Latest / AST SpaceMobile Podcast / Kook's Weekly - September 15

Transcript

Kook's Weekly - September 15 · AST SpaceMobile Podcast

0:06
This is the AST Space Mobile podcast, just basically.
0:11
From the phone, be seamless, regardless of where you are.
0:15
We don't want the user even to know that it's connected by
0:17
satellite. Listen, the opportunity that we
0:22
have is very, very, very large. Large.
0:29
OK, never before have I been this apprehensive the state of
0:35
my microphone. So if I could get and realize
0:40
people might not be able to comment because I'm doing this
0:42
off my computer. But I pray for all of our sake
0:46
that this connection is better. So with that, let's begin.
0:57
Everything happens for a reason is my firm belief.
1:00
For example, I was sleeping, I was there was camping this
1:05
weekend and the tent next to me there was a 5 year old and you
1:08
know, there's separation because of a tent, but you know, it's
1:11
just fun little piece of vinyl. And turns out this little girl
1:14
every night likes to wake up at 2O clock and hysterically cried
1:20
for reasons unknown to myself or her father.
1:23
And that complimented by the freight train that runs by the
1:27
campground or complimented by Interstate 5, which seems to be
1:32
loud all night. I'm super tired.
1:36
And so as I was getting the weekly done, when I came back,
1:39
it was kind of slow going. And so then I realized that,
1:44
well, everything happens for a reason, of course.
1:47
And then ASTX drops a rare Sunday tweet.
1:56
Very rare. And so out of the blue, we have
2:01
our friends in Midlands start to pop up.
2:04
And so he put out a video, which was pretty cool, and it seems to
2:11
show an iOS system not just simply sort of a hacked
2:15
connection, but something looked to be integrated into iOS.
2:22
So we know that ASTS, from the start, a key priority has been
2:26
backward compat about compatibility with existing
2:29
phones. And that has changed.
2:31
But we also know is that as they have partnerships and agreements
2:36
with handset manufacturers, there's going to be increased
2:41
integrations to make sure the functionality is as good as it
2:44
can be and also to add some special features.
2:46
Now here we're seeing an iPhone very, very clearly with a sat to
2:53
sell indicator. And we know that they had this
3:00
deal with Google. And so a lot of us have read the
3:03
side letter with Google, which was really interesting.
3:05
And for those of us who painstakingly read the Legato
3:09
documents, you would see that the Legato documents contemplate
3:15
integration with Apple, specifically Apple devices
3:19
supporting the L band spectrum. And there's real economics tied
3:23
to that. There's really should be no
3:25
reason why that wouldn't happen. Apple is, of course, going to
3:28
accommodate AT&T and Verizon, just like Apple accommodated
3:32
T-Mobile. The one must ask the question A
3:37
is there going to be a formal sort of story hitting the
3:39
Journal or formal announcement of Apple cooperating or
3:42
partnering with AST Space Mobile?
3:44
I think it's very reasonable that that would happen.
3:46
That was enough to drive, frankly, a lot of negativity
3:50
toward Asts when Starlink was rumored to be working with
3:55
Apple, which which of course they they were.
3:58
And it was always kind of silly because you think, well, yeah,
4:01
well, there's going to be a press release that says Apple's
4:03
working with AT&T and Verizon as well, that it sure is the
4:07
sunrise that will also happen. But a lot of us are wondering
4:10
whether there's something more afoot.
4:13
And we'll get to that in a second.
4:15
But this week was a week that I think is going to go down as a
4:21
strategically important week, but not for the reasons the
4:24
shorts think. And so I know there's a lot of
4:27
shorts, some of these guys will pretend to be pretty neutral and
4:30
they'll have a little DM conversation.
4:32
But one guy in particular just saw him really kind of
4:36
arrogantly mocking this face mob.
4:39
And that's it for me. When, when these guys kind of
4:41
reveal their colors, it's the the hedge fund douchebag
4:44
mentality of these guys who maybe they think they did some
4:48
real work, but are generally just coasting on some platitudes
4:52
and some rough assumptions of, of how they think the world
4:56
ought to work. But usually don't understand the
4:59
nuances of ASTSS technology as it relates to MNO partnerships,
5:04
for example, versus just a general sort of Pavlov's dog's
5:08
response of, well, if SpaceX does it, then they're naturally
5:13
going to have a, a monopoly is the general conclusion.
5:16
We've well, I've lived through this phenomenon before where
5:19
every time Amazon put out a press release, something would
5:22
get absolutely obliterate. And so in some in some
5:25
instances, for example, when Amazon put out a releasing,
5:29
we're going to start a pharmacy. Well, a shorted Rite Aid bonds
5:32
because yeah, they should be able to put something like that
5:34
out of business. On the other view, mind, I
5:36
remember it was vimbly in 2018, they came out and said they were
5:40
going to offer effectively Mongo DB for free.
5:44
And Mongo DB got obliterated. And it just didn't make sense to
5:48
me because of the the reasons why Mongo is a valuable company.
5:52
And so that that was a time where then on the market said,
5:54
well, Amazon's come in, surely they will beat you, especially
5:56
if they're giving it for free. My God.
5:59
And the stock was down a ton. I loaded up and it worked out
6:04
pretty well. And so I think this is a
6:06
scenario and we're going to get to it about what SpaceX did, but
6:10
I think this was a week where the market flat out is just
6:13
getting it wrong. And then you just have to ask
6:16
yourself, why is ESTs putting out a tweet on Sunday?
6:20
It's just generally not their MO.
6:24
And so we have some takes on this, of course, these crazy
6:28
kooks that are the space mob, of course, micro analyze everything
6:34
the company puts out and the company knows this.
6:36
And so this is actually this interesting feedback loop of
6:39
whatever details the company puts out, you can bet they laid
6:44
the Easter eggs for us to find. Nothing is random.
6:47
They they definitely know us and they definitely know that if
6:52
they put out something expected to be analyzed the 800th degree.
6:56
And so don't put something out if it's if it's not intentional.
7:00
So this first tweet was great screen grab by Ampan man.
7:03
And it shows the SAT, the cell SAT and then of the upper right
7:07
hand of the phone, it has four bars of service and SAT into it,
7:12
showing that the phone actually knows which network it's on.
7:15
And this is kind of interesting. I'd be curious to get some
7:18
additional knowledge about this because the phone shouldn't care
7:23
which network it's on. It was unclear if the phone
7:26
actually knew which network it was on is the seamless
7:30
integration with the way with how ASTS works.
7:34
So you know, a future question for me is well, was these was
7:39
this done testing where this is the ASTA proprietary network for
7:44
testing or was this being done through the MNO core?
7:49
My strong suspicion is the former, not the latter, but I
7:52
don't know. And these will be interesting
7:54
questions to get to down the line.
7:57
And we know that it works directly with the core as well.
8:03
ASTS put out a press release, and I believe AT&T confirmed it,
8:08
that they had been making calls directly through the M&L core.
8:10
So there might be a nuance here where ASTS is showing what they
8:15
can do, but it's really on their own.
8:17
They have their own core for testing purposes, as I'm sure
8:19
people know. And that might be what's
8:21
happening here. And they're flexing and really
8:23
showing, hey, look at just how incredible our technology is.
8:27
And the question is, who's the audience for this?
8:32
I kind of say that rhetorically. I don't know that the audience
8:36
is us. So we also don't know is if
8:42
there's going to be an Apple announcement either tomorrow or
8:45
soon, or if there's something else coming tomorrow or soon.
8:49
The bears will, of course, mock us with our endless helpium.
8:52
I don't care. A lot of us are up a huge amount
8:55
on this position. And sometimes when you have
8:57
gains measured in thousands of percent, so you get the ability
9:00
to say, you know what, I'm going to continue to be a patient
9:03
investor here and I don't have all the answers.
9:05
I don't need to have all the answers because I I know the
9:07
team and I know the general direction of the company.
9:11
But you have Catsy coming out. Of course.
9:12
I'm really curious to see Catsy think about this more.
9:15
Catsy first takes are great. Catsy sort of in depth
9:19
ruminations are usually better. McKenzie comes out and says
9:22
breaking news, Apple and ASTF showcase iOS 26 development beta
9:27
with native FaceTime app doing live stream over Bluebird
9:31
satellite. We will see what impact this
9:36
has. The next thing we have this
9:37
week, which is a surprise is Wheel of Fortune with ISRO.
