Latest / AST SpaceMobile Podcast / Kook's Weekly - September 29

Transcript

Kook's Weekly - September 29 · AST SpaceMobile Podcast

0:06
This is the AST Space Mobile podcast.
0:10
Where we just basically from the phone be seamless, regardless of
0:14
where you 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.
0:29
OK, everyone, sorry for the late start.
0:32
We got to figure out how to negotiate NFL schedule,
0:35
especially for people on the East Coast.
0:37
But I guess we're not going to have overtime every time.
0:39
That was a pretty amazing game, so let's get into it.
0:43
I think we're here for the AST space, mobile spaces, but I'm so
0:47
tired. Honestly.
0:47
It's like, are we talking about open door?
0:50
Totally fried? I just got off a flight from New
0:53
York and now I'm back away from New York.
0:57
But we had a big week last week. We started off with a really
1:03
exciting court hearing where the Legato deal was confirmed and
1:09
now people are going to say, well, was it actually confirmed?
1:12
And no, it was not. But the judge agreed to confirm
1:16
it. And then that order confirmation
1:18
were actually came through today.
1:21
Tanner posted it and I saw while I was in the air.
1:26
And So what does this mean? So the Legato deal I think is a
1:30
Seminole transaction for this company and it's part of the
1:34
Chapter 11 bankruptcy. Legato couldn't pay its
1:39
commitments as they came due. Legato owes Inmarsat money in
1:44
order to use the L band spectrum in the US.
1:47
It had a big payment coming up. It wasn't able to meet it.
1:50
It filed for bankruptcy. As part of the bankruptcy, AST
1:53
Space Mobile stepping in to Legato's obligations and it is
1:58
advancing $520 million which will be paid onward to Inmarsat.
2:05
And then on a running basis there'll be $80 million a year
2:08
of lease payments for AST Space Mobile to enjoy the benefit of
2:12
45 megahertz of mid band spectrum, which is some juicy
2:18
stuff. So in a bankruptcy there's
2:20
always the potential for fights. In this instance, it was
2:25
actually a pretty smooth bankruptcy as as far as things
2:27
go. It basically had 100% of the
2:30
stakeholders vote yes for the plan.
2:32
In August, there was a little bit of drama in Marsat tried to
2:36
write in a non compete into the deal, which would have meant
2:41
that AST would have been prohibited from pursuing S band
2:45
spectrum outside of North America.
2:50
There's no way ASD space mobile would have done that.
2:53
They would they would not have limited the scope of their
2:56
system to the US with respect to those spectrum bands.
3:03
And Inmarsat had every reason to try to write this in the court
3:09
testimony was actually very revealing and there's what's
3:13
called an adversary proceeding docket as part of legato docket.
3:16
So basically think of that as like side fight or like a side
3:19
quest that's part of the main quest.
3:21
And that little side quest was actually very revealing because
3:24
what was put into all the briefing documents was quite a
3:28
lot of information that we hadn't necessarily seen before.
3:33
But it's always very interesting to me to hear competitors talk
3:38
about ASD space Mobile in an honest way.
3:43
And so in court, where you're fighting for your life in Marsat
3:46
is going to be very honest, and ASD Space Mobile's going to be
3:51
very honest. And here in the two legal teams
3:53
fight really revealed, what I think a lot of us already knew
3:57
is that ASD Space Mobile is the disruptive juggernaut that, like
4:03
a boulder barreling down on Indiana Jones, is looking to
4:07
smush and destroy all legacy players.
4:10
And that is certainly how Emersat came across in these
4:14
court hearings as a legacy player just desperately trying
4:17
to hold on, but seeing the boulder of ASD space mobile
4:22
bearing down on it. So the good news is the
4:25
bankruptcy did get confirmed. The judge agreed just to write
4:27
in the contract exactly the language that the parties had
4:31
agreed to. I, I tweeted on this topic a
4:34
couple weeks ago and really just said, you know what guys?
4:39
This doesn't seem like a dispute we have to settle right now.
4:43
Are you launching an international non Geo stationary
4:47
satellite system today? And the answer is no.
4:50
Well, when AST goes and does that, let them fight it out
4:55
later. And that was a good decision by
4:57
the court. We talked about that.
4:58
So anyway, we got confirmation. And so from here, what does that
5:02
mean? Means the plan is done, done.
5:04
The only things left for the plan to go, what's called
5:07
effective is going to be the receipt of the FCC approval.
5:13
So Legato and AST and actually Inmarsat is compelled to
5:16
positively support the application.
5:19
These parties are going to submit a application to the FCC
5:23
for Asts to use this L band spectrum.
5:27
Now I would imagine this gets filed fairly shortly.
5:30
They've had all the time in the world to be preparing this
5:33
application and I'm sure that we have quite a few people on the
5:36
space mob that are going to be looking around for this filing
5:39
and I'm quite excited to see it. That filing is going to go in
5:44
front of Brendan Carr. I'm sure it will have a comment
5:46
period and a counter comment period and the timing of such
5:52
approval is really anyone's guess.
