Latest / AST SpaceMobile Podcast / Anpanman - Pentagon Over a Barrel: Why the DoD is Pivoting to AST SpaceMobile

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Anpanman - Pentagon Over a Barrel: Why the DoD is Pivoting to AST SpaceMobile · AST SpaceMobile Podcast

0:07
This is the AST Space Mobile podcast.
0:11
We just basically come your phone be seamless regardless of
0:15
where you are. We don't want the user even to
0:17
know that it's connected by satellite.
0:22
Listen, the opportunity that we have is very, very, very large.
0:27
Hey everyone, thanks for joining.
0:29
What? What an amazing day, amazing
0:32
week. It's going to be an amazing few
0:34
weeks, few months, rest of the year.
0:36
But but yeah, thanks for joining.
0:39
I I was on a space with Dagnum Pi.
0:41
What a cool name, talking about AST based mobile and and
0:45
defense, and I didn't I did talk about this order Reuters article
0:49
briefly, but I did want to go into more detail.
0:52
But yeah, thanks for joining. I wanted to cover a few topics
0:56
about AST and hope everyone had a great long weekend.
1:01
I know usually on, on days where the markets closed, I, I feel
1:07
pretty good about taking time off and spending it with family,
1:10
which is what I did this past week, but then, or this past
1:13
long weekend. But then given all the news that
1:16
kind of came out around AST and, and then, you know, seeing the
1:22
stock prices of the space companies overnight, I was very
1:26
anxious. I couldn't actually sleep
1:29
because I, I got to bed late because Kook, you know,
1:32
unfortunately it's like taking up an interest in hockey.
1:34
And so his base went till I guess it was like 1:00 AM and
1:37
then, and then I tried to go to bed.
1:39
And because I'd stayed up too late, I, it was hard to go to
1:43
bed. And so I just got up at, I think
1:47
I tried to go to bed at 1:30 and I got up at 4:30 or so and I
1:50
just had some coffee and I had a lot of things going on in my
1:54
mind. And so, so I'm operating on very
1:56
little sleep, which I'm sure plenty of you, you know, that
2:00
probably happens to you as well. I remember when I was working in
2:04
the hedge fund industry, if there was like ground breaking
2:07
news and it was a positive for My Portfolio, it would be hard
2:11
to sleep overnight. And so I would just wake up
2:13
early and go into the office 'cause just laying in bed and
2:17
just sitting there really didn't do it for me.
2:19
So, so yeah, I kind of went through that, but now I'm
2:22
operating on adrenaline. So, but yeah, there's a lot to
2:25
be excited about. So I, I do want to talk about,
2:28
Oh, and by the way, like if you have questions or comments, feel
2:30
free to drop it down in the, in the, in the space, the chat or,
2:37
or the comments below and I'll try to get to them.
2:39
Any questions or, or things that you want to say?
2:41
But anyway, so big piece of news that came out today from
2:45
Reuters. Obviously you've got to take any
2:47
reporting from mainstream media with a grain of salt.
2:50
But this morning there was this article from Reuters talking
2:54
about how the Pentagon is sparring with SpaceX over
2:56
Starlink price. It appears that Starlink is it's
3:02
hiking the price for using their terminals.
3:06
So Starlink has kind of two vectors that they're providing
3:09
service that or at least or is is being discussed in this
3:12
article. 1 is the communications connectivity for drones and in
3:17
particular the, the US has these new kamikaze drones which have a
3:23
little Starlink dish terminal on top of it, which then you know,
3:27
communicates with, with Starlink network.
3:29
And it, it appears that originally the, this is kind of
3:33
crazy that the military is paying $5000 per terminal in
3:38
order to use them, Whereas now, I guess Starlink is trying to
3:42
push them to pay somewhere on the order of 25 to $30,000 per
3:47
unit, which is insane. Which you know, that, that, that
3:52
kind of highlights the, the pickle that the US government is
3:55
in right now, where if you're, if you only have one, one
3:58
contractor that you're working with and their sole source, you
4:03
know, you, you can only get the service from one guy that they
4:06
can dictate price. And that's what SpaceX is doing
4:09
right now. They're, they basically have in,
4:12
in their article, there's this person who covers the industry
4:15
who says that SpaceX has the Pentagon over a barrel, which is
4:18
true because there's no real alternatives.
4:20
And so this just kind of highlights the, the opportunity
4:24
for ASD space mobile where, you know, we can provide
4:27
communications to those drones and instead of charging $25,000
4:33
or whatever it is, you know, $30,000, we could charge them a
4:37
much more reasonable fee. And because it's 3 GPP
4:41
compatible, you wouldn't need these large dishes on the drone
4:45
in order to communicate with them.
4:46
You actually can use a very small receiver because we're
4:49
using low band spectrum to to communicate.
4:52
And so if you can imagine, and in this article it talks about,
4:56
you know, the Pentagon looking for alternatives.
4:58
That's this is probably a conversation that the Pentagon
5:02
and the Department of Defense is having with AST space mobile
5:04
right now. But this article, you know, this
5:08
just highlights that the the Pentagon is looking for
5:11
alternatives. And that's why, for example,
5:13
we've got 13 different military contracts, whether that's with
5:17
the DIUSDAD Department of War, all these different acronyms,
5:23
but but yeah, whether it's providing communications to the
5:29
war fighter. And so, you know, we saw for
5:31
example this device that Andrel came out with last week that can
5:35
communicate over 4G LTE. That's the primary
5:40
communications method. And so that could be for
5:43
example, for a unit within a specified area, there might be a
5:47
private network that they send out LTE signals to communicate
5:50
with all these soldiers or more importantly from satellite.
