Latest / AST SpaceMobile Podcast / Anpanman - SpaceMobile Markets: The Rakuten Exit and Analyst Games

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Anpanman - SpaceMobile Markets: The Rakuten Exit and Analyst Games · AST SpaceMobile Podcast

• 0:07
  is the AST Space Mobile podcast. Just basically from the phone,
• 0:14
  be seamless, regardless of where you are.
• 0:16
  We don't want the user even to know that it's connected by
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  satellite. Listen, the opportunity that we
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  have is very, very, very large. Everyone, thanks for joining.
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  Thought I'd fire up a space this morning to talk about the latest
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  development here around ASD Space Mobile.
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  And I'm also going to talk about Strata Critical, which reported
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  earnings this morning. I'll just talk very briefly
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  about it, but first I'll start with AST.
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  So last night we just found out that Rakuten has wrapped up
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  their sales. They sold a total of just over
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  15, I think 15 and a half million shares since April 17th
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  and they instituted A10B51 plan. What that is is a an automatic
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  selling program that, you know, you give certain parameters or
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  instructions to an investment bank.
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  In this case it's Bank of America and you say I want to
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  sell these shares over. You might provide some
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  parameters like, you know, I want them sold over a certain
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  period of time or above a certain price or no more than
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  this volume or whatever it is like you give them a
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  predetermined trading plan, but a lot of it is left up to them
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  in terms of discretion and then they go execute it right.
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  And the reason why you do that is it frees you from, you know,
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  in case you do get non material, non public information in the
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  future, it's not going to restrict you from selling,
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  right? And so you'll see executives of
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  companies where just as part of, you know, estate planning and
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  just good, you know, for any executive, if you, especially if
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  you have a family, it's just good financial planning to have
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  a 10B51 plan in place to sell some predetermined amount of
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  shares over some period of time. And, and that by putting that
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  in, you're telling market that that's an automatic thing.
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  I'm not doing it ahead of material news, whether that's
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  positive or negative news. And so it cleanses you from
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  having or being restricted from selling.
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  And so for those that don't know Rakuten back in January, the
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  chair, chairman and CEO and founder of Rakuten, Mickey
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  Mikutani, who was an early investor in ASD space Mobile.
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  And quite frankly, we, we owe a lot to Rakuten because they were
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  an early believer and they provided a ton of Technical
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  Support and financial support to the company.
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  They, they, they invested many years ago.
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  And I think they had invested it was like $100 million overall.
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  And and of course that's turned into billions of dollars.
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  And so for those that don't know, Rakuten is a well known
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  e-commerce company in Japan. And Mickey Mikutani is this
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  maverick. He, he thought, hey, I'm going
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  to follow in the steps of Masayoshi Son and take on the
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  wireless industry, which Masayoshi Son, many people know
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  who he is. He started SoftBank and got into
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  the mobile business and broke into that market and was a
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  maverick. And then Mickey, Mickey Tony was
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  like, hey, I want to be a maverick too.
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  And, and so he started Rakuten Mobile.
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  He got his hands on some big band spectrum, which you know
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  that that was the only spectrum that was available at the time.
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  Try to start service, of course with only mid band spectrum,
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  it's really tough to compete for coverage and propagation, you
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  know, service levels. And so I think it was like 2-3
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  years ago he finally got hands his hands on some 700 megahertz
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  spectrum, which by the way is the spectrum that AST is going
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  to use for service. They call it the platinum band
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  out in Japan. But anyway, this is all
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  background because Rakuten, you know, the e-commerce business
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  was doing really well and then by getting into the wireless
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  business, he had to invest a ton of money.
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  The company became over leveraged and it's become
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  somewhat of an albatross for the company.
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  But then, you know, ASD space mobile service he viewed as
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  being a key differentiator for the company that was going to
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  allow them to take, you know, subscribers from the other
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  carriers, which is, you know, on the come right now as we roll
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  out service. But in the meantime, Rakatin,
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  you know, with rates skyrocketing in Japan, they had
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  to deleverage, right, Because I think they were spending
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  something north of like 500 million in interest expense.