5:53
What's good is that we don't need it tomorrow because we're
5:57
building our low bound satellites initially and the mid
6:02
band satellites will be built later.
6:04
This goes a little bit contrary to what we thought about in
6:07
terms of the the tail, the payload, the PLM payload launch,
6:12
whatever it's called that is appended to FM one, FM 2 and the
6:18
subsequent FMS. When I thought about it more
6:21
today, I go back to maybe the PLM really just being extra
6:25
solar power. Maybe there's some other payload
6:28
on there, but I don't think it's L band.
6:30
That's kind of my current thinking, but it's really kind
6:32
of not a big deal in terms of that.
6:34
Just wanted to talk out loud. So then we have people like
6:39
Kevin Mack say kind of out of the blue.
6:43
You know, it's like the meme where it's like no silence.
6:47
Kevin Mack Well, actually, you know, this last stock surge was
6:53
just frock thin. Everything's efficient.
6:55
And so just go kill yourself because it's not worth it.
6:59
And I'm being a little bit severe.
7:00
Kevin Mack I actually like him and values counsel, but he's an
7:04
easy target because he's a professor.
7:06
And so he said that the legato bump, quote UN quote was largely
7:10
noise driven and that the market's efficient.
7:15
What else do you say? Something else that just made my
7:17
blood boil basically to the effects of everything's priced
7:23
in. So I don't agree with this and I
7:29
think there's nuances to it. And so Kevin is saying that the
7:34
market is aware of Legato and it's priced in.
7:36
And so the confirmation hearing result should not have driven
7:41
the stock price. What I disagree with on the 1st
7:43
instance is that with AST Space Mobile specifically, as TUT
7:47
would say, it lives in a glass house like we've never seen
7:51
before. And frankly, there was some
7:53
uncertainty. And so thinking about in August
7:55
with the Inmarsat battle, I really studied that hard.
7:58
I, I spent the entire plane ride.
8:00
I go back and forth East Coast a lot.
8:02
I spent an entire plane ride re studying that docket painfully
8:07
and I thought both sides had reasonable arguments on that.
8:13
And if the judge had decided in favor of immersat boy, I don't
8:17
know what AST would have done. It's very valuable spectrum.
8:20
But this is all to say that until that gavel strikes, I
8:25
think that there was going to be a risk element in the markets
8:28
understanding of the Legato deal.
8:31
And now you have a confirmed plan.
8:35
So no matter what the odds were in the market, they were not
8:39
going to be 100%, even though in my view, they should have been
8:41
in the high 90%. And so the the confirmation or
8:47
or the see, we didn't even get the confirmation or that's going
8:49
to hit next week. The statement that you would get
8:52
a confirmation or when you think about it, that wasn't press
8:55
released. That was, you know, a couple of
8:57
us on the space mom dialing into the court hearing and tweeting
9:01
it. I don't think that was widely
9:04
disseminated. And so then you think about the
9:06
distressed world, surely things like reorg research, I'm
9:10
assuming that's still around, would have been blasting that
9:12
around to the street that there was a successful confirmation
9:15
hearing. But there's not even that many
9:17
claimants of Legato. It's so tightly held, you know,
9:20
among like 5 funds that I don't even know who would have been
9:24
listening, let it alone doing the work to really understand
9:27
it. But even if you take Kevin Mac's
9:31
most extreme view, he'd say, well, it's priced in.
9:33
And you'd say, well, sure, even if you say the market is
9:35
efficient, the market prices things in ingredients.
9:40
And so I think Kevin Math was kind of silly because if you
9:44
take my view that the spectrum is worth at least $20 billion,
9:47
then in theory, if the deal had not been consummated, ASTAS
9:51
should have jumped to zero. Well, obviously that's not true.
9:55
And the corollary is that just because the gavel struck this,
9:59
should the stock go up from, you know, whatever the undisturbed
10:03
price is by an extra $50, we'll also know because it's not,
10:08
first of all, a totally fungible asset.
10:10
Just because they won the deal doesn't mean that tomorrow they
10:13
can flip, flip it around and sell it to someone else for $20
10:16
billion. That's actually the point.
10:18
There was probably only one buyer of this asset because
10:22
there's only one company with the technology to monetize it.
10:25
So in that respect, when you start to go down this joint path
10:28
dependency element where the value of Legato can only really
10:32
be accrued to one party in that space, mobile and that one party
10:37
still has a lot of if statements to flip as well.
10:40
We need to get the satellites in the air.
10:42
We need to do all sorts of things to then monetize the
10:45
spectrum. But this goes to my more
10:47
simplistic view. So is Legato priced in the
10:51
stock? No.
10:54
There's a lot of unlocks remaining that will ultimately
10:57
unlock what I believe is going to be far in excess of $50 per
11:01
share. But the market in my view, I
11:04
vehemently disagree that the market has priced this in.
11:07
Now are the remaining risks and discount factors that would
11:10
result in people being able to take two sides of this argument?
11:13
Absolutely. But if you take sort of a path
11:18
dependent view of this will be successful, then the upside of
11:22
this asset is not reflected in the stock.
