass.
18:50
And having having the opportunity to go down there and
18:54
see a new the new spacecraft, which is FM 2 going up on the
19:00
new rocket, New Glen three, that's going to be pretty
19:02
special. So, so yeah.
19:06
So I think where was I going with that?
19:09
Oh, oh. So going back to Bank of
19:11
America, Scott had mentioned how this coming year, 2026 will be
19:16
the year of, you know, commercialization of course, but
19:20
that, you know, he wants to move from people counting launch
19:24
cadence to counting revenue, right?
19:27
And part of the characterization of that was the fact that this
19:32
coming year in 2026, a majority of the revenues that are
19:35
expected are going to be defense revenues, right?
19:39
And so this year the majority of financial performance will be
19:44
coming from defense contracts. And my guess is, you know, you
19:49
mix a bit of first net in there as well.
19:51
And then he was saying you'll, you'll have commercial revenues
19:57
from their M and OS start to kick in, in a meaningful way, in
20:00
a more meaningful way in 2027. And So what does that mean?
20:05
If you're looking at, and I think the characterization is
20:08
like hundreds of billions of revenue this year.
20:10
So if that's the case, like in addition to those 9 contracts
20:14
that go from items of record to something much bigger, that
20:19
would indicate that the company has expectations that they are
20:23
planning to get something from Golden Dome.
20:25
And so in particular in that, in that conference, you know, as
20:32
Scott had mentioned, the idea of potentially ramping up, you
20:36
know, expanding facilities to ramp up production from six
20:40
satellites to potentially 10 to 12 satellites.
20:44
And just given how quickly we're or how quickly they wanted to
20:47
deploy the commercial consolation that would suggest
20:53
by building those additional satellites.
20:54
And you also mentioned, you know a government shell at the end of
20:57
that talk, it would seem that they are expecting some pretty
21:01
material military contracts to come in this year or not
21:06
contracts to come in, but those initial wars to expand quite
21:09
materially. And as you mentioned in that,
21:13
you know, presentation as well that they are looking for
21:17
another site in Midland to solely dedicate production space
21:22
to only building microns. And so clearly the company
21:28
moving from 400,000 square feet, which was, you know, we thought
21:31
was pretty big, to 500,000 square feet, which is where they
21:33
are now. And then probably flexing that
21:35
up to 60657100I mean, who knows where it kind of ends up.
21:39
But that means that they're expecting some really big work
21:44
ahead. And it's not going to be just
21:47
the first low band constellation or the second mid band
21:50
consolation, which will utilize the gutter spectrum, but we're
21:54
probably talking about a consolation that's focused on
21:58
defense applications. So 1/3 shell.
22:02
So, so that's that's pretty damn exciting.
22:06
And so going back to the what today's, you know, award or you
22:11
know, the, the IDIQ for AC space mobile, this opens up a lot of
22:16
DoD work around gold Adobe for them in particular.
22:21
I guess the the potential for the company.
22:26
And I think, I mean, I don't know, we've tried to, we're
22:30
trying to like put some numbers around it, but I, I feel like
22:34
the company, yeah, you could be looking at billions of dollars,
22:38
like 1 to 2 1/2 billion dollars this first tranche.
22:40
I mean, we'll see, but but this is a mechanism where, you know,
22:46
the company goes to a program of record versus A1 off experiment.
22:51
And so I think the key thing, as I mentioned before, is that now
22:55
we've moved from baseball speculating that that the
22:59
company is part of Golden Dome to actually it happening, right
23:04
And and then it being a reality. And so the timing like we had
23:08
talked about, I think we had pushed it back to like mid
23:10
January and and lo and behold, it's January 15th.
23:14
And so this, this initial part is just I think one of two
23:18
programs that the company has talked about with investors.