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  This is USD. And so they've been in a program
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  right now to deleverage. They are, I think they looked at
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  strategic options and might make some type of decision.
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  They have a pretty big fintech business.
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  They might monetize that, but then the other, the other like
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  highly liquid asset that they have that they made a shit ton
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  of money on is AST space Mobile. And so there eventually was
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  going to be a day in time a day for them to monetize some
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  portion of it. And so coming into this month,
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  they were an approximately, you know, over 10% holder of the
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  company. And by Mickey, Mickey Tawny
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  stepping off the board in January, they became free from
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  their obligations to hold, you know, the entire state.
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  Now there are conditions they they still have a board observer
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  seat. And So what that means is they
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  can still attend board meetings. They can't be an active
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  participant in each of the committees.
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  They can't be active. And those but as a observer,
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  they know like what's going on with the company.
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  However, if there are sensitive commercial matters and probably
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  strategic matters as well, they probably in the agreement that
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  they have, they have to recuse themselves from those
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  discussions because obviously you know, especially as they
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  reduce their stake and they don't sit on the board, they
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  don't want to be in, in possession of material non
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  public information. And so with that board observer
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  seat, they actually can retain that until they, they're, I
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  think there's 2 triggers. 1 is if they fall below 5% ownership,
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  which they're currently I think at like 5.3% ownership and then
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  I forgot what the other one is. But there is another trigger if
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  they fall below a certain threshold.
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  So they will continue to stay on as board observers.
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  And you know, Congrats them for such a great investment and I
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  hope it helps them deleverage and right size their business.
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  That said, I, I do want to be critical of Bank of America
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  because typically like if you engage with bankers, I was a
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  former banker too, you might go to them and say, Hey, what's the
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  best way if we want to monetize half of the stake?
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  And the bankers might give them menu options and timing too.
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  They might say, well, if the company is willing to help you,
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  we might do a marketed offering where we might go on a roadshow
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  and, and, and try to place your shares and, and the whole point
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  of a marketed offering is to place those shares at less of a
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  discount. But then you also, you're,
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  you're exposed to market risk, right?
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  So if the market craters during that period of time, Iran
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  conflict flares up, then the stock market might go down and,
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  and your pricing might be worse over that time.
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  Or if the company does a good job in marketing and let's say
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  the markets are stable, the stock price may rise into that,
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  that, that offering. But then, you know, you have the
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  dynamic is that, you know, you might have short sellers that
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  sell that short into that offering and then technically
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  they're not anybody who shorts into an offering like that
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  cannot, cannot participate, cannot buy shares.
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  But then you know, but but there's trade-offs, right?
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  And so with the marketed offering, though, you have to
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  have the company's participation in that, right?
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  Like the company management, it takes valuable time away from
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  them. They have to go out on the road
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  and talk about the deal. And so that's especially given
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  the current state of the company where we just lost BB7 and
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  they're in full ramp of production.
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  That would not be good use of time.
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  Another alternative would be, and this is what I think they
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  should have done. Bank of America should have
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  said, hey, we can do an overnight book build that block
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  trade basically. And this is similar to what Red
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  wire did recently. They they actually moved a shit
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  load of stock for AE partners. But I would have recommended an
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  overnight deal, right? I would have said, hey, with the
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  stock it back then it was like 88.
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  You know, they would talk to capital markets.
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  Capital markets would figure out which accounts on the stock.
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  And there might be during the day, there might be, they might
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  bring some of those accounts over the wall, meaning they get
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  restricted, they can't trade and they might get some, they might
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  gauge what the interest is. And then they might, they could
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  go to the company and say, hey, we can take this whole thing
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  down, you know, the 15,000,000 shares.
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  And we will, you know, we'll, we'll, we'll place it overnight
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  with accounts and we can do that at, and based off their
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  discussions and market dynamics, they'll figure out some type of
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  discount, right? So if that's five, 1015%, maybe
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  even, but you know, we'll, we'll take the risk.