5:54
And so there's only one satellite provider that can do
5:58
4G LTE in low band, which is what these radios are are going
6:02
to use. And that's AC space mobile,
6:05
which, you know, will we see APR, you know, touting that
6:10
Andrew's work with AST in the future, Who knows, But I
6:13
wouldn't be surprised if that happens in the coming months.
6:17
But that just kind of underscores one of the use cases
6:19
that we have, which is, you know, connecting battlefield
6:22
assets, whether that's people, drones, you know, tanks, what
6:26
have you. And then, of course, you know,
6:28
you, you that includes aircraft as well.
6:31
But, but aside, aside from that, you know, in this article, it
6:35
talks about how their, the Pentagon is leveraging 2
6:40
networks. So it's not just Starlink, the
6:41
commercial side. And and of course Starlink kind
6:43
of threw kind of pushed back on the potential use of the
6:48
commercial, you know, consolation for military use.
6:51
And so they do have this other consolation, which we don't
6:54
really know much about, which is called Star Shield.
6:56
And that's a government shell, right?
6:58
And so I think it's important to highlight that 'cause I know
7:01
when I tweeted this and I'd, I'd post it on Reddit, there were
7:03
some people who kind of felt uneasy about the idea of the
7:07
commercial consolation being used for military purposes.
7:09
And I would, I guess I would point out a few things.
7:11
One, the commercial consolation is going to have some literary
7:14
use for communications at a minimum.
7:16
But then also, you know, for some of these other
7:20
applications, whether it's, it's sensing, it's radar PNT,
7:24
especially for PNT backup GPS, you could totally leverage the,
7:28
the commercial, you know, consolation for that.
7:30
But I think when it comes to secure communications and for
7:34
example, if you know, if, if other countries or MN OS are
7:39
uncomfortable with that, then I, I do think the, the whole idea,
7:43
and Scott has talked about this now I guess for 3/4 is this idea
7:49
of actually putting forward a government shell, right, a
7:52
consolation that's solely focused on government
7:55
applications. And so I think, you know, the
7:57
idea of going from this cadence of producing 6 satellites a
8:01
month to up to 12 satellites a month, that additional capacity
8:05
of call it 4:00 to 5:00, maybe 6 satellites a month that would
8:08
actually go towards building this government shell.
8:10
So the equivalent of of Star Shield.
8:12
But you know, you, maybe we, we always joked around that ASC
8:17
the, the government shell will be called instead of Bluebirds
8:19
will be called blackbirds. But that whole idea actually
8:22
exists, right? Because the, for example, the FM
8:26
1 and FM 2 satellites, which were from what we understand
8:29
based off our own due diligence, you know, the company hasn't
8:32
said anything, but we believe that those were SDA satellites.
8:35
And so they were probably prototypes for what will become
8:39
part of a government shell. And I did ask the company once
8:42
about, you know, hey, do we need to replace FM 2?
8:45
Like should you just build another one and go send it up in
8:48
space? And, and the feedback was that
8:50
having just one satellite was, was good enough.
8:53
FM 2 is actually a backup to FM 1, but then building that
8:58
particular satellite now would be irrelevant because they moved
9:02
on to the next design. And so that's a little nugget.
9:06
Next design, meaning whatever they're doing for the
9:08
government, they're working on the next one.
9:10
And so, so that's pretty exciting.
9:12
But but yeah, this article, I think the other really important
9:17
element of it is that the Pentagon specifically is also
9:20
asking and try to work with, with Starlink.
9:23
And of course they're, they're most likely talking with this AC
9:26
space mobile about providing direct to sell connectivity to
9:30
Iranians in order to, you know, Iranian civilians in order to
9:34
bypass their Iranian government. And so we've talked about this
9:38
idea in the past where if you had the ability of a satellite
9:42
to beam down Internet connectivity to directly to
9:45
mobile phones and, and more importantly, and this is not
9:48
true for Starlink, but it's true for AST to unmodified phones.
9:51
So existing phones, older phones, then this is a huge
9:57
application, right, For, for the US government.
10:01
So if you could imagine trying to communicate with, with
10:05
civilians that are perhaps trying to organize or, or, you
10:08
know, there's, there could be an uprising, whether that's in
10:10
Venezuela or Iran or in the future, maybe North Korea.
10:15
This is a very, very powerful asset, right?
10:17
Because then not only do you, you have this ability to kind of
10:23
bring flow and the ability for people to organize together and
10:26
they get access to the Internet. But yeah, that's like one of the
10:30
fastest way to get to to liberating a country is giving
10:35
its citizens access to information, right?
10:37
And so you know how that would work that there, there are some
10:41
questions around that. I think obviously in that
10:45
context, ASC satellites are not going to be integrated into the
10:49
Iranian, whatever Iranian MNO core.
10:53
It would probably be something that, you know, I, I'm just
10:56
making stuff up here. But if you had a, a friendly
10:59
country nearby, then they could serve as a network core and you
11:02
would then transmit Internet connectivity to phone down on
11:06
the ground. Now those phones would have to,
11:10
well, I guess there could be some interesting ways to get
11:12
around it. Like you could kind of spoof the
11:15
network and pretend, make it look like you're the MNO, the
11:19
local MNO. And so the phone would then talk
11:21
to the satellite. But I'm sure there's like a, a
11:23
bunch of different ways you could, you could pull this off.
11:26
You could even drop like SIM cards to people on the ground
11:29
and then they could stick it in their phone.