9:43
Who knows what is going on in India, but you had the chairman
9:47
I believe put out a slide that says Bluebird mission target
9:52
September 2025. Say what?
9:56
You know these guys are just recently pushed this to I think
10:00
it was Q12026 or maybe it was November launch window between
10:04
November and January. But we thought we had lost our
10:08
slot for the next LVM three rocket and then they put out a
10:13
slide, you know, potentially indicating the contrary.
10:18
I would be the first to say I have no idea when we will be
10:22
launching an ISRO. But that's not the same
10:25
statement as saying I have no idea when we're launching FM 1.
10:28
The answer to that question is the same answer but more nuanced
10:32
because while I don't know, there's strong hope, let's say I
10:37
hope in this instance is the right word.
10:39
There is strong hope that we end up having a Falcon 9 come and
10:44
there is some chance, although seemingly less likely now just
10:48
because I feel like it would have come out that would be on
10:51
new Glen 2. But I do think that we're going
10:54
to have FM one have some visibility in short order.
10:57
My understanding is that you can go ride share.
11:00
I've got some friends who work in the industry, but we don't
11:03
yet have a date. And while that is obviously
11:07
something we're very focused on and would love to see the value
11:10
creation process of this company can continue on while we wait.
11:15
And so let's think you know, we're the one year anniversary
11:18
of the block one launch. You know how how fast a year
11:21
goes. A lot of us can remember being
11:24
up at 1:00 in the morning to catch our bus with, you know,
11:30
thousand other just mute my watch.
11:32
I'm getting getting lit up. What's up?
11:35
A lot of us remember, you know, the thousand, I think it was
11:40
more than 1000 people get together to watch the Block 2
11:43
launch. And, and some people will say,
11:45
well, gosh, I, I wouldn't, couldn't have imagined it would
11:47
take another year before the next satellite goes up.
11:52
And yeah, me either. But here we are.
11:54
And we know that it's going to be soon.
11:56
And we have a lot of satellites behind FM 1.
12:00
And in the meantime, as we'll discuss shortly, there's been a
12:04
lot of coiling of the spring, the spring of value creation, so
12:09
to speak. And time to time the the market
12:13
will let that spring RIP. Until back in July, the market
12:17
really started to look forward to the future value cushion of
12:20
the company. We saw $60.00 a share.
12:22
Then you had August, which is typically pretty crappy in
12:25
September. So nothing really new there.
12:27
I'd been thinking about how to plan for that type of
12:30
volatility. You never do enough, but it is
12:32
what it is. And then people confuse the
12:34
seasonal crappiness of the stock market with other fundamental
12:38
things, for example, delayed launch and then SpaceX
12:42
announcements. And then, you know, the I like
12:45
to say that the stock price writes the news and that
12:48
certainly has happened recently, but the stock price can start to
12:51
write some very different news soon.
12:53
And so if we do a quick little journey down memory lane, we
12:58
have a contributor name at Tutu Fly.
13:03
So it's not King Tut, it's touching Fly and this was auto
13:08
translated from Spanish by Grok, but it's a person that put
13:13
together a nice well summary of, of what's happened and just
13:17
saying, well, the bears are back.
13:18
You know, big frowny face of a chart from going from $60.95
13:23
down to $38.37. I can safely say that this
13:30
probably sucks the most for me versus almost any other person
13:34
on this call or maybe in the world of of a non employee
13:38
shareholder in terms of position sizing.
13:40
And you know what, you just put your diaper back on and get back
13:43
at it. And so this person is clearly
13:46
also able to put their diaper back on said when the market was
13:49
expecting an imminent launch and instead we got delays and
13:53
there's certainly uncertainty. The uncertainty is certain and
13:59
that, as this person continues is an easy cover.
14:02
It's an easy cover for fear. It's an easy cover for people to
14:05
rotate to whatever is flying higher on the day, like open
14:09
door, things like that. It creates a lot of noise.
14:13
People are putting on the long echo star short as TS all sorts
14:17
of things. But this person interestingly
14:22
notes. But again, there's a little bit
14:23
of correlation here. This person has read Katzie's
14:26
work and, and I think mine that saying, well, the Block 2 might
14:32
have been delayed because of a redesign because of government
14:34
work. And, and that might be true.
14:36
It might also just have been some redesign as they try to
14:40
increase the load of the satellite in terms of its, I
14:43
think it's the right term is the duty time.
14:46
And so basically dealing with heat dissipation and power
14:50
loads. We don't know, but but they
14:52
we've clearly had an ability to make great satellites in the
14:55
past. And if things take a little bit
14:56
longer, whether it's for government modifications,
14:59
whether it's for L band, whether it's for increasing power load
15:02
so that the satellites are are more economic, we don't know.
15:06
But then this week, as this person points out and what we'll
15:10
talk to you shortly. We had SpaceX come out and buy
15:14
Spectrum for $19 billion, which of course the market freaked
15:18
out, predictably drilling the stock as if it's, you know, some
15:24
by by 9 operation. And So what was effectively
15:28
admission by Musk that he needed Spectrum, which we had already
15:32
purchased at a much better price.
15:35
The market then immediately assumes that, well, ASTS must be
15:37
obsolete. And quote, the market is big
15:40
enough for ASTS to also have a place in it.
15:43
And it's thinking, well, I don't know, like I feel like it's the
15:46
opposite statement. Maybe the market's so big that
15:48
SpaceX can have a shot at it. And not to be smug, but I truly
15:51
believe that SpaceX is going to be a distant second in this in
15:55
this market and by no means Afds being a distant second.
15:58
And then the person continues to to point out that the regulatory
16:02
risk is is basically non existent.
16:04
So first of all, we've made a head start with the technology
16:08
we've been integrating to the government.
16:11
We have a head start with spectrum.
16:13
We have the FCC coming out just basically saying, put it on my
16:17
desk and I'll stamp it. And they've been doing it.
16:20
We have Brandon Carr again the chairman of the FCC saying that
16:23
this market is quote a game changer everyday just more and
16:29
more validation. And then we have the defense
16:33
industry going crazy. We have golden Dome potentially
16:36
coming this week or next. It's very unclear when that will
16:40
get will get announced and and whether we're in it.
16:44
We have Asts rapidly hiring for government positions against
16:48
strong correlation with golden Dome opportunities.
16:50
But even if not Golden Dome, and this is where you cue the bears
16:53
and go, wow, Kook's already backing off Golden Dome.
16:56
We got him. He's already already moving on
16:59
to the next pump. Well, I, I mean, I don't know if
17:01
they got Golden Dome, but what I do know is they have a lot of
17:03
other government business and the government opportunity is
17:08
far larger than Golden Dome. And I do believe we're going to
17:11
get Golden Dome, but I don't know that.
17:13
And we'll all find out together. And then the person points out
17:17
that, yeah, I'm stock is volatile.
17:21
Anyone that bought the stock in 2024 is up pretty nicely.
17:25
I mean, maybe there's someone who top ticked it at 40 in 2024
17:28
and they're going to be fine, I think.
17:31
And the person just points out today the market is just
17:34
screaming impatience. And his plea is really just let
17:40
it unfold. And the quote that he points to
17:46
is if you can't make money by being smarter, make money by
17:49
being more patient. And this really resonates with
17:51
me. I try to trade from time to
17:54
time. I'm, I'm very open about that.
17:56
This is not who I am. I've, I've spent a lot of time
17:59
talking to people like reform trader, for example, to
18:02
understand his strategy. He makes a lot of money doing
18:04
what he's doing. He's very talented, but he's,
18:06
he's just wired differently from how I'm wired.
18:08
It's just not just not my natural state.
18:11
I'm more of like a ironclad battleship that hasn't inability
18:15
to turn but is very confident in the destination so not willing
18:19
to turn but will instead drive through enemy fire and make it
18:24
somehow some way versus the traders are going to see chart
18:27
patterns and to reform traders. Credit saw it correctly.
18:30
He didn't know why the stock was going to down, but he saw that
18:32
the market was telling him something recently.