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  We'll, we'll, we'll place it. And then for institutions, if
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  it's long only guys, they'll, they'll be happy to buy it.
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  If it's hedge funds typically like capital markets desks, they
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  are hoping to get a big enough discount to where they can flip
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  it back to the market and make, you know, 2, three, 4%.
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  And so in that instance, you know, the company would have
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  weighed well. Oh, OK.
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  So that's like a 510% discount, you know, versus $88.00.
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  So let's say the execution was 8080 versus the closing price on
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  April 17th, which was 88. You know, is that worth the risk
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  or is that worth the discount? Right?
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  Which in retrospect it is. But then of course, there would
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  have been some signaling. It's like, why is Rakuten doing
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  this block trade ahead of the BB7 launch?
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  And so there's like some weird dynamics here, right?
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  Like perhaps they could have waited the following week.
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  They could have waited until FCC approval, for example, like had
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  they not sold on that Friday at 88 and then the market reacted
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  obviously to BB7 and and all that stuff.
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  You know, stock closed at 7940 that day and then going into FCC
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  approval, you know, my guess is Frakatin hadn't advertised
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  selling before and we lost BB7. My guess is the stock would have
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  been instead of that with FCC approval probably would have
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  been closer in the 90s versus like mid 80s or perhaps higher
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  than they could have did a block trade at that time, right.
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  But you know, of course, hindsight's 2020, who knew that
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  FCC approval was coming? Who knew that we're going to
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  lose BB7. But but I think for Bank of
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  America, I think they've got yeah, there it's, it was poor
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  execution and advice, meaning, you know, oh, we're going to do
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  this, this open market selling over the next two weeks and
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  we're going to put or no, three weeks, we're going to put a lid
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  on the stock. And on top of that, if you look
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  at their trading, they actually they did OK in terms of EWOP,
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  they, they beat the WAP in a few days.
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  Other days they were just under, but clearly they were on top of
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  the stock. And most importantly on the big
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  days that the stock was up like on the FCC approval, they, they
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  were 10% of the volume, right? And so they clearly were sitting
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  on it because they were trying to get liquidity.
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  It was that. And then on April 30th, they,
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  the after, let me see, it's 123456 almost 6 days straight of
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  going down. The one day that stock popped
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  up, they were there for 13.3% of the volume, right?
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  And so that's, that's pretty heavy.
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  That's pretty heavy. And on top of that, I think the
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  key thing is like if it's, if this was a large institution,
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  like let's say if it was Fidelity or T Rowe and they're,
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  they're looking to sell a decent amount of their position, they
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  would do that. They would do it and it would
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  not be announced. But with Rakerton, it's very
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  visible because they're, you know, they, they previously run
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  the board, they're 13D holder, they've communicate to the
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  market, yes, Bank of America is going to be there with this
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  10B51 plan. And based off of the initial
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  selling, pretty much the market figured out like, oh, they're
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  going to be in the market every day, right?
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  And it could be mid single digits to high single digits to
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  even above 10%. And so with that, you, you know,
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  short sellers had carte blanche to do what they wanted, right.
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  And then on top of that, you had, you know, obviously the
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  sentiments net negative. It's like, oh, there's this,
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  this big boogeyman out there that's selling stock.
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  And then the, the negative narrative is like, oh, why is
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  Rocketon selling? And, and you know, bears can
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  spend that any way they want, But it's like, I mean, for the
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  people who know, it's like, well, they're on financially
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  difficult times and they need to deleverage the balance sheet.
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  And as I mentioned before, like if you're paying 500 million in
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  interest expense a year, we're in rates in Japan where rates
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  were negative and the zero for longest time, but now rates are
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  going up, you've got to, you've got to pay down debt pretty
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  quickly, right? And so, so, yeah, that's, I
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  think now that we're kind of through this and that overhang
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  is gone and you don't have this presumed seller in the market
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  every day, which, you know, to me initially I, I thought, well,
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  OK, maybe if they, if you do like low single digits type of
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  selling, it's not really going to impact the stock, right?