23:23
And I believe I could be wrong here, but I believe this is the
23:26
smart smaller part of it in terms of potential dollars or
23:30
early potential dollars. And so today they got the IDIQ
23:35
for this particular piece. There's another piece which I
23:38
think is relevant for the company as well, which is just
23:43
go through some notes here. So the company is being caught
23:49
evaluated for the MDA Noble. It's nimble options for buying
23:55
layered effects. And this is well, I won't go
23:58
through the solicitation number, but this this particular let's
24:03
see here, this particular area is specialized.
24:07
It's a specialized umbrella vehicle design specifically to
24:10
bypass traditional slow military procurement.
24:13
It also allows for MDA to rapidly award contracts to non
24:19
traditional sources like commercial space companies for
24:22
disruptive technologies. And so I guess the mechanism of
24:26
this is that instead of a single ratio contract, it operates as a
24:30
continuous open door where companies can submit white
24:33
papers that they propose against specific needs.
24:36
And then if MDA likes the idea, then they can quickly fund it.
24:41
And so why is that? Like why?
24:43
So why is that relevant to ASD Space Mobile?
24:46
Well, in particular, let's see here.
24:51
So the non traditional designation, this solicitation
24:54
explicitly targets companies that don't typically do defense
24:57
work as a primary business, which that's AST Space Mobile,
25:00
which as we all know, you know is commercial first cellular
25:03
broadband provider. So it fits non traditional
25:07
definition. And then there are some
25:10
specific, I guess requests in that in this area where ASD fits
25:15
quite well, which is the call for space based sensors.
25:20
And under the specific call, let's see here, MDA is asking
25:25
for space based sensors and integrated non kinetic and
25:29
electronic warfare. And so that fits what ASD is
25:33
doing quite well. Let's see here.
25:36
So what this suggests is that MDA is not just looking for
25:40
Bluebirds on the commercial side or for communications, but as
25:44
Scott mentioned, for non communication applications such
25:47
as using, you know, the large phase arrays as sensors to
25:50
detect RF launches or tracking hypersonic signatures.
25:55
And then there's of course electronic warfare.
25:58
So jamming signals, you're gathering intelligence and all
26:02
that stuff. And so in this particular
26:06
program, what the government's looking for is rapid capability
26:10
development. So that kind of mirrors what AST
26:13
is doing given that we are launching A consolation and that
26:17
consolation can actually do in addition to its primary work,
26:20
which is, you know, communications, it can do these
26:23
other things as well with very limited very, you know, limited
26:26
changes, maybe it's software and some some changes to hardware.
26:30
And so the strategic implication is that, you know, this moves
26:34
AST not, you know, from what we would typically view as, you
26:39
know, communications applications like, you know,
26:43
sending data to war fighters, like drones, coordinating, you
26:48
know, between vehicles, things like that, which you typically
26:51
would think of as a as a a communications provider company.
26:55
It moves from that to kill chain.
26:57
So remember that is, you know, a network that's used to detect
27:02
and stop missile threats, but also, you know, within that
27:06
framework for, you know, defense work, that means that, you know,
27:11
the company could command much higher margins and stickier
27:14
contracts than just, you know, standard connectivity.
27:17
And so that one, let me just take a look here.
27:27
I don't think that so that one is going to be awarded later.
27:30
And I believe that one, that one is what the company refers to
27:37
as, you know, in terms of sizing, there's this big thing
27:41
and then there's something that's massive.
27:42
And so I think what we got today is big and then this particular
27:47
area could be massive, right? And so, so yeah, I think, I
27:53
think when taking a step back, we've come a pretty far away,
28:00
right? We are now we are now, I guess
28:06
in terms of the most visible program, Golden Dome, we're now,
28:11
you know, developing, doing development work for Golden Dome
28:13
will provide technology, everything that Scott has hinted
28:17
at and people have, you know, speculated and of course,
28:20
skeptics have said that's not going to happen.
28:22
You know, whether that's our friend dim Spacebar, Temporar or
28:26
valuations of these new shorts who who all say the defense work
28:30
is a pipe dream and it's something that space mob is
28:32
made-up. That's not the case.