18:35
Thank God the market seems to be telling him that the stock is
18:37
going to $100 soon. But my strategy has always been
18:42
to move heavy and slow other people's strategies to move
18:49
light and nimble and quick. And I don't know who is
18:52
ultimately going to be more successful.
18:54
But to me, I kind of have more of a sniper mentality of find a
19:00
really nice little nest and dig in and stay there and don't
19:04
move. Because if you move, you're more
19:06
likely to get blown up. People more think more bad
19:10
things can happen to you. But if you stay perfectly still
19:13
your work, then I think that you're the time is on your side.
19:17
And that's certainly my lived experience.
19:19
And I think this is what this person is saying as well.
19:21
He continues to say ACS is not a telecommunications stock is the
19:25
key to global direct to mobile connectivity, blessed by the
19:28
FCC, backed by AT&T and Verizon and already seen as a strategic
19:32
National Defense asset. Nothing new for anyone that's
19:36
been studying stock, but good, good sort of zoom out reminder
19:41
of of what's really happening here.
19:43
And sometimes it can be so easy to lose sight of the long term
19:48
because, you know, people like me, for example, can be the
19:50
worst centers of like, Oh my God, where's F11?
19:52
And, you know, worry about every little thing.
19:55
And then I zoom out and go, well, I mean, I've had this
19:57
thing for four years, so what's the rush?
20:01
You know, I have a nice IRR on my investment, so it's certainly
20:04
compounded well. And I like to also take a step
20:07
back and realize, you know, if you can have.
20:09
Your portfolio go up 25 to 30% a year compounded.
20:13
You will be rich beyond your wildest treats.
20:16
And so while I have very high return expectations for ASTS in
20:21
my head of like let's just pop to 100, you know, which would
20:23
obviously be much more than 25% move.
20:26
The reality is if they can keep creating value at a 25% clip,
20:30
then the stock price will get where it needs to be in short
20:35
order. But I personally believe that
20:36
this gets compressed on the front end as you're in these
20:40
rapid inflection phases of a stock.
20:43
And I believe we're at a rapid inflection phase of the ASTS
20:46
where I think that well the stock might end up being a 2530%
20:49
long term compounder if you are there for the right.
20:55
Unlock. Events, if you will.
20:57
The realized returns over a shorter period will be much,
21:01
much higher. And this is where my studies of
21:05
things like Tesla and even things like Cheniere, things
21:08
that are like big project based long duration stocks, studying
21:11
when the value creation happened and usually happened quite
21:15
suddenly. And so if you trade it around,
21:17
if you tried to be too cute, you were very living, very
21:21
dangerous. You could in fact miss the bulk
21:25
of the return stream. And so then, when thinking about
21:28
what the company's doing, Katzie found a job worth hiring and is
21:33
looking at. The fact that they're hiring.
21:37
For three shifts, so that each shift is 8 hours. 3 shifts means
21:41
24 hours schedule. They're pumping.
21:44
This is a company that is taking it to the taking it to the end
21:49
zone. Meanwhile, their lead is
21:53
becoming more obvious. And so this week, the thing that
21:58
really rattled the stock, frankly just brought me to the
22:00
point of total exasperation, is when SpaceX bought 50 megahertz
22:07
of spectrum from Charlie Ergen for $17 billion of cash plus
22:11
stock, plus $2 billion of interest release.
22:13
The total of $19 billion this spectrum is for the US only
22:17
makes it very comparable to Legato.
22:20
This spectrum. Is not yet supported by
22:22
handsets, so it requires a change in the chipset.
22:26
It requires new satellites. Current phones.
22:30
Do not support it and it's going to take two years to deploy the
22:35
spectrum. I think the reality is much
22:39
longer than that. And so the market for some
22:44
reason decided to think that this was a near term threat to
22:47
ASTS based mobile. And when I sat there and thought
22:52
about it. So the next tweets, the title is
22:54
just lots of opinions on on what it means.
22:57
I'll just go to the second tweet, which was my own.
23:00
But as I sat there thinking about it.
23:05
And I. Appreciate that I have what is
23:08
perceived to be a bias when it comes to the stock.
23:10
I understand, but the unpopular opinion on the day as the stock
23:14
was getting murdered was that the SpaceX deal was defensive
23:19
and was really not indicative of a company on the offense doing
23:23
what it had done which is pioneering the market.
23:26
But instead, this was an example of SpaceX didn't see this
23:31
market. They were not equipped to tackle
23:34
it at inception. Why?
23:37
It requires the partnership of MN OS.
23:40
It required a form factor that just simply didn't help their
23:45
primary mission, which was to underwrite volumes for Falcon 9.
23:50
Starlink, as we all know, was an unintentional baby.
23:53
They had rockets, but not enough cargoes to underwrite the
23:57
rocket. So they created their own
23:59
customer. They created Starlink, the
24:01
Falcon nines carry Starling satellites which don't need to
24:07
be as big. They're operating in KKU band A
24:11
free with frequency but high frequency don't need the big
24:13
arrays and so D to C would have been very problematic for
24:18
SpaceX. All else equal you don't have
24:21
the spectrum you would have had to go to.
24:22
MNOSI would imagine Elon Musk would rather drink mercury then
24:28
deal with discussions with AT&T's technical team and
24:32
Verizon's technical team. Can you even imagine the
24:36
cognitive dissonance that Elon Musk would have when trying to
24:39
have a productive discussion with an M and.
24:43
O not to say. Anything about the M and OS that
24:46
might be perceived to be not flattering, but I would hazard a
24:50
guess that AT&T and Verizon have very different engineering
24:54
cultures than SpaceX. Just going to put that out there
24:57
as a as a thought. And so this is not how he rolls.
25:04
Did Tesla? Partner with GM?
25:07
No, he just is not a partner guy.
25:12
He does it his own way. He does it full vertical
25:15
integration. D to C is his nightmare.
25:19
He cannot do it by himself. Therefore avoid.
25:23
But now he cannot avoid because there is a clear and present
25:27
danger to his business by AST Space Mobile.
25:31
Even though ASTS won't say it like this, but it's very obvious
25:37
to me that when this service is working and you're able to get
25:41
35 megabits per second to your handset or a lot of people, that
25:46
will be good enough as a terminal, as a hotspot to
25:50
provide the mobile Internet that a lot of people might want.
25:54
And when you start to. Have multi and multi out.
25:58
It's not clear. To me that Asts cannot start to
26:02
disrupt and put a dent in some Starlink demand.
26:07
It's also. Inconceivable to me that Elon is
26:11
going to see another satellite player that is going to onboard
26:14
3 billion Subs and not see a potential risk to that company
26:21
then expanding to fix broadband. We know that's a.
26:25
Possibility it is in the Legato documents and so some people
26:29
just think Oh well they're kook and space MOB are off
26:32
speculating again. Clueless Cole.
26:35
We know how to read I'm. Not a great reader.
26:37
I've noticed that I am mostly like a site word reader at this
26:41
point, kind of look at blocks of words and see what I want to see
26:44
I guess. But I did see what was written
26:47
in the Legato documents and as a very specific admission that the
26:52
Legato spectrum could be used for fixed satellite broadband,
26:57
which is right in Starlink's market.
27:00
Now. Is it such a large leap of the
27:02
imagination to think that AT&T and Verizon might want to cross
27:06
sell such a service to their customers and compete with
27:10
SpaceX that way? Seems very logical to me.
27:13
It's, it's a little bit more of a leap to me to think that ASTS
27:16
is going to go direct to those customers.
27:18
I just don't know that if if the company really has the muscle
27:21
for that. I don't know if they're a go to
27:24
market consumer company. Those would be really useful
27:27
things to look in a mirror and understand if you're the company
27:29
before you embark on that mission.
27:31
But their tech should start to intersect with SpaceX soon.
27:36
Until SpaceX sees that they also have to keep raising money and
27:40
higher and higher prices with these fake step UPS.
