Latest / AST SpaceMobile Podcast / Anpanman - Navigating the Wall of Worry: Margin Calls, AI Tizzy, and the SpaceMobile Outlook

Transcript

Anpanman - Navigating the Wall of Worry: Margin Calls, AI Tizzy, and the SpaceMobile Outlook · AST SpaceMobile Podcast

0:12
This is the AST Space Mobile podcast, just basically.
0:17
From your phone and be seamless regardless of where you are.
0:21
We don't want the user even to know that it's connected by
0:24
satellite. Listen, the opportunity that we
0:28
have is very, very, very large. Hey everyone, thanks for joining
0:35
this midday space. I figured I'd fire it up because
0:40
just seeing all the consternation out there, I've, I
0:44
figured it would be good to just start a space and help people
0:50
breathe a little bit release because I think, yeah, I wanted
0:54
to cover a few things and just remind people that, yeah, this
0:59
is the market. It's a living, breathing,
1:01
breathing thing. And you're going to have
1:03
volatility. And when the market has to
1:06
process new information or, you know, when it's faced with a
1:11
wall of worry, you're going to have periods of volatility.
1:13
And so This is why, you know, like I've, I've been saying for
1:19
many years now, don't be on margin.
1:22
Use, you know, leverage and margin sparingly, only
1:24
tactically for short periods of time.
1:27
You don't want to be caught in situations where you have
1:31
conviction in something and then you know, a decision is made for
1:34
you because you're over leveraged and you end up having
1:38
to get tapped out. So and I certainly some of the
1:42
moves in the market today are and indicative of that where I
1:47
think there's quite a bit of de grossing that's going on.
1:49
People might be getting margin calls.
1:51
And so you're going to see some of these exaggerated moves.
1:54
But but yeah, today, you know, this week it we started off with
1:58
some concerns around AI basically usurping every one of
2:02
their jobs. And then that died down, down
2:05
for a bit. And, you know, the market
2:06
rallied off of the back of that after digesting, I think it was
2:10
a Citrini, you know, the the piece that that that person had
2:16
put out envisioning a scenario of 2028 where AI, you know,
2:22
disrupts a ton of white collar jobs and, you know, unemployment
2:26
goes to 10%. And, you know, as I guess as
2:29
young people would say, they were do maxing and that got the
2:32
market in the tizzy. But but yeah, there's today
2:36
there's a whole host of other things for the market to worry
2:39
about and including, you know, aforementioned piece.
2:42
But I didn't want to cover some of those things and just kind of
2:46
go through why the market is having this big, you know,
2:50
visceral reaction. And also just a reminder to
2:53
people that stocks can go up and down for no reason.
2:57
Like I I've seen whether it's AST or, or T1 energy or some of
3:02
these other names, people like frantically trying to find a
3:06
reason why the stock rises down, right.
3:08
And so I think a the first step for anyone who's, who's planning
3:13
to invest in the markets and be active and you know it be
3:17
invested in single names, you have to put together a watch
3:21
list of the sector that your particular companies are in.
3:24
So if it's for ASD, you should also be talking Rocket Lab,
3:28
Firefly, Intuitive Machines, Red Wire, Carmen, some of these
3:32
other names, because when you have context, it gives you the
3:36
ability to say, OK, well, my, my particular stock is down 5678
3:41
percent, but the entire sector is down the same amount.
3:45
Maybe there's nothing going on with the company.
3:47
It's just beta, which you know, is, is market movement.
3:52
Every, every stock has some level of beta Co movement with
3:56
the market. And so it may not be something
3:58
that's impacting your particular company, but it could be
4:00
something that's impacting all the companies.
4:03
And so for T1 Energy that would include names like for solar in
4:07
phase SEDGCSIQ, some of these other names.
4:11
But but yeah, once you have the context like you know, any given
4:16
day of the stock is up a lot and the entire sector is also up,
4:19
then maybe it's not your brilliance that your stock
4:24
picking brilliance that's causing the the stock to be up,
4:27
but it's actually the sector. Perhaps you've got macro guys or
4:31
factor guys who are looking for exposure in that, in that sector
4:34
and they're buying that, that, you know, various names or they
4:39
might be buying ETFs which hold a basket of those names.
4:42
And so you're going to have Co movement, right?
4:44
And so today is no different. You know, there's been, I mean,
4:48
T1 energy in particular, there are people who are using AI and
4:52
trying to find, you know, different reasons why the stock
4:55
is down. The stock is down because the
4:57
sector is down. And I pointed this out earlier,
5:00
the stock had outperformed over the last two days and that was
5:04
in the face of First Solar having a pretty bad, well, they
5:08
had a good quarter, but they had bad guidance.
5:10
And First Solar is kind of the proxy for the sector in
5:13
particular. And I'll talk about it a bit
5:15
more. But those those were company
5:16
specific issues around international.