11:24
And so we could split hairs a little bit.
11:27
You could say, well, kook, you're really saying that the
11:29
market is efficient because it's discounting things for
11:32
appropriate risks. Yeah, I'm also taking the view
11:35
that I know more than other people and that my view of the
11:38
risk is different from the markets.
11:39
And as that resolves itself, I will get a return far in excess
11:44
of the risk adjusted return, blah, blah, blah.
11:47
Who cares? This is why I'm not a professor.
11:49
This is why I run a prop book that violates every single
11:52
semblance of risk control because I'm thinking like a
11:54
founder and just basically going balls along this thing and doing
11:59
the work, but also praying. And this is what's fun about
12:04
doing what I do is you wouldn't be able to invest like that if
12:06
you worked at a hedge fund. You'd have to be thinking about
12:08
all these little things like, oh, is that what I'm going to
12:11
ship next week? You know, what's my, you know,
12:15
forget the Citadel terminology, the monetizable volatility, the
12:21
someone that knows their response pretty well.
12:23
I'm blanking on it because it's just not how I'm going to think
12:27
in this instance. But it's a fascinating topic
12:30
about is the market efficient and can you see the evolution of
12:35
a company versus the static picture of a company?
12:39
And I think that's where I've really grown as an investor from
12:42
the age of 22 when I was kind of an idiot, a smart idiot, then to
12:48
today where I think I'm a dumb smart guy.
12:52
And I think there's a really big difference of kind of embracing
12:54
being dumb. But but that itself is, is a way
12:57
of being really smart is I'm taking a bet that there's going
13:00
to be a lot of evolution to this company versus what you see
13:04
today. I think that Legato is a great
13:07
example of that. You have a company that's
13:08
clearly being aggressive on spectrum holding strategies.
13:12
What will they buy tomorrow? I don't.
13:16
Will they buy something tomorrow?
13:19
Yeah. So there's some value in this
13:22
company as a platform company. Famous last words when when
13:25
people start talking about platform companies, they go
13:27
right back to Ackman talking about Valent Pharmaceutical.
13:31
That was like a, you know, when people start talking about AST
13:35
Space Mobile as the global spectrum consolidating platform
13:39
and every person on Wall Street loves this thing and the stock
13:42
is $750, maybe it's time to move on.
13:45
But I think we have a long wait till that mentality comes.
13:47
But you can see the footprints of what is to come.
13:52
So for example, the ITU rights, those close this week as well.
13:56
The trap is set. So when taking into context the
14:00
dispute in Legato case of Inmarsat versus Legato versus
14:03
AST Space Mobile about whether or not AST is prohibited from
14:07
pursuing SPN rights outside of the US.
14:11
And ASTS is adamant that they are not prohibited because
14:15
again, why in the world would they citing that this ITU
14:19
prioritization rights show their hand.
14:24
What is what do they get from the IT rights?
14:26
They don't get spectrum, but they get a priority stance with
14:32
the UN to not have to coordinate with people, but in fact of
14:38
other people coordinate with them.
14:40
And what's so scary for Inmersat, and this is actually
14:43
laid bare in the bankruptcies. Inmersat has a lot of spectrum,
14:46
but it's used for narrowband applications.
14:49
So think like ships. A lot of ships will have a
14:52
narrowband satellite system to, you know, do basic stuff.
14:57
I know a lot of ship owners ironically.
14:59
And so I've talked to him about this and in a very unhappy with
15:01
these Mr. Set systems, they were actually really like to have AST
15:04
Space Mobile because a big part of keeping a happy crew is
15:08
having them have access to their phones so they can talk to their
15:10
kids, not surprisingly. And so Mr. Set knows that
15:14
they're not utilizing their spectrum and so AST Space Mobile
15:18
can come in and with their priority rights, show that maybe
15:23
they're not going to have the same priority as Immersat, but
15:25
they're also not going to interfere with Immersat.
15:29
Instead, they'll be able to coordinate around Immersat and
15:32
therefore get access to Spectrum and monetize it.
15:37
This is where the AST Space Mobile spectrum holding company
15:41
strategy starts to take form in the years to come.
15:44
And this could be worth, to quote the great Abell, this
15:48
could be worth a price no one can afford, which is to say it
15:52
could be worth a lot. And I get really excited about
15:54
it. This is a little bit more
15:55
distant. And so this is sort of the Abell
15:58
becoming, you know, an individual who can be worth $100
16:01
billion type story. This is too far out for me to to
16:05
worry about. But I do like the fact that this
16:07
upside is now existing for us because you always want to have
16:10
someone that's quote UN quote next in the trade.
16:12
Let's say for for some reason my wife hijacks my account and
16:17
forces liquidation of my stock at some point.
16:21
Well, it's very important that someone buying the stock from
16:23
her at $300 believes that it's worth 600.