28:35
We actually are in line to get Golden Dome work.
28:39
And and I don't think it's just going to be, I mean it to a
28:44
degree, it's going to piggyback off the current, you know,
28:47
constellation. But I also believe that it is
28:50
going to expand into potentially A dedicated consolation, which
28:54
is why, you know, the company is getting additional, you know,
28:58
production capacity in space. So let me pause there.
29:04
I'm going to see if there's any questions or comments.
29:11
There's some pretty funny comments here.
29:17
But yeah, I actually, I don't see any questions.
29:22
I do think, you know, it'll be interesting to see what the
29:24
research analyst community responses.
29:28
Like I said before, you know you had B Riley downgrade the
29:32
rating, although they did raise the price target to one O 5,
29:34
which is now the highest and happens to be under our current
29:38
trading price. And that that is a risk.
29:41
I will say if you look at the street like Scotia of course is
29:46
at 4560, you have UBS which is pretty stale, stale meeting the
29:51
beginning of December. They're at neutral at 43.
29:55
You've got Clear St., which is a mid November price target of 87
29:59
Deutsche Bank 81 Roth Capital 8250 Cantor 80 Barclays.
30:05
Oh yeah, they, they downgraded to underweight, which is
30:08
basically sell in in mid-october.
30:10
That was 60. So these analysts, they're going
30:14
to have to make some adjustments probably with this news, because
30:17
some of them I, I don't expect Scotiabank to do anything
30:20
because they, they seem pretty dug in.
30:22
But what's funny is like in their in their downgrade and
30:26
their notes since June, they have not talked about the
30:28
defense angle. I don't believe, I can't
30:31
remember, I don't think they've really talked about it.
30:33
Or if they did, they downplayed it.
30:35
So they're going to have to go through some, you know, some
30:38
gymnastics to explain this away that some of these other
30:42
research analysts just, you know, I think it's important to
30:46
know that their price targets are much lower.
30:48
And either, you know, they'll probably have to raise the price
30:51
targets, but you might have more of these rating changes to the
30:56
neutral side from by to justify that, you know, a price target
31:01
that's not much higher than where we are.
31:03
I mean, I don't know, maybe some of these guys will be more
31:05
bullish, but I think I think probably a decent amount of the
31:09
street is waiting for several launches and of course, for BB6
31:14
to unfold before they, they get aggressive on change the ratings
31:18
upwards and price targets upwards, which is, you know,
31:20
that's fair. But I, I do think, as I
31:25
mentioned before, I think the, the reaction to this news this
31:28
evening, which is pretty material and, and hopefully
31:31
Scott's listening and, and he'll put out PR because I think, and
31:36
they have done this in the past, like when they got the SDA award
31:39
and the DIU award, they, they, they did put APR out.
31:42
And I think I don't know if I was, if I was outside council or
31:47
if I was general counsel, I would be recommending to the
31:52
company that this is pretty material and that you'd have to
31:54
at the minimum 8K at but you know, put out PR.
31:58
So hopefully that comes tomorrow.
31:59
And as I mentioned before, just give people an update.
32:02
I think let's see short, short interest real time has actually
32:07
come down a little bit. So maybe some guys got smart and
32:10
covered what what was going to be a complete disaster for them.
32:16
So on January 9th, like the short interest is 40.8 billion
32:21
and then January 12th it went down to 38.5.
32:25
So there was some covering and obviously like there's some ways
32:27
to from convert Arbs who are trading deltas.
32:30
And so when the stock goes up, they'll short some and when the
32:33
stock goes down, they'll they'll buy some.
32:34
That's how you monetize the underlying call option in in a
32:38
convert. So there's a bit of that.
32:40
But over let's see January 12th, January 13th, January 14th, it's
32:45
been pretty flat like it's been 38.5 million shares short,
32:50
right. So that said, yeah, I mean, I I
32:57
think it was, I think it was Coop that reached out to me
33:01
after this news came out and asked me point blank, you know,
33:05
if you're short, like, what's the thesis now?