27:43
For all these employee sales, they need to have slides that
27:46
show temp. You cannot have these investors
27:51
concluding that a startup company was able to beat them to
27:55
a market that they're perceived to completely dominate and one
28:00
up them. Elon has to create a story
28:02
around this, and he did. And so he made a big bet, a bet
28:08
that allows him to have more control over his destiny,
28:12
certainly to be able to provide a service that could end up
28:14
being more viable. Certainly the current 1 is not
28:18
very impressive, but the problem is it won't be deployed until
28:21
2028. Plus the deal won't even close
28:25
until 2027. And then my understanding is you
28:28
have to get Apple and and really Google and their ecosystem to
28:32
integrate it into their handsets.
28:34
You have to get FCC approval. You have to.
28:37
What else do you have to do? Probably more things.
28:42
And then he was so. Silly.
28:45
To say that he's. Basically going to compete with
28:47
the MN OS and everyone. No, it's because the guy just
28:50
can't help himself. His.
28:52
I like Elon Musk, don't get me wrong, but but the guy's got an
28:55
ego that is quite large and he just cannot help himself
29:01
thinking about an X phone and he'll say, oh, we'd rather do
29:05
anything but build an X phone, which to me just means he's
29:07
going to build an X phone and. What's Apple there to do?
29:13
Is Apple. You know, what I don't know is
29:15
what is Apple's obligation to support that spectrum?
29:20
What is Qualcomm's obligation to support that spectrum?
29:24
These are things I need to research.
29:27
The point is, it's not. Entirely obvious to me that this
29:30
goes off without a hitch in 2028 and King Tut would point out the
29:35
delays on Starship. You know, where's my Tesla
29:38
Roadster is like that FSD history of, you know, some
29:42
dramatic slippage, but even let's just say 2028.
29:45
So AST Space Mobile is going to have a generally available
29:50
service we believe in 2026. Continuous coverage.
29:54
In the markets that matter. So they're going to have a
29:58
three, worst case, a three-year head start versus SpaceX who
30:05
doesn't even have the satellite built yet.
30:08
Now, can they build a satellite? Well, they've proven they can
30:09
build satellites. Are Starlink satellites
30:12
particularly complex? Have they dealt with the beam
30:15
forming issues? Have they dealt with the
30:18
integration with the network cores?
30:20
We know because we saw the interviews what they did to
30:24
integrate with T-Mobile and it took, I mean the fruit of the
30:26
quote, but it was hundreds of thousands of hours of the best
30:28
people trying to make it work wasn't easy.
30:30
Are they going to be able to do the Doppler effects?
30:33
All the software, you know, they're probably not going to be
30:36
able to do in ASIC. And so over the weekend when I
30:40
was keeping one of my friends is a principal engineer at NVIDIA.
30:45
They know a little bit about. Chips and so and he actually
30:49
knew that my life entirely depended on ARST space mobile
30:52
and so we sat down at dinner and he weren't you know, are you
30:57
still involved with AST space mobile?
30:58
When I said well, you know what's in the mob?
31:00
You can only leave the mob, bro. I have Tanner Kurt coming after
31:03
me and so yeah, it's still in the mob.
31:07
And he was like, oh, what's happening?
31:08
Stock stocks been down. And I just said, look, yeah, you
31:12
had SpaceX pylon effect. You have August and September.
31:15
But let's keep perspective. The stock was $2.00 not so long
31:18
ago. And so we started talking.
31:20
And when I asked him about ASIC, he just said, oh, God, you know,
31:24
you really don't appreciate how hard these ASICS are.
31:26
And we were talking as well about Nvidia's own lead and
31:29
whether people would try to do ASICS for AI.
31:32
And he said, well, the problem is, you know, ASICS are so
31:34
specific, you change anything, you gotta redo it.
31:36
They take so long to make. It's, it's such a difficult
31:41
thing when you're dealing with a complex problem.
31:43
What he and I didn't know is just how complex the problem is
31:46
for bandwidth processing. I'm inclined to think it's hard,
31:51
but I don't know. That's another area I probably
31:52
need to research just because I just recently thought about it.
31:56
But no one, not Elon is, is, is likely going to be able to have
32:00
an ASIC on the market shorter than three to five years.
32:05
And so there's satellites, I mean, that's a go too far down
32:08
as I ad Lib this every time. But when you think about it.
32:11
So if they get Starship working, I'd be inclined to bet that they
32:15
will then if they design the V3 satellite with a focus on D to
32:20
C, again, not not clear to me, but let's suppose they do.
32:24
If they do all the beam forming and things like that, they still
32:27
have a power problem. And so these satellites are all
32:32
about power. Your gating factor is power.
32:36
What AFCS is really doing is putting a really big solar plant
32:41
up in the sky where all that power is in to process.
32:47
Bandwidth. And to create these very
32:49
powerful beams, what AFCS does is enormously power consumptive
32:54
because you have to have very powerful beams to reach
32:57
unmodified cell phones. So for Elon to compete, he's got
33:02
to be very power efficient. To be power efficient, you need
33:06
an ASIC. To have an ASIC, you need time.
33:11
And so I just go, well, what is the world going to look like?
33:14
Let's just assume worst case everything magically happens in
33:17
2028. Remind me why?
33:21
ASTS is is second place. It just makes no sense.
33:27
And so I'd read these sell side reports and everyone sort of
33:30
just instinctively goes, well, yeah, there's they'll still be
33:32
relevant. They might still have, you know,
33:34
a little bit of market share and maybe they're worth a little
33:36
bit. No, hold up.
33:39
Let's let's actually think like human beings and think as time
33:43
travellers and let's do the hardest part of investing, which
33:46
is imagining the world six months, 12 months, 18 months
33:50
out. Let's just take 12 months and 12
33:52
months out. We're going to have continuous
33:54
coverage. We're going to have billions of
33:57
dollars of revenue likely coming in.
33:59
We're going to have MNL Pylon because they need to have the
34:03
service that's available. We're having the apparatus built
34:06
today to have far greater market share than anyone could have
34:09
possibly contemplated previously because of things like SAT Bell
34:12
and what we believe Rakuten is going to do.
34:16
We might have this incredible barrier with government work
34:19
with respect to Firstnet, which gives us then yet more spectrum
34:23
to play with. We're going to have the Legato
34:26
spectrum lit up and operational and FCC approved presumably if
34:32
we're wrong on F1 FM, one being an L band bird, which if I give
34:36
it 5050 that were wrong on that ASTS will have its L band birds
34:43
out by then operationalist. Will Elon have?
34:47
He'll just be ramping up. And so if he got everything done
34:50
without testing, without all the stuff we had to do to, you know,
34:53
to make sure it works. And remember, the testing
34:56
intervals are brutal. Here.
34:57
You have these fly over periods. If you miss it, everything just
35:00
starts to cascade. That's why STS was delayed is
35:03
it's just you have so little time per day for your engineers
35:06
to test because of the fly over rates.
35:10
Even if it. Elon pulls it off perfectly.
35:12
We already have been out there for two years generating love
35:16
from all the M and OS consumer affinity.
35:20
It's not obvious to me that Elon just displaces all of that
35:23
magically in the year 2028. I just don't see it.
35:27
I think the market had a deeply emotional response this headline
35:32
and did not think again. I just call it time travelling.
35:36
You know, just really try to germy through time and and
35:38
figure out what a company will look like as what are today
35:42
future expectations become then current and you're living it.
35:47
And so I think. It's the opposite when people
35:48
say it won't be a winner take all market quote so ASTS can
35:52
still be a player. I think it's the opposite.
35:56
I think it's good be a winner take most market and I think
36:00
SpaceX might be a player, but I increasingly struggle to see
36:04
just how powerful they will be and that is what makes a market.
36:11
We also had NPM man come out of of course, with some really
36:15
great analysis and he's very good at on the spectrum side,
36:20
but he also gave us the UBS update and some other people
36:23
with forward me reports. I just saw that they were
36:27
already distributed to the distributor.
36:29
Again, Jagaloon linked out, gave a really great essay that, you
36:34
know, just kind of said the quiet part out loud or wasn't
36:36
even the quiet part because we're all moaning and groaning
36:38
on Twitter and being. To cry babies, but.
36:43
You know, it's been a painful week, but then he he looks at
36:45
what's happened over the past one year in terms of we have our
36:48
own spectrum. Really.
36:51
All of these. Other advantages we have, we
36:54
have Professor Kevin Mack showing up to calm, calm down
36:58
the the children again as usual. And he just went, yeah, largely
37:02
in non of it. You know, Starlink was always
37:05
going to figure something out and be a player in this.