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  But then if you're in a market where, you know, you've got
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  negative sentiment space sectors going down and then two days
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  that the stock is up, you, you go heavy, you go heavy 10% and
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  13.3%, yeah, you're going to crush it, right?
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  And, and on top of that, like algos and algos know that that
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  Bank of America, which you can see in advertised trade volume
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  that they're going to be out, they're out there in size and
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  then they just take advantage of it, right?
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  They get ahead of it. So anyway, so yeah, now that
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  that's done, you know, we'll see how the stock performs.
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  Obviously there's some relief rally going on today to an
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  extent. And you know, I, I, I will add
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  like, it is interesting to see like all these accounts that
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  come out, you know, when stock is down and then they like rage
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  bait people and inevitably it works because some people engage
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  with them, but you know, they like celebrate and that I told
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  you. So it was in all this like toxic
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  shit, right? But for me, some of those
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  people, it's like too much where I'm just like, OK, I'm going to
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  block this person because I don't, I don't need to keep
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  seeing this over and over again. But on the other hand, like
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  there's some of these accounts where they're, they're like the
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  perfect signal, right? Where like this guy, Johnny
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  Walker, who Johnny Walker, AZ, he's like a rocket lab holder.
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  And then he he like rage baited people by saying, I always
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  thought Rocket Lab would win in the end as TS is.
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  Yeah, it's it's I was asked many times why I wasn't in it.
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  And he like post this chart and it's like, what?
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  What's the point of this post? Like Rocket Lab would win in the
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  end. The two companies don't compete
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  with each other. But you know, there's like some
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  of these accounts that will post this stuff from time to time and
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  it's just, it's just funny, I guess.
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  But but some people for whatever reason, they take it personally
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  and then they go attack that person and then and then that
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  just like fuels this supposed Rocket Lab as TS rivalry, which
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  one day I promised to do a space about the genesis of that
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  rivalry, which was the small group of Rocket Lab guys.
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  I see one, this guy, Rocket Lab Labrador or whatever, like he's
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  still around posting shit. But there was a whole like game
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  plan those guys, those guys put together and it worked.
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  It worked. You know, credit to them, it
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  worked back in the summer of 2024 and for whatever reason,
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  people still hold on to that, that that rivalry.
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  But anyway, but yeah, so now that now that Rakatan's done
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  that, that overhang is gone And, and yeah, so I think now the
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  stock can kind of be more free in terms of trading and we'll
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  see, We'll see how it performs. Obviously we've got the earnings
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  update on Monday the 11th and oh, I did want to talk about
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  research analyst too. So I, I see a few people
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  retweeting or tweeting about B Riley adjusting their stock
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  price down, their price target down, I think.
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  Let me look here. B Riley today lowered their
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  stock price target to 75 from what is it 95?
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  Yeah, 95 S and some people are lamenting that.
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  I actually think that's really good because so in the the
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  street, as we call it, you know, wash reach analyst, there's a
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  game that goes on right. And sometimes, and I think for
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  retail investors, like people don't really understand the game
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  fully. And there's kind of a game
• 16:58
  within the game too. And so I'll just talk about B
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  rally, for example. So a normal person might be
• 17:05
  like, oh, they lowered their stock price target right before
• 17:07
  earnings. Like how could they do that?
• 17:09
  That's terrible. Like they don't even know what's
• 17:11
  what's coming. They're just responding to the
• 17:13
  the stock price, which they are. But you know, in some ways like
• 17:18
  this is a, or in a lot of ways, this is actually a good setup
• 17:20
  for the company because they're lowering the price target on a
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  day that the stock is going to be up anyway.