11:31
But one of the cool things is that once you do this, it's not
11:34
as obvious, right? Like people who have phones,
11:38
they're walking around with phones in their pocket and
11:40
there's nothing that looks extraordinary about that.
11:42
Whereas in previous cases in Iran, people who are trying to
11:47
set up the Starlink dish dishes, they would get caught, right?
11:50
They would get caught by the authorities and then face pretty
11:53
severe punishment. And so one of the cool covert
11:56
things about this is that you can enable mobile phones, which
12:00
everybody in most countries have.
12:02
And then it'd be hard for the authorities to figure out like
12:04
who's who's accessing this like other network.
12:08
And, and part of that too, is that you would take down the,
12:13
you know, in Iran, you would actually take down the, the
12:16
local network. And then you would just only
12:18
allow people to connect to this. I I mean, whatever you want to
12:21
call like the freedom network, right?
12:22
That's being provided by AST or Starlink.
12:26
But yeah, that's a very, this is a use case that we were, we've
12:29
always, you know, speculated about, but now it's here front
12:33
and center in this article that the Pentagon is, you know,
12:37
trying to negotiate with Starlink to provide the service
12:39
in Iran. And so talk about a powerful
12:42
application, right? Like bringing Internet
12:45
connectivity to people in in an area that has an oppressive
12:51
regime and freeing them by giving them Internet access, not
12:55
just like, you know, for, in Starling's case, SOS text
12:58
messaging, but full broadband, right?
13:00
And, and there's a ton of potential use cases for that,
13:05
whether you want to help people organize or, you know, or even
13:09
if you have like, I guess people working covertly, you can create
13:14
you, you can give them this ability to access information
13:17
and where, where they, where they are.
13:18
I mean, I guess the, the, it would be kind of similar to how
13:22
some people might have a satellite phone in a, in a
13:24
hostile country and they're able to communicate even though, you
13:28
know, and that would be their sole way to communicate outside
13:30
of the country. But here, because you're
13:32
communicating to unmodified phones over a cellular network
13:36
from satellite, then you can do a lot more.
13:39
You can read to more people. It doesn't have to be covert.
13:42
You know, people already own a phone.
13:44
So, so very cool stuff. The reason why I think you know
13:47
this, this article is for me, you know, I joked that I came in
13:51
this morning very bullish, but not clearly not bullish enough
13:54
because this article, the key thing is that, you know, you've
13:58
we've got like 2 key, 2 important use cases.
14:01
I think for the the US drone applications in the article
14:05
talks about that being potentially worth hundreds of
14:07
millions of dollars. So just one application for this
14:12
specific drone, 100 hundreds of millions of dollars.
14:15
So that I mean, just think about like the Tam for ASD space
14:17
mobile. You multiply that across
14:20
multiple drones, like different products or this direct to cell
14:24
use, right? Like providing extraordinary
14:27
usage in a country, you know that that's very valuable.
14:31
Or again, doing some of these other applications, whether it's
14:34
PNT, radar, sensing, you name it, right?
14:38
There's just a whole host of of applications, which is why,
14:42
again, the US government is, is interested in what AST has.
14:45
Like if you can imagine these large phased arrays, you've got,
14:48
you know, over 100 in low Earth orbit.
14:51
There's a lot of cool things that you can do when those
14:54
things are working together. But yeah, this, this article,
14:59
it, it, it comes at a timely in a timely at a timely time that
15:04
that's a bit redundant. But back in 2025 in, in May,
15:10
that was a time when I think there was a spat between Elon
15:15
Musk and, and Donald Trump. And then the entire space sector
15:18
like rallied hard, right? Because I think they had a
15:20
pretty big fallout. And so here you, you have the
15:23
ingredients of a potential fallout where where, where
15:27
Starlink is saying, hey, we know we were charging you $5000 for
15:31
each drone. We want to make that 25 or
15:33
30,000, which is kind of insane, right?
15:37
And then, you know, he in particular this article and
15:40
maybe it's a, a public shot across Spacex's bow before them
15:44
going public in here. It's visibly says, you know,
15:47
Pentagon officials said the office responsible for acquiring
15:49
the terminals, the Commercial Satellite Communications Office,
15:52
is working to find other competitors.
15:54
And so, yeah, I mean, if if and I think this is good for the
16:01
entire space sector where this over reliance on SpaceX is not
16:07
good for the country. I mean, and you know, obviously
16:10
competition is good and, and you want to have multiple vendors,
16:13
but I think having lock vendor lock into one provider for
16:17
communications or one provider for launch is not good,
16:21
Especially if you're, if the founder, you know, there's,
16:24
there's one person who controls the entity and, and depending
16:28
on, you know, their political views, they could go one way or
16:32
the other. And that could be obviously
16:34
maybe in, in harmonization with the administration or, or
16:38
against administration or in, in the EU, for example.
16:41
Obviously, you know, Elan has had a number of conflicts and
16:46
differences of opinion with the EU, which I guess it, it is
16:49
interesting to point out there. There was an article, I'll try
16:52
to find it, I'll tweet it out today.
16:54
But there was an article kind of prepping the market for the fact
16:57
that the EU is probably going to favor European entities for
17:03
allocating the two gigahertz of MSS spectrum that's coming up in
17:06
2027. And so this, I mean, I'll just
17:10
read this headline. This, this headline is, is
17:12
pretty tiny. It says EU to favor European
17:13
satellite services to prevent Starlink's Musk's Starlink's
17:17
expansion. And so that that's about as like
17:20
bullish as it gets for AS TS satellite connect JV with with
17:26
Vodafone and Orange and Telefonica.