33:08
And of course, like you can, I think for a short seller, like
33:12
the valuation argument is always going to be there, right?
33:14
So it's if you look at your term financials, like you know, the
33:20
company, it's still on the cusp of generating with your revenue.
33:24
But on the other hand, if you look at, and this is the game
33:27
that like Scotia played, it's like pick your year, pick your
33:31
out year, right? Like Scotia picked an out year
33:34
that suited their their downgrade, which is like 20.
33:38
What was it 20282027 where where their free cash?
33:42
I think it was like 3 1/2 billion.
33:44
But then the following year they modelled 6 billion and then the
33:47
following year is 10 billion and then it got up to like 17
33:50
billion, right, for 2032 or something.
33:53
Which I think someone astutely pointed out that if they are, if
33:57
ASD Space Mobile is able to get to 17 1/2 billion of free cash
34:01
flow a year, that would put them in the top ten companies, 10
34:05
public companies of free cash flow generation.
34:08
So, so, yeah, I think, I think perhaps you can make evaluation
34:13
argument and you know, everybody can argue one way or the other.
34:17
But what I would say though, is that the short case has always
34:22
been built on. I mean, the reoccurring theme
34:25
is, is people going to adopt this solution?
34:28
Are they going to pay for it? And that's just a commercial
34:30
side, right? But then they haven't really, no
34:33
one's really made a value in evaluation case or argument for
34:37
or against on the defense side, right?
34:39
Like, so how do you, how do you quantify that?
34:41
And I think that's where with this administration where Trump
34:45
is saying, you know, he wants Golden Dome to be up and running
34:48
and operational before he leaves office, which doesn't leave that
34:51
much time. And if you look at the needs,
34:55
you know, if you talk to the company, they're the the, you
34:59
know, Bluebird large phased arrays, like there's nothing
35:02
else out there that's comparable in terms of capability.
35:05
And so I think, you know, for the US government, like, what is
35:08
that worth? And I don't, I couldn't tell you
35:12
like, I think it's probably, you know, maybe a few billion in
35:17
revenue a year, depending on the use cases.
35:20
And it's not just like communications, but you know,
35:22
we're talking about radar sensing, electronic warfare.
35:25
I mean, there's a whole, there's a whole slew of applications,
35:28
right? So what is that worth?
35:29
And in this situation where we're now in this like this
35:33
large space race against China and who's basically trying to do
35:39
plate everything that we do, yeah, you want this company to
35:42
succeed and you want to give them the, the financial
35:45
resources to get there. And it's not, you know, we we
35:49
kind of like to joke that and, you know, beat up on Starlink.
35:56
But in reality, I mean, as I've said before, you know, there the
36:00
company is big or sorry that the market is big enough for for the
36:02
2. And in a lot of ways, it's not,
36:05
they're not really adversaries. It's really, you know, China
36:08
that we're competing against, I think.
36:10
And if you look at like FCC chair cars recent comments, you
36:14
know, he views direct to sell as as a key area of focus and an
36:18
area that's important for US leadership.
36:20
But it's beyond that, right? It's not just the commercial
36:23
application, but it's also the applications on the defense
36:26
side. You know, we talked about dual
36:28
use case that it enables, right? And so so, yeah, it's on the one
36:35
hand, we've got this like massive white space on the
36:38
commercial side, but now this defense side becomes much more
36:42
visible and the street can't ignore it, right?
36:45
And so research analyst, you know, institutional investors
36:50
when they when they look at the company, it's not just a cell
36:53
phone company, it's a defense company.
36:56
It's it's electronic warfare, it's spoofing, it's jamming,
36:59
it's backup GPSI think we're seeing that now in Iran, where
37:05
Starlink Starlink is now viewed as like this this this light of
37:10
freedom, right? Where obviously they're they're
37:13
having some you have you know, I ran with Russian technology
37:18
trying to jam people's access to it.