16:27
The story cannot end at 300, otherwise it will never get
16:30
there. The the strategy they're
16:33
undertaking right now starts to unlock a type of upside that is
16:37
uncapped and far beyond the upside we could have imagined 4
16:41
years ago. Or at least that I imagined 4
16:45
years ago. And then we have another tweet
16:47
by I think this was Socrates was interesting tweet because it
16:51
really struck home for me because I also think this is
16:54
what's going to happen. And so he tweeted just kind of
16:56
out of the blue, ASTS and Amazon Kuiper teaming up.
17:00
AST brings L band plus carrier integrations.
17:03
Kuiper brings KA band broadband and ADWS edge and Blue Origin
17:08
provides the launch. OK, well, this didn't happen,
17:13
but which is an important thing to clarify up front.
17:17
It's like people that are having a heart positive heart attack.
17:21
I think you wait what? Amazon just teamed up with AST
17:23
Space Mobile. Not yet, but when you think
17:27
about it, it, it really is a brilliant combination and would
17:30
answer the question of quote, congratulations on what?
17:35
So AST Space Mobile lacks the go to market channels for fixed
17:38
broadband. That would be tough.
17:41
They could do it through AT&T and Verizon in which would make
17:45
sense because it would be sort of in the triple play bucket.
17:49
But Amazon is going to have a great go to market for its
17:53
products with its yeah, obviously it's a great DSC
17:57
distributor. And they're going to have
17:59
Kuiper. And so they're going to be able
18:00
to put a lot of pressure on Starlink, but also they need to
18:03
get somewhere fast because Starlink already exists.
18:06
And so you can start to see potential tie UPS.
18:10
Now, if I overthink it, I could start to say, well, that starts
18:12
to be maybe in conflict with the M&O relationships because I'm
18:17
not sure if AT&T wants to see AST partner with Kuiper because
18:22
does that start to impinge on fiber?
18:24
I don't know. But at the end of the day, you
18:27
can really see a lot of reasons why a Bell and Jeff Bezos have a
18:31
lot to talk about. Blue Origin specifically needs a
18:35
lot of cargoes to underwrite it's rockets and that's the most
18:39
obvious combination that I could see because you can start to
18:43
very quickly synthetically recreate SpaceX and that's a
18:50
valuable thing. So just always have that out
18:53
there when you're thinking about, you know, what sort of
18:56
strategic tie UPS could occur. Are they interesting?
18:58
Is there latent value in your investment that could be
19:02
unlocked and be very obvious in hindsight?
19:04
You want to belong those things that are strategically valuable
19:08
and it's it doesn't take a lot of imagination to see where AST
19:13
in a heartbeat can be sort of a like ODA.
19:16
That was obvious type thing and I think it's strategic to the
19:19
world's most valuable companies. There was a chat we were having
19:22
earlier today about open AI. Should just buy AST or someone
19:27
made a comment on Reddit or I can't remember.
19:31
You had a ship? They need to build distribute AI
19:34
around the world. Space mobile is the way to do
19:36
it. Another interesting comment
19:37
someone made now that I'm thinking about it is Amazon has
19:42
wanted to deploy drones forever for delivery.
19:44
Makes all the sense in the world.
19:46
I remember a long time ago. This is a long time ago, 10
19:48
years ago actually. One of my friends worked at
19:50
Amazon and he said well what's your address?
19:53
I gave it to him and he delivered something to me just
19:57
immediately and I asked one, I was like, how in the world did
20:00
you do that? And he said, well, I just
20:03
deployed our drone. And so he was working on this.
20:06
This was over 10 years ago at this point in New York City and
20:12
and was instantly able to deliver something.
20:14
It was a just a beta test just showing it could work.
20:17
But the issue with that is Amazon needs to have positive
20:20
control of their drones at all times, and the existing cellular
20:23
network doesn't allow for that. And so you could see the immense
20:27
interest in having a broadband network like AST Space Mobile
20:30
for drone operations. I'm assuming this this same is
20:33
going to be true for a humanoids and certainly all the autonomous
20:37
applications people are thinking of.
20:39
Every time I look at updates in the defence industry with what
20:44
people are trying to do, it comes down to being able to have
20:49
tracking command and control of your assets.
20:51
ASTASTS Mobile is centered to that.
20:56
So long way to say those are random speculative tweet by
21:00
someone that had no bearing in reality, but it could be good.
21:04
So we also let's do a quick regulatory check in.
21:07
Kevin's doing a really nice job of just giving us some updates
21:10
from time to time, like little postings of hey, remember this.
21:13
And so we have the SCS application, which is our
21:17
service legs. So that's actually the
21:18
connection between the satellite and your phone, which is
21:21
important. That was accepted for a review
21:26
we're not accepted for. That was accepted for filing on
21:28
September 5th. The comments are due next week,
21:32
October 6th and then everything must be wrapped up by October
21:36
23rd. So this is something that is a
21:39
very important filing and we're starting to get into the, you
21:44
know, the meat, the meat of it in terms of the docket activity.
21:47
And I'm hopeful that this has timely approval this year.
21:53
I think this could be certainly a big event for the M and OS.
21:57
This provides the last link because we have the backhaul
22:00
approved for the next 20 satellites.