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  And they're that B Riley, not, you know, lowering their stock
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  price target is not going to have any real material impact on
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  the company. However, what it does is it sets
• 17:35
  the company up or if you know, May 11 results are positive and
• 17:39
  they give positive, you know, guidance and talk about
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  production and all this other stuff, maybe the birds have
• 17:45
  shipped by then. Then that gives B Riley the room
• 17:48
  to raise the price target. And I know it sounds silly, but
• 17:51
  after the update, if B Riley finds good reason to raise the
• 17:57
  price target, they will. And so before, by having a 95
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  price target, like there's no room to raise the price target,
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  but doing lowering the price target on a day when the stock
• 18:05
  is going to be up, there's no penalty.
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  And then once the quarter is out and if B Riley feels inclined to
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  do so, they can actually raise it back to 808590, whatever it
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  is, right? And so that's kind of the funny
• 18:18
  game that happens on the street. And so it and we all know, like
• 18:22
  research analysts to a degree are independent, but they're not
• 18:25
  right. Like we also saw Scotia who was
• 18:29
  a big bull in the company, but then over time became very
• 18:31
  negative and became bearish. And, and I was telling some
• 18:35
  people today that when you work at a hedge fund or a fund like
• 18:39
  part as an analyst, part of your job is to talk to the street and
• 18:45
  research analysts are, you know, they're not going to, they know
• 18:47
  the Indus sector and they know the sector and they talk to all
• 18:50
  the companies and they have some level the good research analysts
• 18:53
  will do great fundamental work and they'll publish and they'll
• 18:55
  be independent, right. But then part of their job is to
• 18:58
  facilitate information flow, right?
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  So they'll talk to the company and through their conversations,
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  they'll publish something and that will become through The Reg
• 19:05
  FD process because they're publishing that becomes
• 19:07
  disclosed, right? And so sometimes like retail
• 19:09
  investors will say, well, how come that research analyst or,
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  or that institution talked to the company and they got like
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  this information that no one else knows the company.
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  So it depends on the company, like they, if they're truly
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  following Reg FD, they're going to when they have conversations,
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  they're going to be very cognizant of not giving people
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  MNPI and they typically won't do that for institutions, right?
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  But for research, they, they have the ability to tell them
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  more because ultimately those research analysts publish,
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  right? But part of the game is that the
• 19:39
  analysts from hedge funds and and institution like long only
• 19:43
  funds, they'll talk to research analysts and part of their job
• 19:47
  is to of course, like get some of those Nuggets that perhaps
• 19:49
  aren't actually published. But then also part of their job
• 19:52
  is to influence research analysts, right?
• 19:54
  And so if you have, if you're bullish on a stock and there's a
• 19:58
  guy who's neutral on it, you, you might call them from time to
• 20:01
  time and start feeding them your perspective, right?
• 20:04
  Like This is why you're wrong in the model or I'm much more
• 20:07
  bullish. Have you thought about this?
• 20:09
  Yeah, there there's various ways to try to get a research analyst
• 20:12
  on your side. And vice versa too, like if
• 20:15
  someone's too bullish, you might feed them just like this Scotia
• 20:19
  guy, the short sellers feed him all kinds of stuff, right?
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  And he publishes it. Like there's no filter on this
• 20:25
  guy. He actually publishes it.
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  And so that that's part of the game.
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  And part of the game too is like the earnings print, right?
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  So what I'm not saying what B Riley did is they're, they're
• 20:36
  trying to game it, but it gives them room to upgrade the stock,
• 20:39
  right? And that's actually a positive
• 20:41
  thing going into a print. And then the what would, yeah,
• 20:47
  there there's famous examples of especially in TMT where, you
• 20:52
  know, companies like I remember back in the day, like Viacom and
• 20:56
  CBS were notorious for managing St. consensus, right?
• 20:59
  And So what I mean by that is heading into an earnings call,
• 21:04
  you would have the management team, even during the quiet
• 21:07
  period, they would reach out to Southside analyst and they would
• 21:09
  have conversations, say, hey, your estimates are too high.