37:20
But but Starlink's fixed wireless business like that is a
37:24
is going to be or that is a very useful tool, right.
37:27
And so I think these companies that have dual use case
37:31
especially, you know, you talk about this thing about that
37:33
space is going to be vague. Yeah, more focus is going to
37:38
come to the sector and for what AST is doing, people are going
37:43
to have to adjust the way, you know, adjust the lens at how
37:46
they analyze the company. It's not just commercial
37:50
business, it's not just this big swath of spectrum.
37:54
Legato for the some of the parts analysis, you know, I think some
37:57
people have questioned like, well, isn't 40 billion a lot for
38:00
the smart cap? Well, let's see if if Legato's
38:02
worth 12 or 15 billion. And so you've got like 30 left
38:07
or 25 left and that's how you value the commercial and
38:11
military business. No, I don't think it's that.
38:13
I don't think it's, I don't think it's unreasonable, right.
38:18
And so funny enough, like when people would value Echostar,
38:23
people wouldn't ascribe that much value to the spectrum
38:26
until, until Charlie, of course, he had to sell it.
38:28
And then all of a sudden Starlink, AT&T paid out for it
38:31
and and else Echostar is trading really well, obviously
38:34
personally, because, you know, it's a proxy for SpaceX given
38:37
the shares that they received. But but yeah, I think I think
38:40
now with this news and and we expect more news.
38:45
So this is the first award, you know, SHIELD award for Golden
38:48
Dome. As I mentioned before, I think
38:50
there's going to be another one coming.
38:52
You know, I'm not sure about the timing.
38:54
Maybe it's maybe it's a few days, weeks, I'm unsure, but I
39:00
am certain that we are going to get additional business and
39:04
yeah, the market's going to be surprised just like it was
39:06
today. So it's funny enough, like while
39:10
I'm speaking, of course, someone by the way, like Seeking Alpha
39:15
is a is kind of a trash website. Like they have all these
39:20
different contributors who I don't think they really add
39:23
value just like Stone Fox Capital or friend, but they put
39:27
some pretty bad takes in this this I guess this firm or this
39:31
person Pythia Research just puts on the AST space mobile reality
39:36
check. So oh and let's see here.
39:40
One of their one of their things is American Tower sold 2.28
39:44
million shares pre launch, signaling valuation driven risk
39:48
management despite retaining .84% economic stake.
39:52
OK, well I've covered this before.
39:56
I'll just make a quick comment on this part.
39:58
Like American Tower, I don't know if you guys have seen these
40:00
tower companies, but they've all been their stock prices have
40:03
been going straight down after Echostar pulled their build out
40:08
of their network. People become pretty bearish on
40:11
the towers because now you don't have a fourth player that's
40:15
spending money on towers and and stock prices have suffered his
40:18
result. And then of course, I think now.
40:22
And Iridium faced this before, but I think now the market is
40:24
starting to price and risk that supplemental coverage from space
40:28
is going to really put a crimp on tower companies.
40:31
And so as a result, you know, American Tower did sell a part
40:34
of their stake, their Class A shares, but they still kept
40:38
Class B shares. And so I think it was just, you
40:42
know, like smart financial planning.
40:43
The company's under quite a bit of pressure.
40:46
We just take a look, they've got 1.9 billion of cash, but then
40:52
they've got 45 billion of debt, right?
40:54
So they, they raised some money from selling some stock, which I
40:57
think is was a good thing. But but yeah, all these tower
41:02
companies, whether it's American Tower, let's see, Crown Castle
41:06
or SBA, they've all been taking out in this year.
41:10
We saw something similar to Iridium too, where I think
41:14
investors for the most part kind of dismissed and Iridium
41:16
dismissed supplemental coverage from space.
41:19
And then one day people also became smart to it.
41:22
And then Iridium went from like $40 to I think like $19.00 now.