22:03
And then this will be the front hall and really be the
22:05
culmination of frankly an unbelievable turn of events from
22:09
the regulatory risk perspective. If you remember when AFTOS was
22:12
born, the rules for its service did not exist.
22:15
And many bears who again, look at a static picture and not a
22:19
dynamic picture of where things will go said, well, this will be
22:23
done on arrival. There are no rules to
22:25
accommodate it. And then they literally wrote
22:27
the rules for ASD Space Mobile. And now we're having our
22:31
application against those rules, which is exciting.
22:34
And I have every confidence that they'll be approved.
22:39
So now let's move a little bit to just what's going on in the
22:41
world. Russia is really an obnoxious
22:46
military power, as it turns out. And what we have just in the
22:50
news all of the time is just more and more space, this
22:53
defense spending because of Russia.
22:56
And so Germany is upping their spending to €35 billion.
23:02
But also this week, the US deployed its AWACS, which are
23:07
mobile radar airplanes. And that's really just to detect
23:14
stuff from Russia. And so this really just
23:17
underscores the use cases for non communication applications.
23:22
We heard Scott this week talk about this.
23:25
He said that there are 10 government programs that he
23:28
feels there's a very good fit, including communications and non
23:32
communications. And they're so excited about
23:35
this that they're talking about their capacity of 6 satellites
23:39
per month, not only being tied up through ongoing build out for
23:43
government work far beyond what's going to be needed for
23:46
the maintenance, replenishment of their satellites, but in
23:49
fact, laying the groundwork for the capacity to build 10 to 12
23:53
satellites per month to meet government need.
23:57
Whoa. What is the size of our
24:01
government business going to be? Inquiring minds would like to
24:05
know. So then we have Golden Dome.
24:11
I think it's happening. So Scott, in that same
24:13
presentation, which was with B Riley just openly talks about
24:17
Golden Dome and about how they're really well suited for
24:20
it. And then meanwhile, we have AST
24:24
having job listings that look very specific for Golden Dome.
24:30
And so when you run these job qualifications through Chechnya
24:34
PT, just to check to say, what is this?
24:37
What does this look like? I tried to, I ran it
24:40
specifically, Hey, is this a golden Dome one?
24:42
And then I ran it specifically for just like, what is this
24:44
without leaving it. Granted, I know that open AI has
24:47
some memory, so it would know where I'm going with this.
24:49
But but AI sees sees this very clearly.
24:53
And some other experts that kind of responded in the comments
24:57
noted some of the clearances and things like that are not readily
25:01
handed out by the US government. So you're not hiring for these
25:04
roles with people with these clearances unless you already
25:09
have a stated need for them. So we know and it really should
25:14
be the least controversial thing I say on any spaces.
25:16
We know that ASC space mobile is very deep with the US military
25:20
and we're just getting hit with more and more facts that show
25:24
that that's accelerating and the the general scale of that.
25:29
On a related note, Firstnet, so there's a final one at Duval on
25:34
this next comment, but there is a thought that the first net
25:36
budget closes on the 30th of September.
25:42
So they have AQ three annual filing and one would think that
25:47
they need to commit their budget.
25:49
I don't know, I hope, but hope isn't a strategy.
25:52
But meanwhile, we have Vodafone starting to offer services in a
25:56
first net style in Europe. And it's very exciting because
26:00
the success that AST has had on a regulatory front with Band 14,
26:05
which is the first net spectrum. And then what we believe is
26:10
going to be incredible uptake of first net use of space mobile
26:15
that should be replicated around the world.
26:17
And so we've had some early success with Singapore, I
26:19
believe. And then Vodafone is recreating
26:22
the same thing in Europe, which is very exciting because it's
26:24
just more base load demand we're going to have against our
26:27
network, which isn't always tying up usage, but should be
26:32
getting very premium Arpus and potentially capacity payments.
26:37
So just increase visibility on how we are going to monetize our
26:42
network. And again, as Scott reminded us
26:45
in his chat last week, this is a company that knows how to
26:49
generate revenue. They are not science only
26:52
people. They're very commercial and
26:54
that's been pretty evident from the get go.
26:57
And very important for us, we don't want an R&D experiment.
27:00
We want technology that is readily monetizable with a sales
27:04
team that knows how to monetize. And it's nice to see them
27:09
consistently reminding us of us. So let's quickly take a little
27:13
walk down GPS lane. I was pointed in the direction
27:19
of this company Nextnav this week by Tanner, who noticed that
27:23
the backer of Nextnav, which was a SPAC was also a backer of the
27:29
company. We bought our IT prioritization
27:32
rights. So call this a interesting
27:36
clinky dink. And so Nextnav has spectrum.
27:40
I believe it's 10 by 10 megahertz, might have been 10 by
27:44
15. And so they have this spectrum.
27:47
And what they're trying to do is partner with M and OS and then
27:50
use a sliver of that spectrum to provide backup PNT services.
27:56
So again, PNT is GPS. So it's interesting to go
28:01
through the next NAV presentation.
28:02
This company's worth $2 billion and they're going through the
28:07
case of what providing Agps complement services and they
28:11
believe it's a $15 billion market.