37:08
And he thinks that there's going to be 3 players globally and
37:12
there was there was always going to be the case that Starlink
37:15
would be one of them. And I that's when I zoom out and
37:17
go, what really changed this week?
37:19
Starlink existed, crappy service notwithstanding.
37:22
All all this allowed them to do is to have a chance at having a
37:28
not crappy service and it cost them 19 billion dollars out of
37:36
the get go X satellite X launch X overheads X everything.
37:46
They spent our market cap plus this week just to get to a
37:52
possible place where they could be a distant #2 by 2030.
38:00
Make it make sense. I understand why the market took
38:03
the stock down. I remember and I woke up saw
38:05
that press release just went God damn.
38:08
So yeah, let's not be fooled. I'm not not saying I expected
38:12
people not to freak out, but but when you think about it, I think
38:16
the market got it wrong. And it's the same analog that I
38:19
I lived through when Amazon, you know, appeared to take a shot at
38:22
Mongo DB and Mongo DB ended up being four or five bagger from
38:27
there. So I think that's going to just
38:28
repeat again. Sure.
38:32
And we also had Ampam Man do as a spaces that was really good.
38:36
I've linked that out as well. Looks like there are a lot of
38:38
people that tuned in but. Then let's just think.
38:41
About what Elon said, you know, you had, he was on the All In
38:45
podcast, which, you know, a bunch of guys.
38:48
Being a little bit. Sycophantic to their dear leader
38:51
and someone goes, yeah, Verizon kind of sucks.
38:54
Elon nods and yeah, yeah, and the crowd goes wild.
38:58
OK. You don't think that comment
39:00
made the boardroom of Verizon? World's richest?
39:05
Man arguably top three most influential human beings on
39:08
Earth politically. Same for Hudson.
39:12
Sucks. Hey, I don't think the response
39:16
at Verizon is, oh, we should go do a big deal with this guy.
39:20
Yeah, not, not, not thinking. That's what the take away was.
39:23
He says he will compete. He mentions that these MN OS are
39:29
probably not going anywhere fast because he correctly points out
39:32
that they have a lot of spectrum.
39:36
But this is a guy. Who cannot partner with people
39:39
you know? Just reflect on the If Elon
39:41
couldn't partner with President Trump.
39:45
Why would an? MNO expect a different outcome.
39:51
Apple and Google, I mean, they're just losers in this
39:54
equation. I really don't see any upset
39:55
here. So Apple and Google are sitting
39:58
there thinking, so this guy bought a bunch of spectrum, OK.
40:04
So on one hand he might be an MNO fine, really no big deal to
40:10
them. I wouldn't think it's just he'll
40:12
be stealing market share from AT&T or Verizon or T-Mobile, not
40:18
really creating net new Subs in this market because it's not
40:21
really a growth market. But then they have to dial in
40:24
the idea that. Elon's going to go create his
40:27
own Fire Phone in the Microsoft Phone.
40:31
I can't remember what it was called.
40:33
They have to dial in that probability that there's going
40:35
to be an X phone, and you have to think that the X phone might
40:39
actually be kind of cool. You for people that.
40:42
Are big X users like myself that also use grok like myself?
40:49
Elon obviously knows how to make payments systems pretty well.
40:53
It will likely tie in very nicely to your Tesla.
40:59
Maybe robotaxis will be ready by then.
41:02
It will obviously have. Satellite connectivity you can
41:04
see an ex phone being pretty neat.
41:09
So I wouldn't count him out as I wouldn't count out that that
41:11
device is pretty cool. And so for Apple and Google this
41:16
is not good. Even if you start shifting just
41:18
1% of demand away, those are big numbers and and worse, it ends
41:24
up being something more to that. And Apple missed the AI train.
41:30
Do they really want a? Competitor who's AI native
41:33
coming out with a device, you know, just absolutely not.
41:36
And so This is why I think that people look back and realize
41:40
this is the moment when the world ran to the sweet embrace
41:45
of ASC Space Mobile. Truly.
41:48
The carrier neutral option and now I think we can add a new
41:52
concept here. Not only is it carrier neutral,
41:56
but it's handset manufacturer neutral.
41:58
There will be no Space Mobile manufactured phone, I'm pretty
42:02
confident of that. And so the carrier neutral
42:06
strategy was always well intended.
42:08
AST Space Mobile is very careful to stay in their lane and that's
42:14
why also the big guys didn't put a knife in their back when it
42:20
came to Lagata. Because they know that AST.
42:23
Space Mobile is really warehousing that spectrum for
42:27
their benefit. The same cannot be true of what
42:31
SpaceX is doing with its spectrum.
42:34
T-Mobile might be so dumb to think that Elon, through pure
42:38
generosity with his high cost of capital, decided to spend $19
42:42
billion for the benefit of T-Mobile.
42:44
Now, you'd have to be a special type of stupid to come to that
42:48
conclusion, but you don't know what the boys in Bellevue were
42:51
thinking. It's possible, but I don't think
42:56
any other MNO is going to be so naive.
43:00
And so then I just keep. Going back to why in the world
43:03
would Apple and Google support this spectrum unless they're
43:06
compelled to do so if it's a prelude to enabling?
43:12
The Monster. From their eyes to make his own
43:14
device. And so we saw.
43:17
Some, you know, articles, Tim Farrar being one of them,
43:20
speculating all this is a way to get Apple to force force Apple's
43:25
hand and you know, maybe get Apple to cooperate on this H
43:30
block and AWS 4 spectrum and leave Echostar.
43:35
Really at the. Altar I I don't really know, but
43:39
Musk has been clear over the years and I think I put a tweet
43:43
out on this effect is Musk has plotted a challenge to Apple,
43:49
building his own phone to get around Apple's gatekeeper
43:52
position in the market. He of course, hates the iTunes
43:56
model and with Tesla and Starlink and his other
44:00
properties, like I said earlier, this could be a really cool
44:04
phone. And when you think about the
44:05
expectations of your SpaceX investors, which I know some of
44:10
those people and I know their expectations, these are people
44:13
that have an expectation of having a 5 to $10 trillion
44:16
company. You ain't doing that on Falcon 9
44:19
launches. I'll tell you that.
44:21
That Tam is not there. And so this is a guy that has to
44:25
be an absolute avalanche. Of.
44:31
Tam aggregation to support his current valuation and the
44:37
ambitions of his investors. And so he will have his eye on
44:41
Apple's market cap as his opportunity.
44:46
That's my firm belief. So then what is the comparison
44:51
of these two spectrum properties?
44:53
So of course let's just tune into our resident expert Katsi.
44:57
And so we have two players, we have AST Space Mobile got 45
45:01
megahertz of L band which has better propagation
45:04
characteristics. It's it's a lower frequency than
45:08
SPM and ASTI Space Mobile paid about half a billion dollars for
45:12
that plus some stock worth a couple $100 million plus $80
45:17
million a year of lease payments.
45:19
When all said and done, I haven't actually done this exact
45:22
math. It's easy to do, but just if you
45:24
kind of capitalize that lease payment out in the upfront
45:26
payment we paid. $2 billion. Total it says he's out for easy
45:32
numbers, $2 billion of value for 45 megahertz of of great
45:36
spectrum. Starlink paid $19 billion for
45:41
Megan. Was it 50 megahertz of spectrum,
45:43
something like that of S Band that is not currently supported
45:48
and is going to require a whole lot of work, And they don't have
45:51
the satellites they can support it yet.
45:53
So Katzie points out, well, what is going on here?
45:58
Why are the price differentials so extreme?
46:02
Well, the S Band Starlink bot has alternative uses instead.
46:06
Terrestrial players can use it and other constellations can use
46:08
it. Whereas Legato was really
46:11
orphaned. That's why I call it Alchemy.
46:14
There have been attempt and attempt and attempt to take what
46:16
is otherwise niche applications. So really being using how in
46:23
Marsat was going to use it for supporting narrowband maritime
46:27
applications? But if you try to use.
46:30
It as terrestrial spectrum you had the interference issues and
46:33
it was it was blocked and and the DAD just won't let you do
46:35
it. And so to use it as MSS requires
46:39
a very large phase array because it's lower frequency.