41:27
Yeah, $90.00. So So yeah, life comes at you
41:31
pretty fast. And so I think I think for
41:33
American Tower, who's a great strategic partner, early
41:36
investor for them to sell part of their stake and made a pretty
41:38
hefty return, I think yeah, you can't really fall from for that.
41:44
But let's see. So I'm going to see if there's
41:48
any questions or comments. I've been speaking now for 45
41:54
minutes. Let me just look here a tut
42:03
capital. I read a sub stack that golden
42:05
Dome was hopium carried a comment pumper.
42:09
Yeah, it's not opium, I guess. Yeah, I guess I'm a pumper.
42:14
He's he's making a joke about alterations, which is funny.
42:18
You know, it's like, I guess I'll just comment on this.
42:21
It, this is something that we should all expect as a company,
42:26
you know, executes and like moves up in terms of evaluation.
42:29
There's going to be people that come in and think that they can,
42:34
you know, they, they come in with like some new angle or view
42:37
to be short. And this is something that, for
42:41
example, Tesla experienced for many years, right, where I think
42:46
people were the, the short sellers looked at near term
42:49
fundamentals like valuation. And hey, you can't justify the
42:53
company's valuation based off of this coming year or the year of
42:56
year growth or any of that stuff or margins.
42:58
But then, and they would, they would short and they would get
43:01
run over, right, Because they couldn't see the bigger picture
43:04
or they couldn't think beyond that, which I, I always talk
43:07
about this, how hedge funds tend to, well, they have to manage
43:11
their book on a day-to-day, week to week, month to month basis,
43:15
right? And so they can't really think
43:17
in terms of even quarters now or years or multiple years.
43:23
They were just focused on their right now.
43:24
And so when you're, when you're kind of geared to do that, then
43:28
you, you tend to miss the forest from the trees, which is, you
43:30
know, I posted a, a video today that someone else had shared
43:35
where obviously, you know, there was this like news reported on
43:40
who was skeptical about Amazon. And, you know, some of the
43:43
criticisms back when Amazon was losing money back in the 90s is
43:47
that they would have to sell every single book on earth in
43:50
order to try to profit. Well, lo and behold, like that
43:53
was the, the common view. Whereas of course Amazon moved
43:58
beyond books. They started selling everything,
44:00
right? And then they moved into, you
44:03
know, outsource infrastructure, which is AWS and all these other
44:07
other areas because of basically like pieces of business that
44:10
branch that branched out from what originally they were doing,
44:13
which is kind of like what AST is doing.
44:15
Or you know, you can make the analogy of NVIDIA 2, which is
44:19
moving from graphic processors, those processors being
44:22
applicable to other applications.
44:24
And so our satellites providing broadband connectivity to mobile
44:29
phones, but then, you know, using the satellites to do
44:34
detection and radar, right. And so, so I think like as we
44:39
kind of move along this journey, you're going to see more
44:43
skeptics come out high profile shorts.
44:46
And I'm I'm hoping that that's the case because that's always
44:49
fun. But yeah, these people come out,
44:52
they often like, don't they, they kind of see this retail
44:57
community from the outside and assume that it's just a bunch of
45:00
crazy people that don't worth it doing and, and that it's, it's
45:04
just a meme. And they, they come up with like
45:07
the same tired, you know, short thesis points of companies are
45:12
of value. There's no adoption.
45:14
There won't be adoption or a big Tam.
45:17
And you know, they won't even, they won't even address like the
45:19
military side 'cause they probably don't understand that.
45:23
And then they'll come up with the same stuff and, and then
45:25
they'll get beaten up and then no, they'll lose some money,
45:29
they'll cover and then we'll move on, right.
45:32
They'll be on to the next cohort of short sellers who think
45:35
they've got, you know, some new angle and, and that they're
45:38
smarter than retail. So so yeah, this is just going
45:41
to be part of the normal life cycle, this or this journey of
45:45
this investment where there's going to be new short sellers.
45:48
They're going to some might actually come with like some new
45:50
ideas. I mean, like this guy
45:51
evaluations, he kind of cooked up the same old arguments, but
45:56
then really came out it from the bean perspective, like, oh, this
45:59
company is these these investors are are a cult.