17:30
And, and I believe Deutsche Tacon will will join that that
17:33
group as well. But but yeah, there's, there's,
17:37
there's a lot of positive things are, you know, falling into
17:40
place for the company here. But but going back to what I was
17:43
saying before, you know, I think, I think SpaceX and its
17:47
dominance of, of the field is a liability for the company.
17:51
And, and just given how, how front and center and, and, you
17:56
know, how much attention Elan gets, and he's obviously very
17:59
politically, he has he, he's very politically charged.
18:03
And so I think it's just going to be something that's
18:06
beneficial to, to the remaining players where US is, you know,
18:10
looking to diversify. So whether that's ASD Space
18:13
Mobile, it's, you know, Rocket Lab, Firefly, you know, any
18:17
number of these companies, I think, I think will benefit from
18:20
this. Also Blue Origin, of course,
18:22
Speaking of Blue Origin, I did want to say that there's some
18:26
speculation that and make to me it seems like it might be a bit
18:30
early, but who knows. But there there is a possibility
18:33
of Blue Origin New Glen actually launching this Friday, which is
18:36
pretty insane, right? Like they all the industry can,
18:42
you know, specialist and, and legacy guys and consultants were
18:45
saying that Blue Origin, the FAA investigation was going to take
18:48
anywhere between I, I saw as little as four months, but as
18:52
long as, you know, a year. And then of course, they got
18:55
that resolved in a month. And so the reason why it's
18:59
important obviously is that AST is, is looking to New Glenn as a
19:04
primary launch vehicle. The New Glenn is probably going
19:07
to put up most of our satellites.
19:08
And so that the, the importance of having New Glenn up and
19:12
running and on commercial cadence is, is critical for the
19:15
company. And so as you know, most people
19:18
know we've got 2 to 3 Falcon 9 launches coming up.
19:21
But then New Glenn, my guess is based off of the, the FAA
19:27
investigation wrap up and then, you know, this next launch for
19:30
New Glenn 4 is likely going to be an Amazon Leo mission, which
19:34
is good because you, you want to make sure that the vehicle is
19:37
successful and there's no issues.
19:39
But I think we could see a New Glenn launch as early as, you
19:43
know, July, but more likely August.
19:45
I mean, we've got obviously got to have satellites prepared for
19:48
that, but you could see a batch of four go up on Blue Origin,
19:51
New Glenn by the end of the summer, which is pretty insane.
19:56
And that's that's important because I think this is a
19:58
catalyst that isn't really pricing in just yet because it
20:03
was a negative catalyst before. What I mean by that is when the
20:08
New Glenn three launch was UNSUC or the launch was successful,
20:12
but the delivery of Bluebird 7 into orbit was was a failure.
20:18
The stock actually traded down I think from the peak we were like
20:22
it around 90 or high 80s. Prior to that mission and then
20:26
of course the stock cratered all the way to 63 and then you know
20:30
that was kind of the bottom and and we started to get some
20:33
positive news flow and you know that partially that was Space
20:37
Mob doing their due diligence and you know we started talking
20:40
about New Glen coming back online.
20:42
But I do think if New Glen 4 has a successful launch and is able
20:46
to deliver Amazon Leo cargo successfully, I think, you know,
20:51
instead of having a 20 to 30% drop in the stock price that we,
20:55
we saw, which, you know, the stock has been trading at some
20:58
level of discount. You've seen that
21:00
underperformance relative to Rocket Lab, by the way, which I,
21:03
I pointed out this reversion to me this pair trade where where I
21:08
know some people have poo pooed it over the last few days, but
21:10
we're closing that gap like that, that, you know, we've,
21:15
we've always traded at some and this is very simple, like stock
21:19
price, stock price for stock price premium.
21:21
Obviously Rocket Labs got a much bigger market cap at this point,
21:24
but the two stocks actually trade as a pair.
21:27
And so at various points of time, we've traded at a pretty
21:30
decent premium. At some short periods of time,
21:33
Rock Lab has traded a premium. And of course, recently Rocket
21:35
Lab has traded for an enormous premium.
21:38
And when I, when I tweeted, I guess a few other a few days
21:42
ago, you know, that premium, I, I talked about this, this
21:45
reversion to mean which is actually happening, which has
21:48
happened over the last few days. And, and then today is like a
21:51
pretty big gap or jump to, you know, we're up, I think what
21:56
$19.30 and, and Rock Lab is up $6.28.
22:00
So I think eventually we'll close that gap, which is a good
22:04
thing. Like I, I, I hope Rocket Lab
22:05
keeps going up. I hope it goes to 200 and we
22:08
close the gap and we're both at 200.
22:09
That's great. But the reason why I mentioned
22:12
that is is we've been underperforming because of this
22:14
uncertainty around Lords in New Glen.
22:16
However, if they actually launch this Friday or in the next week
22:20
or two and it's successful, I do expect there to be a pretty
22:24
significant relief rally in AST where, you know, you had like
22:28
Tim Ferrar and, and this new Ding Dong Stuart Lucky or
22:33
whatever his name is, Stuart Taylor.