46:44
Waves. Lower frequency waves means the
46:47
satellite elements have to be physically spaced further apart.
46:54
So if you have to space things further apart, that means to
46:57
have a fixed number of elements which you need to form good
47:00
beams. The real estate you need up
47:03
there just needs to be very large.
47:06
So for example. A.
47:09
Half of a wavelength for the L band requires 10 centimeters.
47:14
For the S band, it's roughly 7 centimeters, and so for the same
47:20
gain. On.
47:23
Legato spectrum versus the echo star spectrum.
47:25
You need a 30% wider edge of your satellite, so the total
47:33
area of your satellite goes up by 69% and there's the mean.
47:37
So it all ties back to 4/20/69. That is the end of our call.
47:41
And the stock will go up on the basis that would mean.
47:45
There's a really long way to get to the TLDR on this.
47:48
Sorry, guys, but it's pretty interesting.
47:51
And then Cassie goes on with some more details that are
47:55
beyond my pay grade. But I can just simplify that and
47:59
just say alchemy. You had spectrum.
48:02
That could not be used in its highest value at use by anyone
48:07
else with a company that was going bankrupt.
48:10
Yeah. Basically the.
48:12
Game was up, it's rights were going to revert back to Inmarsat
48:15
and their opportunity would be lost.
48:17
And there was one company in the world that could keep them alive
48:22
so that there was some recovery to their state.
48:25
And that company was a CS face mobile and they got a good price
48:28
for it. And I think that the market is
48:33
probably this week going to wake up actually maybe next week.
48:36
And so when we have the confirmation hearing of Legato,
48:38
which is scheduled for September 22nd, hopefully that doesn't get
48:45
delayed. Hopefully the plan gets
48:47
confirmed and then the next remaining step is FCC approval
48:50
for the spectrum. But at that point, I think the
48:53
market will start to reanalyze their assessment of the NAV and
48:57
earnings power of AST Space Mobile, especially now that you
49:00
just have a a precedent transaction by no other than
49:04
SpaceX marking roughly the same thing.
49:07
You know, we just made the point that it's worse at $20 billion.
49:12
Which is roughly. You know 50 plus dollars per
49:14
share of ASTS space mobile on the spectrum value alone, never
49:20
mind the business value. Never mind the, you know, think
49:23
about the business value as government work, military work,
49:27
U.S. consumer applications, US non government B to B, which
49:33
includes IoT, all sorts of stuff.
49:36
And then you have international operations.
49:38
And then I'm sure I'm missing other things.
49:40
All these, you know, pancakes of value that's stacked together to
49:45
be a big number. All that will be free compared
49:48
to the value of the spectrum. It's not a totally clean
49:52
analysis because then he goes back to alchemy, where if these
49:55
other business uses actually don't happen, then of course the
49:59
alchemy was affected because we were unable to turn lead into
50:02
gold. But you get the point.
50:04
People will start to see that there's some really exciting
50:06
things here. We also had AT&T chime in, so
50:10
John Stanky was at a Goldman conference.
50:12
Basically the summary to him was, yeah, we looked at this and
50:16
we thought someone was going to buy the spectrum, and good luck.
50:19
If you want to be an M&L, you're going to find out that it's
50:22
really hard. People have tried to create a
50:23
fourth MNL in the market and it's a lot more complicated than
50:29
hanging 50,000 towers. So have at it.
50:34
And maybe John Stanky is wrong. You know, Steve Ballmer laughed
50:38
at the iPhone and regretted it. Stanky wasn't laughing at Face
50:43
X, but he was saying that this business was in fact a little
50:46
bit more capital intensive. And then you might think if you
50:48
want to create. And then we also had Firstnet
50:53
always kind of popping their head up to say don't forget
50:55
about us. And you had the Firstnet
51:00
executives explicitly talking about the new technologies that
51:04
they're going to be rolling out next year quote with a
51:07
differentiated product in partnership with AST Space
51:10
Mobile. So don't forget about Firstnet.
51:12
We again don't know what type of contract that will look like.
51:15
Is it lump sum? Is it usage base coming through
51:18
ARPU of their 6,000,000, how many Subs they have?
51:22
But I think it's 6,000,000 Subs that are going to be high paying
51:26
users, you know, for example. And so you, you should hope that
51:32
every first responder has access to this product in 20 bucks a
51:37
month. So I think they were trying to
51:39
pay between 10 and 20 bucks a month.
51:41
You'd hope that everyone has it and it will save lives and it'll
51:44
be great and it'll be a good business for us as well.
51:48
We are also going to. Get Golden Dome soon.
51:51
Trademark so. The.
51:55
Michael Gitlane, if I'm pronouncing his name correctly,
51:58
he's the head of the Golden Dome, is supposed to reveal his
52:02
plan this week. So some of you may remember
52:06
Airplane Lady. Airplane Lady did not return my
52:09
e-mail. So really nothing new in terms
52:12
of my life of women not returning my outreach.
52:14
So that's how you know that nothing in the world has really
52:18
changed. But in this instance, it because
52:19
it was targeted outreach. It wasn't just a general, hey,
52:22
it was like, hey, can I talk to your husband about Golden Dome?
52:25
And the answer to that was no. But I will never forget that
52:29
smile. I felt like she was telling me
52:31
something or she was looking at me like, please, God, just don't
52:35
talk to me anymore on my airplane.
52:37
But we should be getting Golden Dome this week.
52:40
And they're big numbers. There's also going to be a lot
52:43
of players. So I'm not expecting this to be
52:47
particularly easy to understand. And I.
52:51
Really don't know the form it will take.
52:55
I've heard everything from it being done effectively on a
52:58
satellite by satellite deal. Most people creating satellites
53:03
I guess are going to have an insane cost structure.
53:06
We're vertically integrated and I don't think that the stock
53:08
market or normal investors really quite appreciate the
53:12
differentiated and disruptive approach as TA Space Mobile
53:15
took. We're not a job shop doing 1
53:19
satellite at a time, which is the way the other market, other
53:22
market participants do it. We're not doing radiation rated
53:28
satellites that can survive 15 years, which make the cost go up
53:31
20X. This really, you know, gulp,
53:35
starts to look a lot like Tesla's mentality.
53:38
You know, the boomerang plagiarism comes right back at
53:41
you, Elon. And so it really is modern
53:44
thinking on how to be a scale producer.
53:47
So the consequence of that is even if other people had an
53:50
ability to have a technology that could achieve the
53:52
military's goal in a somewhat similar way, my expectation is
53:56
we're able to do it make up a number, but half the price.
54:00
And so if we're able to sell our satellites for 50 plus
54:04
$1,000,000 a pop and then have service revenues on top of that,
54:08
then this could be an exciting business opportunity.
54:13
And so we got some hints from this in the SDA documentation
54:17
that came out forget because the beginning of the year, but they
54:20
started to talk a little bit about the economic model that
54:25
they would have. It's so it's not clear to me
54:27
that we're going to be using our own satellites for this as
54:31
opposed to selling satellites to the government.
54:33
There's a lot of reasons why I could see the government says,
54:35
no, we own it. They already had their fun with
54:38
Star Starlink on this matter with Ukraine.
54:40
And so as an American citizen by support their approach of trying
54:45
to own it. And then they'll have the
54:46
service contracts to operate them and have the software and
54:50
support. And so I've seen this business
54:53
model. I'm involved with a with a
54:54
company that that's going to have something very similar as
54:57
well sell the sell the steel, which which normally in the
55:01
analog world would have no service revenues of material
55:04
amounts. Sort of not talking about
55:06
consumables like selling flanges and and hoses, but actually
55:10
having real ARR. The new world will have
55:13
meaningful ARR attached to it. And so I'm expecting ASTS to get
55:17
something that looks like that. Catsy was out.
55:20
Again, let's see what Catsy had to see on this matter.
55:23
Can't remember everything I tweeted out.
55:25
Oh yeah, of course. The Missile Defense Agency just
55:28
published the Golden Dome request proposal.
55:31
It said as you read it earlier tonight and I forget and Catsy
55:34
didn't include this part and we go to the link believe it said
55:37
that the bidding closes October 10th.