5:20
And so T1 Energy did pull back a little bit, but it pretty much
5:24
hung in there, which quite candidly was a bit of a surprise
5:27
to me. But now you're saying it kind of
5:30
give back some of those that staying power and now it's
5:33
catching up with for solar and CSIQ and some of these other
5:36
names. And so it's not, you know, God
5:39
hasn't chosen your stock to go shit on or there's not something
5:44
nefarious going on or some problem.
5:46
It's the market. And sometimes it's hard to from
5:50
a psychological perspective, to accept that that perhaps
5:53
something's out of your control and you don't really know what's
5:56
going on as, as any, any perfectly normal human being,
6:00
you want to know exactly the reason and cause for things,
6:04
right? I mean, it's just, it's just
6:06
part of human nature to have an explanation for why something
6:11
is, is happening in one way or this, you know, This is why we
6:14
pursue science and these other things.
6:16
And so when a stock price is down, the first inclination for
6:20
people that don't follow a sector will be like, well, why
6:22
is it down? And you know, what's going on
6:25
here? And oftentimes it's the market,
6:28
right? And so I think it's something to
6:30
keep in mind. And when we talk about high
6:31
beta, beta is the movement that a stock price will have relative
6:37
to the market. And so when the company has a
6:39
high level beta, so you know, Russell 2000 is down 2.2% right
6:43
now, which is a really big move. When you have higher beta names,
6:48
they'll they'll move at a higher multiple of 2.2%.
6:51
They might move, you know, three times that move or two times.
6:55
But anyway, but I think it's, you know, something to keep in
6:58
mind. But as I, you know, take a step
7:00
back and look at the market, we've got this whole new wall of
7:04
worry. So Iran, I'll just go through a
7:07
list here. But, you know, Iran has been
7:08
percolating a bit. You know, it seemed like we were
7:10
going to get some relief. It seemed like perhaps talks
7:13
between the US and Iran. We're going or we're expected to
7:17
go, OK. I mean, who knows what the
7:18
ultimate outcome is going to be. But obviously the US is is
7:22
gearing up for a potential attack.
7:24
And, you know, there was some news today that IA i.e.
7:28
A inspectors have noticed, you know, different movements and
7:34
work around the old facility, the in Iran that was bombed.
7:37
And so there's some concerns that perhaps talks aren't going
7:40
to resolve anything that the US is going to go in the US and,
7:45
and, or Israel or in combination, depending on
7:49
sequencing. And there's even there's a host
7:51
of, you know, commentary and analysis of, you know, Israel
7:56
lead it. Does the US lead it?
7:58
But yeah, there that's a big concern going into this weekend.
8:01
On top of that, you had PPI come in hotter than expected due to
8:05
stickiness around services. And because of that, you know,
8:10
the, the market started pulling back, especially high beta names
8:13
because the reason why a high beta names pull back if if
8:17
inflation is hot is that in that scenario, you're not going to be
8:22
looking forward to rate cuts. And at worst, you might have
8:25
rate hikes, you might have increases in interest rates.
8:28
And then on top of that, you know, when you are in a
8:31
situation where rates are coming down and perhaps liquidity is
8:35
being put into the market, that's generally supportive of
8:39
higher valuations. It's also supportive of, you
8:42
know, companies that are dependent on funding going
8:46
forward. So companies that don't make
8:48
money currently will need to raise capital via equity.
8:53
And so that's that's predicated on valuations being robust.
8:58
And then of course, if they're borrowing money, being in a low
9:00
rate environment helps. And so with hot PPI, you know
9:05
that that has, you know, put the market on notice about potential
9:10
rate cuts and, and so you know, sectors are reacting
9:14
accordingly. And so whether and you pick the
9:16
sector, if it's if it's quantum names, if it's space names, if
9:21
it's crypto, if it's any of these sectors, defense, next
9:27
generation defense name, they're all down.
9:29
They're all down pretty big. And so, yeah, that's, that's
9:34
just kind of the nature of the beast, right?
9:35
Like the market adjusts to new information and it looks for a
9:40
trend. And so if, if inflation starts
9:43
to trend a little higher, then, you know, people are going to be
9:46
concerned about potential rate cuts, which generally speaking
9:49
are when you're in a interest rate environment, of course, for
9:53
the right reasons. But if it's the economy is going
9:56
strong and, and rates are are are coming down and that's going
9:59
to be very supportive for growth companies.
10:01
But if rates are coming down, for example, and the economy is
10:05
doing poorly, then there's some offsetting balance there, right?
10:09
You know, if you're in a financial crisis and rates are
10:11
getting cut and liquidity is being pumped in the market,
10:15
there is going to be some level volatility and, you know, a
10:19
pullback in valuations, of course, until things settle out.