22:35
Some of these multiple consultants saying like, oh,
22:37
hey, you know, our satellites won't fit in the fairing in F9,
22:41
Which by the way, like when the F9 goes up with, with three of
22:45
our satellites, when, when people actually see the
22:47
satellites in the fairing of the F9, like, maybe, I guess we'll
22:50
rally a little bit, 'cause this was actually a, a rumor that was
22:55
perpetuated by these clowns. And then then these hedge funds
22:58
were short. They actually were, were very
23:00
serious about it. And so it was something that was
23:03
passed around the street. There was also like an expert
23:05
network conversation where or actually there were a few where
23:11
the, the person, the hedge fund who was asking questions of some
23:13
of these industry people, they were referring very specifically
23:16
to the fact that it was their belief that our satellites would
23:19
not fit in a Falcon 9 fairing. So, so when that launch happens,
23:24
when people see that those 3 satellites are in a fairing, I
23:28
do expect there to be some small positive reaction.
23:30
Obviously the the bigger reaction would be a successful
23:33
mission. But going back to Blue Origin, I
23:35
think if we do see a successful Amazon Leo mission on Blue
23:41
Origin New Glenn Four, I think our stocks are going to rally.
23:44
I don't know, maybe like there'll be a relief rally of
23:47
1520% just on this notion that the vehicle is working and it's
23:52
fine and there's no issues with it and they resolved everything.
23:56
And so that overhang is going to get removed.
23:58
And so that's something to look forward to.
24:01
And that could happen as early as this Friday.
24:03
I mean, we'll see. Obviously they've got to do a
24:06
static fire soon before that happens.
24:08
But but yeah, I, I, I think Jacqueline, the, the barge that
24:13
catches the booster that that was, that was back in for
24:18
missile maintenance. But as of yesterday, they
24:21
started pushing the barge out. And so we could see a launch
24:24
very soon here. And so some of these bears who,
24:27
and this is a good segue to the short interest, some of these
24:31
bears actually let me just pull up my post here.
24:36
So when looking at real time short interest, it's been pretty
24:39
stubborn. You know, it stayed at the at
24:42
the same levels, call it around 67 to 69,000,000 shares, but
24:46
we're, we're still at all time highs.
24:47
And so there's been there, there probably has been some level of
24:51
short covering, but but then offsetting that are convertible
24:55
Arbs who've shorted the stock. As you know, they, their deltas
24:59
increase as the stock price goes up.
25:00
So they'll have to hedge, but we're basically flat, right?
25:03
Like as of as of yesterday, the the latest report is at
25:09
67,000,000 shares. And so we haven't really budged.
25:11
And, and I think as Cook talked about last night, last June,
25:15
what we had this unidirectional movement up of you know, the
25:19
stock was up 100%, a decent amount that was short covering,
25:23
right? Because we saw a short, short
25:25
interest go from all time highs to what was then very more
25:28
moderate levels over that period of time.
25:31
And I think we're at the beginning of that, right?
25:33
For whatever reason, these guys are whoever short, I guess
25:36
they're feeling lucky or, or stupid or they don't like money.
25:40
They have been stubborn. They've, they've kept their
25:42
position out there even with the stock price going from 63 to
25:46
126. And so I did put out this poll
25:49
earlier where asking people what they thought the June peak high
25:54
would be, right? And so let me just see what the
25:56
results are 'cause I actually didn't go back and look at it
25:59
yet. But you know, I think a lot of
26:02
people were trying to be pretty conservative.
26:04
I mean, I didn't have the most conservative prices in here.
26:06
So I had 175 at the low end, 202 fifty, and then 300.
26:11
So I think 45% or 46% said 170. Five, $200 had about 26% of the
26:18
respondents, 250 was 8.6% and then 20% voted for 300.
26:23
And so I think a number of people were like, hey, these
26:27
prices are, or maybe they're too high.
26:29
You know, I'd be shocked if it gets there.
26:30
And as you know, we've talked about like when you have
26:36
multiple catalysts and you've got the SpaceX IPO and all the,
26:39
all the interest and excitement around that, be prepared to be
26:42
surprised, right? Like I, you know, thinking two
26:47
years ago when the stock was at $2.00, I would have never, never
26:50
fathomed the stock being at 127. And we're, we're basically by
26:53
the way, folks, we're about to hit like our all time high.
26:56
I think our all time intraday high was 128 and we're at 1:27.
27:00
But I remember, you know, Kook and I talking about how we would
27:05
be happy if the stock got to like 20.
27:08
And then when it got there, it's like, oh, we'd be happy if the
27:10
stock got to 50 and then it got there.
27:11
And then we'd be happy if the stock got to, you know, so it
27:14
was like this moving thing. But what accompanied that was
27:18
the fact that the company was, you know, hitting all these
27:22
different milestones, right? Whether it was like raising
27:24
capital in order to fund the consolation, winning all these
27:28
like military awards, signing on a Saudi telecom.
27:31
I mean, people forget like that was only a few months ago where
27:34
Saudi Telecom came in, committed over a billion dollars over 10
27:38
years, also prepaid 175,000,000 of revenue.
27:44
And, and then of course, you know, Saudi Telecom operates in
27:48
a lot of the, the, the Gulf countries and then has by the
27:52
way, 60 megahertz of SPN spectrum that they, that they
27:55
purchased, you know, in auction, which we'll be able to light up.
27:59
And so, so, yeah, as the company, you know, executed and
28:02
hit these milestones, you know, the stock went up and then of
28:05
course, you know, that unlocked more, you know, as these
28:09
milestones, you know, kept kept as they kept knocking out these
28:12
milestones, it unlocked more and more value.
28:14
But but yeah, we're we're heading into this period with
28:17
all time high short interest. And then, you know, we've got
28:22
the Bluebirds 8-9 and 10 launch that's gonna happen in mid June.
28:26
Obviously SpaceX IPO is happening at the same time.