• 21:12
  You're, you're a little high in revenue and you're a little high
• 21:14
  on EPS. Like before the print, you
• 21:16
  should lower them, right? And so, and like research
• 21:20
  analysis the day or two before earnings, they might say, oh,
• 21:23
  we've, we've like based off of feedback and, and research that
• 21:27
  we've done, we're actually lowering our estimates just
• 21:29
  prior to earnings to reflect like some development in the
• 21:32
  quarter, like advertising is coming in a little weaker or
• 21:35
  whatever it is, right. But by managing research
• 21:38
  channels and then consensus what the company is doing at that
• 21:42
  point in time is they are lowering the bar, right?
• 21:45
  So if you get Goldman, Morgan Stanley, Merrill, any number of
• 21:49
  firms like, you know, you, you manage their earnings down like
• 21:53
  the few days or weeks prior to a print.
• 21:56
  Then when the company does report, they lo and behold, like
• 22:00
  the bar was lowered and then they beat right.
• 22:02
  And so then sentiment perhaps is better now, obviously, like for
• 22:07
  the smart analysts out there on the buy side, they they're not
• 22:11
  going to, you know, that to some degree they're they're going to
• 22:14
  see through that. But at the same time, like
• 22:16
  that's part of the game. And and so if algos pick up
• 22:19
  like, oh, the company beat by a terminus amount and the stock
• 22:21
  goes up, then then the company will have done a great job of
• 22:24
  managing expectations, which is, you know, that's what we call
• 22:27
  it, right. The on the flip side, they can
• 22:31
  work the other way too. So let's say like, let's say .72
• 22:35
  or Citadel is short as stock, right?
• 22:38
  And, and heading into the print, you know, they, the number it,
• 22:42
  it's like a beatable bar, right? The consensus seems to be low.
• 22:45
  And, and so the analysts there are like worried that the
• 22:47
  company's going to beat and we might get a squeeze.
• 22:49
  And so they'll talk to research analysts and say, Hey, I think
• 22:53
  your earnings projections, you know, they'll pretend like
• 22:57
  they're bulls and they'll say your, your earnings based off of
• 23:00
  my, you know, due diligence and, and work.
• 23:03
  I think your, your estimates are too low.
• 23:05
  Like, I think you should raise them before the quarter, right,
• 23:08
  for the report. And so they might be able to get
• 23:13
  a few firms to raise their numbers, right?
• 23:15
  And so sometimes you'll see these, these firms raise, raise
• 23:19
  their expectations into the print, which whenever that
• 23:22
  happens, by the way, like for stocks that I own, I always get
• 23:25
  super nervous, right? Because it's like, OK, you're
• 23:28
  raising the bar for the company just before they announce
• 23:32
  earnings. And so the, the, the, the
• 23:35
  potential for them to disappoint goes up, right?
• 23:38
  And so, so you'll have these, these situations where short
• 23:42
  sellers are like, Hey, you should raise, raise your
• 23:44
  expectations going into the print.
• 23:46
  Stock actually trades up because, you know, some, some
• 23:49
  analyst comes out bullish like a day or two before and says, Hey,
• 23:52
  we're raising our expectations and the stock goes up.
• 23:54
  And then these these clowns actually short more stock
• 23:58
  because it it's gone up. And then of course, when the
• 24:01
  company announces because consensus has been raised, they
• 24:04
  are in line all of a sudden or they, they just meet, just beat,
• 24:07
  sorry, just miss and the stock goes down.
• 24:10
  And so, and, and that that's just for the quarterly results.
• 24:14
  Like also the guidance, you know, maybe there's gaming going
• 24:17
  on with the guidance. Like, yeah, you you try to, if
• 24:20
  you're a short teller, you try to get the three ounce to raise
• 24:22
  guidance expectation for the next quarter higher than what it
• 24:26
  should be. And so this is the game.
• 24:28
  There's like this constant battle between short sellers and
• 24:32
  long onlys and their ulterior motives and utilizing the sell
• 24:37
  side research to express and set up, you know, set up things to
• 24:43
  either beat expectations or, or to miss expectations.
• 24:48
  And so this is all part of the game.