28:14
Now I don't, I don't know who the payer is of that.
28:19
It's interesting question and and time will tell.
28:22
But I think what we know is that the, the military is certainly a
28:26
capacity payment payer of this. You could see a lot of federal
28:29
agencies wanting to pay to have this service, FAA obviously
28:35
being one, First Net arguably being another.
28:39
And it's an interesting market. It should be very easy for us to
28:43
enter. If people remember, AST Space
28:46
Mobile is actually very active in the PNT docket where the FCC
28:51
is soliciting input and ideas on how to address this incredible
28:55
vulnerability that the US has where we're reliant on the GPS
28:58
system, which is vulnerable to jamming and spoofing, these
29:03
sorts of things which we've seen in real time, the consequence of
29:06
because of Russia and, and we ourselves weaponize this when
29:11
launching attacks, for example, on Iran, we destroyed their
29:15
ability to track things. And so this is very much a
29:19
dynamic part of the market. And ASTS is definitely in the
29:23
middle of it, not a hypothetical statement.
29:25
There is a docket where they explain to the FCC how their
29:32
technology can be used. And we've had some other people
29:36
post some of the patents that they filed, which show how they
29:39
can create a jam proof and spoof proof system as well.
29:44
So just putting that there if people wanted to get a little
29:46
bit smarter on the PNT opportunity, if nothing else is
29:49
so that you're not surprised by it when in my belief, not if
29:53
when it hits for AST Space Mobile, the the right response
29:57
will be not, oh, I should go out and buy the stock today because
30:01
of the PNT opportunity. If that's what's driving your
30:03
incremental decision, then that is peculiar.
30:06
But when they get a deal for it, the take away should be wow this
30:11
Tam is really big. Something with an acronym that
30:15
probably 1 out of 1000 people at most actually understand is
30:19
worth X hundreds of millions of dollars a year.
30:24
And wow, if that application is worth so much I haven't even
30:27
heard of it. And that's only one of 10 things
30:29
they're doing for the government alone.
30:32
Maybe these Leo 5G systems are pretty dynamic and pretty cool.
30:36
That should be your take away. And one of those things where
30:40
you go, well, if I'm right on this, I could have a Palantir
30:44
type multiple because the growth is so open-ended.
30:47
That's the thing where you could avoid some pain for yourself as
30:51
you start to get right on the thesis, but then dramatically
30:53
underestimate how far and would what magnitude the market is
30:58
willing to look at that opportunity in the future, kind
31:01
of store that little concept in the back of your mind for later.
31:07
So then we have commercial service at some point being
31:10
rolled out. And what's funny is listening to
31:13
Scott talk, you just almost forget, Oh yeah, we're going to
31:16
actually have a, you know, a solution to solve for dead
31:19
spots. It, it's funny in a way how
31:22
these government opportunities have surged to the forefront and
31:26
are of such high magnitude that the commercial story is not the
31:31
initial story. It's, it's going to be, I think,
31:34
somewhat stunning to people when they see the magnitude of these
31:38
government programs come in. But Scott did confirm last week
31:41
that there's a hundred people at AT&T working on this project.
31:44
There's 100 people at Vodafone working on this project, and
31:47
there's 100 people at Verizon working on this project.
31:51
So sometimes there can be some doubt.
31:53
Did Verizon bail? There's Fudsters who come in all
31:56
all over the place. Not only is there an FCC
31:58
application with the Verizon spectrum, but Verizon has 100
32:03
people working on it. The CEO in July said they have a
32:06
deal. I bet my life they have a deal.
32:10
And so that DA is coming. What ultimately is holding it
32:13
up, I don't know. I suspected that there are some
32:15
conditions preceding related to either the, the, the Block 2
32:21
satellites going up or the SCS approval, but that might not be
32:26
true. They might literally just be
32:27
slow and we'll find out. But the commercial segment is
32:35
going to be the second act of ASD Space Mobile.
32:38
The government story will come from.
32:41
We also had Kramer, thank God, say that our stock sucks.
32:45
I was really worried for a moment.
32:47
It looked like you actually said something positive about ASD
32:49
Space Mobile. And I'm so superstitious that
32:52
that actually would have gotten into my head.
32:55
But then he came out promptly and started bashing it.
32:58
So close call, guys, close call and then use the tweet by Kevin
33:04
about markets being efficient. I don't know if I have anything
33:07
more to say on this topic other than, you know, he just says
33:11
amateurs are making mistakes because we assume things aren't
33:14
priced in. I don't know.
33:16
I mean, if if he were just a professor, I'd just chalk it up
33:19
to him being a professor. But he actually runs a hedge
33:21
fund. So I don't really know he should
33:24
stick on this. But I do think that the market
33:27
doesn't do a great job of understanding knock on effects.
33:31
You just ask yourself how many people in the world spend this
33:35
many hours of their life thinking about this one stock?
33:41
There's there's not that many people that do that.
33:44
My friends that are big institutional portfolio
33:48
managers, they're like 40 names. They know their names well.
33:51
But this $20 billion company isn't that big.