28:29
We also have the index inclusion, which is gonna occur
28:33
towards the end of this month. And I think that's gonna or not
28:35
index inclusion, but reconstitution.
28:37
So you know, we're currently in the Russell 1000, but our
28:40
waiting work cap has gone up, is going up as well.
28:42
So that's going to create index buying as well.
28:45
But but yeah, there's a lot of exciting things to look forward
28:49
to. And I think you know as as we
28:53
there, there's a lot of little side things that are going on.
28:55
For example, Brazil just granted us the ability to operate there.
29:00
And with that, you know, there's, I haven't even dug into
29:04
that one, but there's on a country by country basis,
29:07
there's a lot of things that are going on for the company where
29:10
for example, in Brazil we were given an allocation of S band
29:13
spectrum. And that's in the face of, you
29:16
know, the FCC here where I, I think, you know, there is this
29:20
opportunity where some of the S band spectrum has not been
29:24
exclusively, let's say allocated to, to Starlink, where we have
29:29
been in possibly for a 10 by 1010 by 10 band of spectrum
29:33
allocation for the US and Brazil.
29:36
And then that would also probably roll over to Europe.
29:39
And so, yeah, there's a lot of a lot of these things that are
29:41
going on. But the last thing I wanted, I
29:44
wanted to talk about and then I'll, I'll see if there's any
29:46
comments. You know, the Starship update, I
29:49
think Catsy wrote some pretty interesting stuff, which I
29:52
hadn't really thought about over the weekend, which is this whole
29:56
idea of using too many engines versus using just enough
29:59
engines. Because you obviously like in a,
30:02
in a launch vehicle, you want to have redundancy.
30:05
And so, you know, you don't want to have one engine.
30:07
You want to have like a, a few engines in order to create an
30:10
environment where if one engine fails, you can still get to
30:13
orbit or, you know, still accomplish your mission.
30:16
Whereas the point that CATSU was making is that when you have too
30:20
many engines. So for, for Starship, for
30:23
example, you've got, I guess 33 engines in the first stage, you
30:27
create this environment where there is a higher probability of
30:31
an engine failure. And then what happens is then
30:33
there because of the way, and I'm not a technical guy, but,
30:36
but the, because of the way that the engines are, are linked, you
30:39
could have a situation where there's a cascading failure,
30:42
right? Which is actually what we saw
30:44
with this new vehicle. And so I think the reason why I
30:46
bring this up is that, you know, I, I hope SpaceX is able to get
30:50
Starship going. I mean, it's good for the
30:52
industry and I wish them all, all the luck and, and whenever I
30:56
see, you know, them launching the next Starship mission, I'm
31:01
always hopeful that that everything will go, go well.
31:03
But I think it's also important to kind of recognize like this
31:07
stuff is really hard. And you know, comparing, for
31:11
example, Starship to Blue Origin, New Glen, it's almost
31:14
night and day difference, right? Because like I, I didn't really
31:17
fully understand the difficulty earning a second stage until I
31:22
kind of dug into it more. But you know, in the case of
31:25
Lords in New Glen, the, you know, they've landed the booster
31:27
and so that's great. But then they've obviously, you
31:29
know, they're, they're, they have an expendable stack second
31:32
stage to deliver the cargo. And there's, they're working on
31:37
also a reasonable second stage, But that problem is really,
31:40
really hard. And with Starship, one of the
31:44
biggest issues is returning the second stage and in such a way
31:47
that you know, it's, it's, you can refurbish it, you know,
31:51
replace tiles or clean the tiles and then get it back on the pad
31:54
and then launch it again. And that's the Holy Grail,
31:56
right? Reusability, not only for the
31:58
booster, which makes a ton of economic sense, but where the
32:02
the economics can be a little fuzzy is like the second stage,
32:04
because the second stage goes through a lot more.
32:09
You know, it it it's traveling way faster than the booster when
32:13
it comes on re entry, it has to get through the atmosphere.
32:17
And so this idea of like having these heat tiles and that
32:21
protect that second stage. But then, you know, once it
32:24
returns to earth, I mean, we all saw it like it returned and it
32:26
was completely charred, which is better than it was before in
32:29
prior missions, but then, you know, obviously exploded.
32:32
But perfecting that and getting it to a commercial cadence where
32:36
you can launch it regularly and then when it lands, you're able
32:41
to then go refurbish it and get it ready for the next launch.
32:44
You know, what's the turn around time of that?
32:46
Right. And so I think there's this,
32:48
this debate going on whether Starship the the second stage is
32:52
going to get a point, get to a point where it's reusable, or
32:55
maybe they they scrap that idea and eventually, you know, shift
33:00
to an expendable second stage. But the reason why that's
33:04
important is that Starlink's direct to sell V2 satellite is
33:09
solely dependent on Starship becoming commercially viable and
33:13
up to a, a regular cadence. And so that is something that,
33:18
you know, as a ASD space mobile shareholder, you know, folks
33:21
should watch closely 'cause then once that once that vehicle is
33:27
up to a commercial cadence, then they'll have the ability to
33:29
actually, you know, deploy satellites that are going to be
33:33
a bit more competitive. Well, the current version is not
33:36
competitive and the next version, which we'll be able to
33:40
use star spectrum, I think I think most likely you'll see
33:45
that starting in 2028, maybe 2029.
33:48
But yeah, it's, it's all you know, if, if Starship does face
33:52
setbacks, then it's going to also drag out the time that it
33:56
takes in order to get those V2 satellites up.
33:59
The other thing I would mention is that the FCC did approve
34:03
Echostar sale of spectrum to to SpaceX.