• 24:49
  And so I think when looking at research analysts and research
• 24:53
  reports, like it's important to keep this all in mind that
• 24:57
  there's this constant battle, right?
• 24:59
  And, and no one is, is independent.
• 25:02
  No one is truly independent or unbiased.
• 25:04
  Like there's going to be some type of influence, right?
• 25:07
  And that can change. Like just like we saw with
• 25:09
  Scotia where this guy was very bullish and then he flipped
• 25:13
  negative and is now just, he's like almost worse than Tim.
• 25:17
  He's actually worse than Tim Farrar in a lot of ways.
• 25:19
  Like he is just printing stuff that's total negative.
• 25:25
  It's clear by the way, like the company, I don't think Scotia
• 25:28
  is, is working on any of the financings for the company.
• 25:31
  And of course like they're, they must be getting paid a lot of
• 25:35
  Commission dollars from some of the short sellers.
• 25:37
  So, so that's the that's the piece of the bread side of the
• 25:40
  bread that that's getting buttered for them.
• 25:43
  But yeah, so it's it's important to understand, you know, with
• 25:45
  today's, like for me, when I see on ASD, when I see people down
• 25:50
  grading the ratings or lowering the price targets based off of
• 25:53
  some delays, like that's fair, right?
• 25:55
  And but then on the flip side, the other side of the coin is
• 25:58
  that when the company executes, when the company delivers a
• 26:01
  batch of satellites, delivers second batch, third batch, you
• 26:05
  know, New Glenn gets launched going again, we get more
• 26:08
  contracts like these. These analysts now have room to,
• 26:13
  you know, to up upgrade their rating on the stock and raise
• 26:18
  price targets, right? And so that's just kind of the
• 26:21
  natural progression of, of research coverage.
• 26:25
  But the key thing though is that for a company like ASD, like
• 26:28
  you, you want to have broad research coverage, which by the
• 26:30
  way, like back in the day and we only had like two or three
• 26:33
  research analysts. But now, you know, the company
• 26:35
  is well covered. It has over 10 major investment
• 26:39
  banks covering it. And the reason why that's
• 26:40
  important is that as an institution, for example, anyone
• 26:45
  who's like doing work on SpaceX IPO and they, they want to look
• 26:48
  at the comparable companies and they're like, oh, who puts this
• 26:50
  AC space mobile? The first thing that they'll do
• 26:53
  is they'll go and see what research reports are out there,
• 26:56
  right? And they'll look at like
• 26:58
  initiation of coverage to just get them up to speed quickly.
• 27:01
  And then they'll look at the most recent quarterly research
• 27:05
  to see what is the centimeter on the stock like, what are the key
• 27:08
  issues? How's the company performed
• 27:10
  relative to expectations? And again, that those
• 27:12
  expectations that I talked about it are the consensus like
• 27:16
  battleground of where should they be?
• 27:19
  Is it too high? Is it too low?
• 27:21
  You know, depending on what people want from from the stock
• 27:26
  price, you know what they want the stock price to do.
• 27:28
  But but yeah, research, research like plays an important role.
• 27:32
  It's, it's it without research, by the way, like if a company
• 27:36
  had no research coverage, it would be really hard to attract
• 27:39
  institutional investors because the research analysts
• 27:41
  themselves, they play a critical role in the information exchange
• 27:45
  and ultimately benchmarking against what is, what is the
• 27:49
  market thing, right? And as we all know, like markets
• 27:53
  are supposed to be efficient and, and research analysts are
• 27:55
  kind of a reflection of that. But as we all know, you can
• 27:57
  generate alpha from things being out of consensus, company
• 28:02
  executing or delivering results that are better than people
• 28:05
  expected or, or vice versa, right?
• 28:07
  And so, so, yeah, I, I, I think it's important to, in, in a, in
• 28:13
  a situation where a company is doing well and research analysts
• 28:16
  are raising price targets and upgrading ratings, like that's a
• 28:19
  positive accelerating framework, right?