55:40
Yep, offers are due October 10th.
55:44
Now, how is it possible that Gitling is going to be
55:48
announcing his plan this week, yet the proposals are not due?
55:56
It's a question I cannot. Answer but.
55:59
That's what the document. Says And I think that maybe
56:05
everyone can be kind of right, because I do believe that this
56:07
is supposed to be on Trump's desk tomorrow is, is whatever.
56:13
So outside. Of Golden Dome we continue just
56:15
to have a very accommodative government, so not a week goes
56:19
by where Brendan Carr doesn't said it.
56:22
We must go all in on space. This is what I'm also hearing
56:27
from people I know in government.
56:30
Airplane Lady. For example, I made it very
56:33
clear Space Force is the number one priority and small branch of
56:43
the military, but one that's going to have incredible impact.
56:47
And obviously Brendan Carr got the memo and it you can see the
56:51
full transcripts that provided links to it.
56:54
But this is really AUS versus China race.
56:58
And so we know when a lot of us were growing up in the 80s and
57:01
90s, it was really, you know, Rocky Balboa fighting the
57:05
Russian. Now it's us fighting in China.
57:09
And that that fight is in space. And we, we frankly just have to
57:14
win. And we've previously talked in
57:16
other weeks about the changing applications and understanding
57:21
of 5G technology. There was some really core
57:24
articles that Kevin Shannon posted a couple weeks back.
57:26
And I know when I read those, it's really.
57:30
Revealing to me and. In just how early we are in
57:35
understanding these technologies, it's easy to
57:36
dismiss 5G as just phones, but the application radar position
57:41
navigation, tracking and and things that I probably still
57:43
don't yet understand or are just really coming into the fray.
57:46
And that's what again gets me so excited about the dynamic
57:51
business opportunities in front of us.
57:53
For a company that's creating a market really have never been
57:56
involved in something in this size.
57:59
It's creating such a big market and you can see how our
58:01
governments are following in step.
58:04
And so the UK is blowing the door open for this as well.
58:07
There's a link from Peter Lenmark on this.
58:09
And then all the while ASTS is just building out more capacity.
58:13
And so they've been doing some things in Homestead, FL looks
58:17
like there is a set back in that for reasons I don't really
58:20
understand, it might have been space constraints and and
58:23
there's some government inducements here and there.
58:25
I saw some bears laughing at the $200,000 of incentive funding,
58:29
but I think they might be missing the forest for the
58:31
trees. But ASTS is really ramping up
58:35
its factories. And what's interesting
58:37
observation I learned this today listening to former employee, is
58:42
just how tight the top engineering talent is.
58:46
And so this new homestead facility is just going to have
58:48
60 employees. Might seem small, but BW3, for
58:51
example, seem to have really been built by a core team of 12.
58:56
You know, so I want to have this big, these big Staffs, when you
58:58
really boil it down to the key, from what I understand, the big
59:02
key individual contributors, it's actually quite, quite tight
59:05
team. And so if they're going to have
59:07
this facility in Florida that that will owe 60 employees, that
59:13
could end up being a very important recruiting tool so
59:16
that they're able to recruit outside of Midland, which is a
59:18
tougher place to recruit that type of talent.
59:20
And so the the 60 number, well, it might be small.
59:23
The magnitude and the importance of that number might be large
59:26
speculation on my part. Stay tuned for, you know, things
59:30
that Jen. You know, prove me right or.
59:33
Wrong. You know, as Elon kind of
59:36
quickly commented on Tim Ferrar's.
59:39
Commentary. God, I'd be mortified if Elon
59:42
kind of retweeted me and went well, most of what Kook said in
59:45
his podcast was wrong. And be like, This is why I stay
59:48
anonymous people. Oh and just delete my account
59:50
and go on my business. But let's think about going on
59:54
your business. And so is Starlink a good
59:56
business? You just got to wonder, you
1:00:01
know, sometimes like the, the world just kind of assumes
1:00:04
things because you have revenue growth rate, you have mystique
1:00:08
and aura. But here you have a private
1:00:09
company that I could almost bet he was not providing cohort data
1:00:12
to people when you, I know how private markets work, for better
1:00:16
or worse. And I'm the type of guy that
1:00:18
asks very detailed questions and I, I always go to what I call it
1:00:22
bare steal. And so I'd be analyzing the
1:00:25
characteristics of every individual user, which would
1:00:28
mean I'd be going through the cohorts, understanding exactly
1:00:30
what the cost to acquire them as exactly what the ARPU is and how
1:00:33
it moves around, exactly what the terminal cost, exactly what
1:00:36
the retention is, and really understand how the business
1:00:40
works. And, and this would be a
1:00:41
complicated one to understand because it's not so simple.
1:00:44
It's not like your typical TC business because you have this
1:00:47
double churn, you have the churn of the consumers, but then you
1:00:51
have the churn of the satellites.
1:00:53
And so I was talking to a friend and he put out a number, I came
1:00:57
to a different number. But the the conclusion is still
1:01:00
the same is when, when Starlink, you know, basic business model
1:01:06
is obviously sell you a terminal, they take some loss on
1:01:09
that and then you pay some amount of money.
1:01:12
Initially it was over $100 a month.
1:01:14
Now they're cutting some prices, that's your ARPU and you have to
1:01:18
have this constellation flying up there because they're flying
1:01:21
at 300 kilometers, you know, low to to help with the budget, link
1:01:26
those satellites, reorbit it fast.
1:01:29
And so that's the the churn of the fleet.
1:01:32
And so it looks like satellite needs to replace 5.
1:01:35
I'm sorry, Starlink needs to replace 5 satellites per day,
1:01:39
which means that they have a full Falcon 9 going up every
1:01:43
five days or more just to hold the constellation flat.
1:01:50
So just thinking simplistically about that and the right answer
1:01:53
is look at their direct cost. But you could also look at their
1:01:56
opportunity cost, which is what I did until ignoring the cost of
1:02:03
the satellites, ignoring all the overhead, just the direct cost
1:02:06
of the launch at retail, that's 5 billion versus a year of
1:02:11
maintenance cap X just to keep the constellation flat.
1:02:14
Now, if you say, well, that's the opportunity cost of the
1:02:18
launch isn't in the, I don't know what their margin is.
1:02:20
I'm sure we can figure that out. But let's just say 50% margin,
1:02:22
probably high. Then that'd be 2 1/2 billion
1:02:25
dollars of replacement cap X for customers that might not look
1:02:28
that good is again, your CAC is, you know, advertising in as much
1:02:33
nutritional way, but your CAC is that terminal you're
1:02:35
subsidizing. So is Starlink a good business?
1:02:39
Is this one of these things? People wake up one day and
1:02:41
realize it was all this breach to the future, that it it really
1:02:45
wasn't that good. Unless they can.
1:02:49
Get V3. Is this a story where it's an
1:02:54
unless versus if story? If they can do all these things,
1:03:00
that's a good investment, as opposed to unless something bad
1:03:03
happens, it's a good investment. It's important thing to think.
1:03:06
About and I introduced this concept in my STS work.
1:03:09
You can find it on my pin tweet where I started to look at the
1:03:13
transition of IFS. You know, if they get FCC
1:03:17
approval, if the satellites work, if they can produce, if
1:03:21
they can raise money, if, if, if all of a sudden those things
1:03:24
flip to unless, you know, unless a meteor strikes Midland, unless
1:03:28
the FCC revokes the FCS, unless they, you know, the cash was
1:03:34
stolen. You know, these things are now
1:03:37
in less statements for Asts and we still have some IFS to prove,
1:03:40
Don't get me wrong, but Starling might have some foundational ifs
1:03:45
to prove. It might not actually be a good
1:03:47
business right now and I don't know if people understand that.
1:03:52
And they're really betting on a transition to the threes in in
1:03:57
Starship. Not clear to you.
1:03:59
Probably not unreasonable. That's frankly for people.
1:04:01
But it just might be useful to understand just how vicious
1:04:06
their maintenance capax is when then also thinking they just
1:04:09
added $20 billion of of book assets for Spectrum, the big
1:04:14
number. And then they're going to have
1:04:17
to build his V threes and dedicate some capacity toward
1:04:19
DUC away from their fixed driving business.