34:07
And so some people might wonder well, why are they targeting
34:09
November 2027 is as a close date?
34:12
Well, there's a few things around that.
34:14
One is I think the timing of some debt payments and in order
34:18
to close that deal and avoid some of these I think are
34:22
financial penalties. And you know, the companies are
34:24
waiting to close the deal a year and two months from now.
34:29
But then also it's not just US regulators, they have to get
34:32
through international regulators.
34:34
So there's country by country approvals that that still need
34:37
to happen for SpaceX and Echostar.
34:40
And so, you know, for all intensive purposes, I think they
34:43
probably are going to be OK, but you never know with these
34:45
regulatory reviews. And so I think that's something
34:49
to keep an eye out for. Then obviously we learned in the
34:52
SpaceX, you know, IPO perspectives that that SpaceX is
34:56
not working with handset guys. They're, they're totally,
34:58
totally depending on the M and OS in order to push
35:01
compatibility. And so for, you know, handsets
35:04
to adopt the, the, the spectrum that they're planning to use.
35:07
So, you know, we'll see. They obviously have to maintain
35:11
positive relations with the M and OS.
35:13
And as I've pointed out in some of my recent posts, some of
35:16
these guys are getting cold feet.
35:17
So we saw T-Mobile join the AT&T and Verizon joint venture, which
35:22
to me that means like they're, and you know, from what I
35:24
understand, they're, they'll be joining AST space mobile
35:27
service. That's just not as explicit as
35:30
can be said just due to regulatory issues.
35:32
But then Deutsche Telecom, they had a, they had a, in their
35:40
earnings announcement last week, they, they talked about how, you
35:43
know, they, they, they feel OK with their Starlink
35:46
relationship, but then they're also open to working with other
35:49
providers because they do not want to be locked into one
35:52
vendor. And they understand the risks
35:55
of, you know, obviously, if Starlink does eventually start
35:58
competing more directly with them, which I did point out,
36:02
you're starting to see that narrative hit more.
36:05
So initially, by the way, like the narrative around direct SL
36:08
being a threat to incumbent businesses that originally was
36:13
focused on the tower companies, right?
36:15
And so we saw American Tower, Crown and Castle, you know, some
36:19
of these guys, they all traded, they all traded.
36:23
They all traded down and traded at pretty crappy valuations.
36:26
I think starting mid last year on these concerns that satellite
36:31
connectivity was going to crimp their growth and potentially
36:35
remove some of the areas where they provide tower services that
36:40
may not be needed. Or you know, for example, like
36:43
some of these carriers might look to save some money, but
36:46
then that's that has now shifted towards the M and OS.
36:49
And so looking at some of the latest outside research.
36:52
And then of course, if you just listen to like Verizon AT and TT
36:56
mobile earnings calls, maybe a year ago, like no one really
37:00
cared about satellite, but now each one of them like clockwork
37:04
are getting questions around direct, direct to cell, direct
37:07
to device. It's like, hey, so I know you're
37:09
working with these satellite companies and so is this a
37:12
potential threat? And you know, each of the
37:14
executives, obviously they're going to say not much of our
37:16
traffic. We don't think much of the
37:18
traffic will go onto these networks.
37:20
Obviously that solving the last mile is very important.
37:22
And for customer, customer satisfaction, you need to have
37:27
broadband connectivity, you know, 100% like no matter where
37:31
you are 'cause that's, that's the Holy Grail, right?
37:32
And that's what people pay a premium for.
37:34
But then they'll talk down about the potential for satellite
37:39
networks to be competitive, which, which they should, right,
37:41
'cause it's, it's not really, at least for ASD Space Mobile's
37:45
model, it's not to be competitive, right?
37:46
It's to be complementary and in times when needed, augmenting
37:51
the the the core network, whereas.
37:55
And the reason why people are getting this question is that,
37:56
you know, obviously Starlink is out there buying spectrum and
37:59
they're looking for more. And when you have Elon Musk, you
38:03
know, publicly saying, yeah, I want to become an M&O, that a
38:06
global M&O that will compete with all these companies, it's
38:10
hard for these M and OS to avoid those questions.
38:13
And so I think the narrative is shifting and, and it's now at a
38:17
point where like Deutsche Telekom, they were asked on the
38:20
call about it and so was AT&T and and Verizon and T-Mobile.
38:24
I mean, everybody's going to be asked about it.
38:26
Like what do you think about Starlink and when they start
38:27
competing with you? And so I think that's where the
38:29
narrative, it's interesting how the narrative has changed where
38:33
before direct advice was kind of Pooh poohed on and and not
38:36
really viewed as a market, whereas now it's like an
38:38
existential potential threat, right?
38:41
And and that is now prompting some of these boards and
38:46
management teams to think differently about their
38:47
relationships, which is where I think Starlink, they disclosed
38:51
the S1 that they've got 30 M and OS that they're working with
38:53
globally. And another interesting
38:56
disclosure, which which I covered last night and a tweet
38:58
is that these contracts are for, you know, multi year, three to
39:03
five years. However, the M&O customer can
39:06
terminate them at any time, which which I found kind of
39:09
funny because I think, you know, for for some of these companies
39:14
who made this commitment, Starlink, once they find out,
39:16
you know, what, what Starlink is trying to do and what a threat
39:19
it is. I think I think you're probably
39:21
going to see a big shift away from Starlink to AST, you know,
39:25
over the coming months and years, which, you know, we saw
39:29
the big one first, which is T-Mobile.
39:31
So anyway, that's kind of all that I had.
39:35
I'm going to take a look and see if there's any comments.