46:02
And so I'm going to take them down, right?
46:05
I'm going to scare the shit out of them and make them, you know,
46:08
sell the stock down and then I can cover which I would say like
46:12
the day the old days of smash and grab short sellers, like
46:15
those are long gone, right? Like people are so much smarter
46:18
now, like the, the times when you would have activist short
46:22
sellers like Kerrisdale or, you know, some of these others who
46:26
would put out sensational stuff, hope that the stock goes down
46:29
2030% and then cover their position.
46:31
Probably cover like after a 2/3 of the position on that first
46:36
day of trading and make most of their money.
46:38
And then, you know, they might publish one thing here or there
46:40
later. But there was always this like
46:42
specter that they're still out there and they could come out
46:44
with more stuff, right? But the great thing is like, if
46:48
you've been following this company for five years and
46:50
you've been through every single up and down and, and you
46:54
understand the thesis, you know what you own, you know the other
46:57
side's arguments to a tee, then you can't be shaken from the
47:01
investment. And if anything, I mean, it's
47:03
always good to hear the other side.
47:04
But yeah, you just build your conviction.
47:07
And so anyway, I think, I think like, yeah, it's, it's just part
47:14
of the normal journey. And, and you know, we'll see
47:17
what happens tomorrow and in the coming weeks, months and years.
47:20
But I do, I do wholeheartedly believe like this year is the
47:24
year for space investing. Like we're in the right place at
47:27
the right time. It's a clear area of focus for
47:29
this administration and Golden Dome $151 billion to deploy this
47:37
protective network that's going to require a bunch of
47:40
satellites, going to require a bunch of people working
47:42
together. It's going to be good, right?
47:44
And there's only a few public companies, a few different ways
47:47
to play this. And there's going to be, you
47:49
know, I hate to read it earlier today.
47:51
I think there's like four or five space focus ETFs that are
47:54
about to come out. And so, yeah, it's almost like,
47:59
I hate to say it, but it's like the early days of crypto when
48:02
when there wasn't much focus. I mean, you can if you were to
48:06
tell people you're invested in space companies in 2024, people
48:09
would laugh at you. But but now it's like the
48:12
companies that were invested in are the, are the top performers
48:16
for 2025 and they've already started for 2026.
48:19
So anyway, I'm rambling now. I'm going to, I'm going to end
48:22
the space here. It's been 50 minutes.
48:26
But yeah, I'm I'm looking forward to.
48:28
I just got back from a restaurant for a closing dinner.
48:31
I had like a few glasses of wine.
48:33
I was quite happy. But I haven't even had much time
48:36
to digest this stuff. So I'm going to do some reading
48:38
this evening and we'll see what happens tomorrow.
48:41
Maybe some news will come out overnight and maybe I'll do like
48:44
a quick morning space before trading opens.
48:47
So anyway, thanks everyone for joining.
48:51
Yeah, today is a great day and looking forward to seeing
48:57
hopefully PR from the company or not.
48:58
If not, that's OK. And yeah, we'll go from there.
49:02
All right. Thanks everyone.
49:05
Thanks for listening to the AST Space Mobile podcast.
49:09
If you you enjoyed this episode and you'd like to help support
49:11
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49:18
To catch all the latest news about AST Space Mobile, make
49:21
sure to subscribe. Thanks again and I'll see you
49:24
next time. We're doing something very, very
49:30
big, and I think with this technology we can really affect
49:33
billion lives. AFT Space Mobile is the only
49:36
company that has proven technology to deliver cellular
49:40
broadband connectivity directly from space to the everyday
49:44
smartphone. People will just basically turn
49:46
their phone and be seamless, regardless of where you are.
49:49
We don't want the user even to know that it's connected by
49:52
satellite. Our role is to bring this into
49:56
reality, always in partnership with the MMO.
50:05
Listen, Waffles.