33:53
Like, they don't really cover it, and it's so volatile that
33:57
they can't really size it. And so they kind of know it.
34:00
At most, they'll do a call and they'll call Verizon Investor
34:03
Relations and be like, hey, So what do you think about this?
34:06
They're like, yeah, we're working with them, but you know,
34:08
it's back up because our network is amazing.
34:09
Because if we said anything otherwise, you'd short Verizon
34:12
stock. Oh, God forbid.
34:14
And so I can guarantee you that the population of people that
34:18
really understand Space Mobile, it's like the Hennessy guys know
34:22
it. And then you have some, you
34:24
know, kind of the more hardcore smaller fund managers like Ryan
34:28
O'Connor, those guys will know it.
34:31
But then I don't know how deep that bench is behind that.
34:34
You know, I knew it really well, but I don't set the price.
34:37
I've been sitting on my stock position forever.
34:40
And so I've just fucked those shares away.
34:42
And I know a lot of people on this call kind of whip the stock
34:45
around, but you're also not that big either.
34:49
And so I, I don't know, I just don't think that people really
34:52
understand, for example, Legato, I don't think people understand
34:55
the IT rights. I don't think people understand
34:57
Golden Dome in depth. I think at this point maybe
35:00
there's an understanding that they might be involved with it,
35:03
but we'll see. I don't think the market's
35:06
efficient, but again, we'll see. So another thing the market's
35:11
not going to get right is talent density.
35:14
And so the most important thing I've I've seen as dispositive of
35:19
good is when smart people go to a company, companies.
35:23
And so I was actually meeting with a friend a couple days ago
35:27
who, who is an operator, which means as a real job works as a
35:31
software engineer. And we're just talking about
35:34
ideas. I was giving him some ideas of
35:36
things I, I've seen of companies that, you know, maybe he should
35:39
get work for because I think they're going up.
35:41
And he, you know, he made the point, you know, what he looks
35:44
for is talent density at companies, which is absolutely
35:47
what you should look for. And it's funny, a lot of
35:49
investors don't think like that because you're not in the
35:52
company building business. You know, a lot of people are
35:54
looking at TA and charts and things like that, and that's
35:58
what makes the market. That's also what makes an
36:00
inefficient market. But there this week, for
36:03
whatever reason, the hiring of Jr.
36:05
Wilson surfaced again. And this had happened a while
36:08
ago, but it was making the rounds again.
36:11
It's just worth bearing when you're starting to have some of
36:16
the most senior executives at AT&T responsible for their tower
36:21
business, leaving AT&T to go to AST Space Mobile.
36:26
Ask yourself why. What are these people seeing
36:28
where they're yellowing their life?
36:33
What are they seeing? I know what they're seeing, but
36:36
it is good to see that they see that too.
36:38
And good people want to usually work with good people.
36:42
And so if you have an inflow of talented execs, that just begets
36:46
more talented execs wanting to go.
36:49
And I think good investors understand that companies that
36:53
can attract great talent become dynamic and create more future
36:57
opportunity for profitable growth and product innovation,
37:01
which are things that are not generally reflected in a stock
37:04
price. Sometimes they can be reflected
37:05
over time in a premium multiple because of pattern of doing
37:08
amazing things as is as a result of really good earnings and cash
37:16
flow and growth. But sometimes I don't know if
37:19
people really unpack why the growth and profitability happens
37:22
and it's usually because of talent density.
37:26
On a related talent density note, we have Jennifer.
37:29
And so Jennifer was at a panel that she's our our spectrum
37:37
lady. She had been Echostar Jennifer
37:40
Manor and she just wrote a book. I was looking for it on Amazon.
37:42
Looks like you can only buy it off some UK website.
37:45
But she is the guru on our spectrum strategy, which I think
37:50
is going to be a incredible creator of value over the years
37:54
that right now will be a hidden asset, but will ultimately be
37:59
something people come to appreciate when they go.
38:01
Why is this company doing so well?
38:02
Why are M and OS giving Space Mobile such amazing profit
38:06
shares and things like that? It will be because of the
38:10
spectrum strategy that the company is pursuing, which is
38:14
bringing so much more to the table than we would have thought
38:17
just a couple of years ago. So we also have this last week,
38:22
second to last is just called Legato Overview and it's just a
38:26
nice little ChatGPT summary that Jonathan Cooper put out and
38:31
gives some valuation estimates. I always span the plane ride
38:36
today just tightening up my Legato work and I'll post that
38:39
at some point this week. I was doing some just cleanup of
38:44
of the deal so people have it also the cleanup of the price we
38:47
paid. Just so I can allay some
38:49
confusion when people are trying to compare SpaceX versus what
38:53
Asts paid for roughly similar spectrum.
38:57
One could say that the AST space mobile spectrum is better, but
39:02
SpaceX got slightly more of it. And I think it's important to
39:06
start to think through some of the math and you could see what
39:10
AST paid and the price involves a royalty.
39:13
So it's a little bit of a codependent price.
39:16
If successful, the price AST pays ultimately will be higher.