39:38
But yeah, it's a very, very exciting time to be invested in
39:43
AST and also to be invested in space sector somewhat.
39:47
OK, here's a here's one comment. I love you and pen man.
39:50
I love you too. Hard not to be optimistic and
39:56
positive given what's been going on.
39:58
But you know, I, I will say we, yeah, everybody.
40:03
In this space and, and folks who have invested in the space
40:05
sector, like we, we saw this like many months coming, right?
40:08
Like the writing was on the wall that the SpaceX IPO is going to
40:11
be a pretty big catalyst. Why that, why is that?
40:14
Well, you know, you've got the largest in the proxy, the
40:19
largest company in the, in the proxy for the entire space
40:21
sector now at it. What a $2 trillion valuation.
40:24
The management teams out in the road right now and they're going
40:27
to do meetings in Boston, Chicago, Denver, LA, you know,
40:32
where all the big mutual fund assets are.
40:35
And so people are learning about the space sector and they're
40:38
learning that there's a tremendous Tam potential here.
40:41
It's not just something that's focused on consumers, but it's
40:43
also government applications. And they're learning about this
40:47
new vertical called a, a data centers in space, which I'm sure
40:50
they all they all read about it and heard the skeptics say,
40:54
yeah, it's not possible. But then imagine, you know, the
40:57
SpaceX executives like when Shotwell seeing a meeting with
41:00
fidelity and saying, hey, well, this is what or, and maybe
41:03
Alon's there too, but you know, they're they're talking about
41:05
the opportunity around, you know, Starlink connectivity
41:09
launch, you know, putting a Mars colony, moon colony, all these
41:12
things. And then they talk about, well,
41:13
the killer app in terms of commercial, commercial use is
41:18
beyond beyond what we're doing. Starlink is this is this idea of
41:23
putting data centers in space, right?
41:24
And so they're, if you were sitting in the room with LON
41:27
Musk and Gwen Shotwell and they're explained to you in
41:29
detail how you solve all these different issues and why a, a
41:32
data centers is not just a dream, but a requirement for the
41:36
future, Then you're gonna become bullish, right?
41:38
And then and then coming out of that meeting in that
41:41
presentation, by the way, like it shows some of the other
41:43
comparables, right? So other companies in the space
41:47
sector that you're benchmarking in terms of valuation and, and
41:52
that's where a lot of these new institutional investors are
41:55
learning for the first time about some of these smaller
41:58
companies like intuitive Machines or, you know, Planet
42:02
Labs or Rocket Lab. They're, they're learning about
42:05
it for the first time. And so, you know, they're going
42:07
to come away from the meeting and, and figure out like, OK,
42:10
well, we can invest in SpaceX at a 2 trillion, you know,
42:14
valuation or we and, or we can look at some of these other
42:18
companies that are more a more of a pureplay way to express the
42:22
trade, right? Because I think the, the issue
42:24
for, and I've talked about this before is like with SpaceX,
42:27
you're getting a bunch of other stuff, right?
42:29
You're getting XAI, you're getting X with all the the
42:33
baggage and CapEx spend that comes up with that versus being
42:37
able to invest in your pureplay like Rocket Lab, right?
42:40
Like maybe that's more interesting to you or the other
42:44
thing that they've got to think about too is, is governance,
42:46
right? Like, So what is Elon going to
42:47
do? You know, do I I obviously he's
42:51
a successful entrepreneur. He's been he's been successful
42:53
in most of the things that he's he's been doing.
42:55
But you know, is he going to Burge it with Tesla at some
42:58
point, maybe within a few months?
43:00
Like they did this acquisition of cursor And so they can do all
43:04
these deals, by the way, without Cheryl or vote, because Elon
43:07
basically controls the vote. So anyway, maybe I'll just end
43:12
it there. I did want to get people
43:15
together and and talk about this orders article, which I think is
43:18
very important. It just highlights the two
43:21
important use cases for AST and that the Pentagon is chomping in
43:24
the bit trying to get, you know, Sterling to work with them.
43:28
But obviously they're looking, I mean, this article specifically
43:30
says they're looking for competitors.
43:32
And we know that AST is working with the Department of War,
43:36
SDASDADIU and the Pentagon. And so it's just a matter of
43:40
time, right? Like these, these contracts are
43:43
going to on top of the 30 contracts we have, like some of
43:47
those will expand into multi billion dollar contracts and
43:49
then we're going to get additional contracts.
43:51
And so if he likes the commercial business, you're
43:54
going to love the defense business.
43:56
But thanks everyone for joining. I'll just end it there.
44:00
Maybe we'll do another space when stock gets to 150 in a few
44:03
days. Anyway, hope everyone's having a
44:06
a good day and we'll catch up again soon.
44:09
Take care. Thanks for listening to the AST
44:19
Space Mobile podcast. If you enjoyed this episode and
44:23
you'd like to help support the podcast, please share it with
44:25
others, post about it on social media, or leave a rating and
44:29
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44:31
about AST Space Mobile, make sure to subscribe.
44:35
Thanks again and I'll see you next time.
44:41
We're doing something very, very big and I think with this
44:43
technology we can really affect billion lives.
44:45
ASP Space Global is the only company that has full technology
44:50
to deliver cellular broadband connectivity directly from space
44:55
to do everyday smartphone. People will just basically turn
44:58
their phone and be seamless, regardless of where you are.
45:01
We don't want the user even to know that it's connected by
45:04
satellite. Our role is to bring this into
45:08
reality, always in partnership with the MMO.
45:17
Listen, Waffles.