• 28:22
  And then of course, on the other side of that is if research
• 28:25
  analysts are continually to downgrade and lowering their
• 28:27
  estimates, then that's a problem, right?
• 28:30
  And so anyway, I hope that's, that's kind of helpful
• 28:33
  background. The other thing I wanted to talk
• 28:35
  about very briefly is, and for those that aren't interested,
• 28:39
  you feel free to drop off that strata critical.
• 28:41
  The small situation I've been following, it was a a former
• 28:45
  despac. And then they, the company sold
• 28:48
  its blade passenger business, the helicopter business to Joby.
• 28:52
  And so now what they do is they, they do organ transplant
• 28:56
  logistics and facilitation of, of organ transplants, meaning
• 29:00
  like removing organs and then delivering to the people who
• 29:03
  need them. But anyway, the, the company
• 29:05
  announced another great quarter that beat revenues, EBITDA and
• 29:09
  and net income. This company, they also did a
• 29:14
  transformational acquisition of Keystone Perfusion because it
• 29:17
  was like two quarters ago, but this is now the second
• 29:21
  standalone quarter where they've beat and you know performed
• 29:25
  above expectations. And so you know, this is a
• 29:27
  company that is going through is one of these like Tweeners that
• 29:32
  you know did a transformational divestiture and then did a
• 29:36
  transformational acquisition. They've got a ton of runway in
• 29:39
  terms of doing a creative M&A. They just got, they lost, you
• 29:44
  know, when they were blade passenger, the passenger
• 29:47
  business, they had like a few, a few analysts covering the stock,
• 29:51
  which was primarily focused on the the passenger side of the
• 29:54
  business. Whereas now they've gone through
• 29:56
  this, this churn where those research analysts dropped off
• 29:59
  and then they picked up two new research analysts from MSB Riley
• 30:02
  and Craig Hallum. But but yeah, this is part of
• 30:05
  the re rating process. Like as long as the company can
• 30:06
  use execute, they pick up more research coverage and more
• 30:11
  institutional investors didn't see that execution become
• 30:14
  interested in the story. You know, we'll see this gradual
• 30:17
  re rating in the name, which I I still like, but I'll, I'll talk
• 30:21
  a bit more about it probably next week and I have a call with
• 30:26
  management. I'm going to talk to them and
• 30:27
  get some more details about the quarter tomorrow.
• 30:30
  So yeah, that's one that I'm to be excited about.
• 30:33
  It's a smaller position, but but yeah, good company.
• 30:36
  I think it's going to continue to execute.
• 30:38
  And if you look at transmatic, which is a kind of they do some
• 30:42
  similar things. They reported pretty awful
• 30:45
  quarter yesterday. And so you see A Tale of Two two
• 30:48
  cities. But anyway, I'll leave it there.
• 30:51
  I might do another space on AST at some point, maybe later today
• 30:55
  or tomorrow, depending. But but yeah, I just did want to
• 30:58
  cover the Rakuten sale and what it means and, and why they did
• 31:03
  it and the sloppy execution related to that, which I guess
• 31:06
  one last thing I'll say about Bank of America.
• 31:09
  They probably did have this view that, you know, BB7 would be a
• 31:13
  successful mission and then perhaps the stock would have
• 31:16
  performed better. And then, you know, they didn't
• 31:18
  know that the FCC news was going to come out.
• 31:20
  But to them, it was like, oh, great, we got FCC approval after
• 31:24
  this negative event. But but again, I think they
• 31:28
  inadvertently crushed the stock based off of their execution.
• 31:32
  And so now that that's gone, we'll see how things go from
• 31:35
  here. So thanks everyone for joining
• 31:37
  and we'll talk again in a bit. Take care.
• 31:49
  This is the AST Space Mobile podcast.
• 31:53
  We'll just basically turn the phone be simplest regardless of
• 31:57
  where you are. We don't want the user even to
• 31:59
  know that it's connected by satellite.
• 32:03
  Listen, the opportunity that we have is very, very, very large.