39:19
But hey, you know, the upside wouldn't have been available.
39:23
And then what I also thought about is just trying to put some
39:27
numbers on what the capacity of Legato is worth.
39:29
And so looking at the total data throughput, this is just the way
39:33
I've tackled this problem in the past, rightly or wrongly.
39:36
But I went through and looked at the spectral efficiency, the
39:39
spectrum reuse utilization, how many satellites you can have
39:43
deployed on it to get to the amount of data per year you'd be
39:47
pumping through a Legato spectrum And put a price on that
39:49
data to get to some general revenue numbers, which are very
39:52
hypothetical, but I'll put that out at some point.
39:55
I might just check with Katz to see if he's sees anything.
39:59
I might want to adjust on that. But Legato is going to be a
40:02
really big deal. And next week, we should start
40:04
the week off with a confirmation order that is signed from the
40:08
judge. We also have New Glenn.
40:11
It's getting up close and personal.
40:13
And so some cool videos of New Glenn coming out.
40:16
That rocket looks beautiful. They have a lot of upper stages
40:20
complete. And I think we're going to be
40:22
getting a launch in October of that.
40:25
I do not believe ASTS Space Mobile is on it.
40:29
But on that note, there was a very interesting comment that
40:31
Scott made at his B Riley presentation.
40:36
The analysts said was really trying to lead him into saying
40:39
that the launch on F for FM one would be sort of in November to
40:43
January, as per the ISRO comments we'd seen.
40:47
Scott really did an interesting forensic deflection where he
40:52
didn't really answer the question, but sort of gave a
40:59
smiling answer of we might or we will be happy with our result.
41:06
Really listening to these comments a couple times led me
41:10
to believe the satellite might have already shipped.
41:13
And so we will know that or we will not know that.
41:15
But I think the way Scott spoke about it, which was a very
41:20
peculiar way and that's what's great about hearing these
41:23
fireside chats, is people don't have the time to really think
41:27
through their response. You start to get some
41:31
involuntary limbic responses in terms of how people answer
41:34
things. And the way he spoke was curious
41:39
and almost like he knew something other people didn't,
41:42
which, God, I hope he does. He's president of the company.
41:46
But in that instance, it certainly seemed to indicate
41:49
that this might be sooner than we think.
41:53
So I'm cautious, cautiously optimistic, potentially waking
41:56
up tomorrow for APR. That FM one has flown the coop.
42:03
He said something, well, I'll tell you exactly what he said.
42:06
He said FM one will quote officially ship or people will
42:13
be relieved when it officially ships.
42:16
And so I, I think that kind of lays a lot of the confusion of
42:19
when they tweeted this out in August, it was ready to ship.
42:24
But the definition of official is pretty obvious, you know,
42:27
leaving the facility. And again, I, I really think he
42:31
was giving people quite a tell on this call last week and
42:36
overall the call was very positive.
42:39
In terms of another comment, like a normal company, they're
42:44
actually had to close out their books this quarter for revenue.
42:47
I will be very excited if they actually start to put up GAAP
42:51
revenue. They have the guidance out
42:55
there. The run rate, he did say that
42:56
they expected to be very quickly at a billion dollar run rate
42:59
into 2026 with a lot of that coming from government.
43:04
But I think the market will react very positively if we
43:07
actually see this company get out there with a 75 to $150
43:10
million gap revenue run rate and not just from the ground
43:14
station, base station sales, but actually using block one.
43:20
But we'll find out soon enough. So thanks for everyone for
43:23
joining me. I think we'll just keep doing
43:25
this while I'll push the spaces until the end of whatever
43:28
football game is going on so that I can accommodate everyone.
43:32
Even though it means a little bit later.
43:34
I think this result for me means I'm not surfing tomorrow.
43:37
We're getting some some hurricane effect down here.
43:41
So the surf is huge. But after having been out of the
43:43
water for a week and being super tired, probably the combination
43:47
of being out of the water for a while, weak, tired, and then
43:51
going and getting pummeled by some hurricane waves is probably
43:55
a recipe for drowning. So everything happens for a
43:58
reason. I will end it here and thank you
44:02
very much for joining and look forward to seeing some great
44:06
research here for the next week. So I have more things to talk
44:08
about audios. Thanks for listening to the AST
44:15
Space Mobile Podcast. If you enjoyed this episode and
44:18
you'd like to help support the podcast, please share it with
44:21
others, post about it on social media, or leave a rating and
44:25
review. To catch all the latest news
44:27
about AST Space Mobile, make sure to subscribe.
44:30
Thanks again and I'll see you next time.
44:36
We're doing something very, very big and I think with this
44:39
technology we can really affect billion lives.
44:42
AFT Space Mobile is the only company that has good technology
44:46
to deliver cellular mobile connectivity directly from space
44:50
to the everyday smartphone. People will just basically turn
44:54
their phone be seamless. But regardless of where you are,
44:57
we don't want the user even to know that it's connected by
45:00
satellite. Our role is to bring this into
45:03
reality, always in partnership with the MMO Listen.
45:19
Waffles.