1:04:23
You just got to ask, you know, sometimes not all as as well in
1:04:27
Camelot, you got to check the math.
1:04:30
They also might have a regulatory problem.
1:04:33
They've moved so fast that regulators could have never
1:04:36
contemplated. The.
1:04:40
Speed at which they launch things and so the overloading of
1:04:44
our orbits because he's on this land grab might be something
1:04:47
that the ITU just simply says no more.
1:04:51
You're clogging up orbit. You're polluting through re
1:04:54
entry and look at these guys of the AST space mobile.
1:04:57
Look, they're only launching 100 satellites not 8000 and they can
1:05:03
kind of do the same thing without all of the problems.
1:05:07
So why don't you all go back and redesign to be more
1:05:12
conscientious. It's kind of like we used to
1:05:14
have oil derricks, you know, lining the shores up and down
1:05:19
everywhere. And when I see pictures from the
1:05:21
1920s, it's somewhat astounding to be when you look at the way
1:05:25
America used to look where there be oil derricks, you know, up
1:05:30
literally in the middle of Los Angeles and and then the world
1:05:34
just, you know, got more efficient but also said no,
1:05:36
you're going to do it in a different way so that this is
1:05:39
not what it looks like. And I think the orbit might have
1:05:44
a similar dynamic. Next we have, you know, some
1:05:47
continued news from New Glenn two.
1:05:49
I'm excited to see that launch. Godspeed for it to be a safe
1:05:52
flight. And then finally the last thing
1:05:55
of note is Tim put out an article which actually not to be
1:05:59
repeated. Thought was an interesting read
1:06:02
and was curious to see you know his his takes on this.
1:06:07
I didn't think his article was that inflammatory for Wydsworth
1:06:10
and all things Elon Musk responds and just went quote
1:06:15
pretty much everything is wrong in this article.
1:06:18
And that were. Brought great joy and jubilation
1:06:21
to the space mob and watching a guy who's usually not writing
1:06:26
reasonable and sensible things about AST space mobile instead
1:06:30
of just spreading fear, uncertainty in doubt being laid
1:06:34
out in the most public forum one could possibly get laid out in.
1:06:38
So hopefully that will make Tim a little bit of humility.
1:06:41
But apparently his thesis about trying to pressure Apple is not
1:06:45
correct according to Elon Musk. So I hope everyone enjoyed the
1:06:50
weekly and I hope that the IT quality is a little bit better.
1:06:55
I know people can't comment. I don't know why that the
1:06:59
desktop doesn't let you do that. And so the only other thing I
1:07:02
was just going to comment on is this week I just made a couple
1:07:04
other tweets on some other investments I've made.
1:07:08
I just want to clear up any confusion.
1:07:10
I made a comment where I was diversifying away from ASTS that
1:07:13
that wasn't true. It was just I have some extra
1:07:15
money that is not an ASTS. And so I had bought DMYY on the
1:07:19
speculation that they would close a merger with Horizon
1:07:23
Quantum, which is a software company that allows you to code
1:07:27
in existing software languages and have it translated to the
1:07:30
code that allows you to develop in Quantum.
1:07:34
Did did some. Work on this.
1:07:35
There's not a whole lot of publicly I have to read the deal
1:07:37
documents and it's a super tight float.
1:07:39
So I thought it could have a predictable outcome.
1:07:41
And it was really mad at myself for missing iron Q, Even though
1:07:44
I, I had looked at it, had talked to quantum physicists who
1:07:48
have some friends that have worked at CERN that know about
1:07:50
that and really kind of lamented not being in the right place on
1:07:54
that. So I own some of that as really
1:07:56
schmuck insurance on having something in quantum of a real
1:07:59
company. The CEO there is a PhD, his name
1:08:02
was Fitz, John Fitzgerald, impressive individual.
1:08:06
And I would say it's medium conviction investment of mine.
1:08:10
I, I don't know what I'm going to do with it, but it's been
1:08:12
working recently. And then I also have a position
1:08:14
in MFI, which people might have been a little bit more surprised
1:08:17
for me to tweet about. And you taught he's written a
1:08:21
lot about that. I don't clog up people's Twitter
1:08:23
on those things because I know people just want to hear me
1:08:29
summarize the news on AFC Space Mobile.
1:08:32
But that just has a really crazy fact pattern in terms of the
1:08:35
cleanliness with which an individual bought a corporate
1:08:39
shell and knowing enough about how these things work, just saw
1:08:43
a fact pattern that suggested with their extreme high
1:08:46
confidence interval that they are going to do some type of
1:08:49
deal. And when we looked into the
1:08:51
background of this individual, you know, all jokes aside, it
1:08:53
looked like he was Satoshi. And he's probably not Satoshi,
1:08:57
but he has a billion dollars of Bitcoin and a whole lot of
1:09:00
really interesting crypto assets, including HBX, which is
1:09:02
a big exchange. And so if he was going to bring
1:09:05
that to the US, just because of the float dynamics of, of how
1:09:09
these RT OS work, they, you have a lot of scummy RT OS which are
1:09:14
just pump and dumps. And but they're really bona fide
1:09:18
vehicle to bring things public. I currently looking that they're
1:09:22
proposing the idea of my firm on one, because Spacs have their
1:09:25
pluses and minuses. And in some instances, if you
1:09:28
don't need proceeds, these RT OS can actually be really effective
1:09:31
ways to IPO. And when it comes to crypto, it
1:09:34
can be an expedient path. And so I own some of that, but
1:09:37
just wanted to just clarify, you know, I don't know if I can
1:09:41
clarify. It would just tell people I'm
1:09:43
involved in those and they're much small, much, much smaller
1:09:47
bits by orders of magnitude to ASD Space Mobile.
1:09:52
But I like to kind of have some of the little iron irons in the
1:09:54
fire and just keep the blood pumping.
1:09:59
And I'm not a good trader. And so these things I've owned
1:10:02
for five or six months, but just wanted to do a lip service of
1:10:06
that. And I also own obviously my VFC
1:10:08
still, which was great and not great.
1:10:10
And then I recently built a position and Weight Watchers of
1:10:13
all things. And people are like, wow, let's
1:10:15
unsubscribe from this cute guy, obviously doesn't know what he's
1:10:18
doing. But I, I am a distressed guy by
1:10:21
training. And so I, I look at, try to look
1:10:24
at, you know, what's going on in active bankruptcy dockets.
1:10:27
And so I have a position there and I can, that was one I've
1:10:30
actually intended to write up for for people, not as a code
1:10:33
red, but really as a cutback, which is the kind of a different
1:10:36
categorization of a theme. But they had a really crappy
1:10:39
Porter last quarter. And so it's when I want to just
1:10:41
see the numbers come in and build my own conviction before
1:10:45
writing more publicly about it. Because God forbid people invest
1:10:48
in it while I'm still also, you know, very fluid in my thinking
1:10:53
and just want to try to prevent lower conviction things at least
1:10:57
having my name attached to it. So that's the story there.
1:11:01
I hope everyone had a great week.
1:11:02
Hope people can actually hear me.
1:11:03
It'll be really disappointing if I get off this and then people
1:11:05
say. That.
1:11:08
No one could hear me and I was talking to myself for a fun
1:11:10
time. Mats, have a great night.
1:11:15
Thanks for listening. To the AST Space Mobile podcast,
1:11:19
if you enjoyed this episode and you'd like to help support the
1:11:22
podcast, please share it with others, post about it on social
1:11:25
media, or leave a rating and review.
1:11:28
To catch all the latest news about AST Space Mobile, make
1:11:31
sure to subscribe. Thanks again and I'll see you
1:11:34
next time. We're doing something.
1:11:39
Very, very big and I think with this technology we can really
1:11:42
affect billion lives. Safety Space Mobile is the only
1:11:46
company that has full technology to deliver cellular broadband
1:11:50
connectivity directly from the state.
1:11:53
To do everyday smartphone, people will just basically turn
1:11:56
their phone. And be.
1:11:58
Seamless, regardless of where you are, we don't want the user
1:12:01
even to know that it's connected by satellite.
1:12:04
Our role. Is to bring this into reality,
1:12:07
always in partnership with the animal.