10:22
But but yeah, the hot PPI number, I mean, just throw that
10:25
into the mix. The other thing, this whole idea
10:29
about AI killing jobs that people kind of digested that and
10:34
we're able to process it. And you've got, you had a number
10:37
of people come out, whether it was like Citadel or, or some of
10:40
these other, other experts. Well, you know, the Centrini
10:47
analysis or the, the, the, the narrative that they put
10:51
together, you know, there were all these different flaws,
10:53
right? And so I guess that gave the
10:56
market some level of comfort. And then of course, block
10:59
yesterday came out and said they were going to, and what was it
11:02
they're going to remove? I think it was 40 or 50% of the
11:07
workforce. And so, you know, then stock
11:10
price like gapped up 20% on that news.
11:12
And then of course, this whole narrative around AI replacing
11:15
jobs came back to the came back front and center.
11:18
And the whole idea there is that, you know, white collar
11:21
jobs will get disrupted and then, you know, it causes this
11:25
cascading effect where if you don't need humans and for these
11:29
jobs and you know, corporates, corporations will extract a lot
11:32
of profits. But then for what?
11:34
To what end, right? Because then those white collar
11:37
jobs that are lost, you know, you don't have that income being
11:39
spent and then and basically loses, you know, housing values
11:43
come down, you know, restaurants, you know, any
11:47
number of things, cars, it all kind of cascades, right?
11:50
So if you get to a point of unemployment of 10%, that's not
11:54
good for the economy. But I think, you know, there's
11:57
some nuances to it. And and of course, people with
12:00
this whole IAI scare, people are trying to price in everything
12:02
immediately. But I think, you know, me
12:05
personally, I think there's going to be winners and losers
12:07
in that situation where, you know, perhaps some white collar
12:12
knowledge workers are going to get loose jobs, but then, you
12:15
know, people become more productive.
12:17
But I also think that for a number of these jobs, there's a
12:20
certain element of human experience and judgment that
12:23
can't be replaced, right? And so maybe I'll do another
12:26
space about this in the future, but I do think there will be
12:32
kind of the pendulum, the pendulum swinging right now to
12:35
AI everything. But I think eventually it will
12:37
go too far and people will realize the limits of that and
12:40
the pendulum will swing the other way where people are going
12:42
to pursue human expertise, human judgment.
12:46
You know, I, I, I talked about this with my wife earlier today
12:49
about how sports is 1 area that's not going to be disrupted
12:53
by AI because the fact that who wants to watch a soccer game
12:59
with robots playing each other? You want to watch humans and the
13:01
whole enjoyment of sports or, or music performances or any of
13:06
these things is that you have a great level of empathy and
13:11
understand the achievement that these humans have obtained.
13:15
And so having robots do it, it's kind of it, it makes you
13:20
indifferent because I like, I think when I look at AI slop
13:23
that gets posted on Twitter, you immediately tell like, that's AI
13:27
driven. And then I, I've mentioned this
13:29
before, like I've gotten to this mode where I just gloss over it
13:32
because it, it doesn't really add anything.
13:34
Whereas for me, having real like human perspective and opinions
13:41
matters more. And so I think, you know, in the
13:43
future, you might end up in this, this bifurcation where
13:47
people will go seek human content.
13:50
And some, you know, like people talk about like movies are going
13:53
to be totally AI generated. That's fine.
13:55
But then, you know, when I go to the theater or when I watch
13:58
something, I will want to know that a human made something
14:02
because like there, there's this connection in value in that.
14:05
It's just like when I think about like, what is it like
14:09
food, you know, that people put a a premium on organic food
14:13
versus, you know, food that was not that's not organic or it's
14:18
processed. And so I think there's going to
14:20
be this bifurcation where people are going to pursue things that
14:26
are human generated or whatever it is, right.
14:29
But anyway, but yeah, I mean, I didn't mean to go off on a
14:32
tangent, but that's another thing to throw in in there.
14:35
Another area of concern for the markets is private credit.
14:37
And so, you know, I, I have a small position in the company
14:41
called Pagaya, which has been getting absolutely demolished.
14:43
And that that company is, you know, it is exposed to private
14:49
credit, although they, they generate private credit, you
14:52
know, ABS vehicles and, and the like.
14:54
But overall, for those people that aren't following news
14:58
closely in capital markets, you know, private credit is this
15:03
this kind of area that is ballooned in size.
15:05
And it's versus public credit where, you know, these credit
15:08
securities are traded, private credit are closely held
15:11
securities. There's, you know, like public
15:13
market for them. And so, so this is an area
15:16
that's, that's exploded over the over the last few years.
15:19
And so within, whether it's private or public credit for
15:22
that matter, you know, there has been concerns around a few, you
15:27
know, high profile bankruptcies. For example, there's a, there's
15:31
a new bankruptcy out in, in the UK of a mortgage lender.
15:35
That is that I, I believe there was fraud there.
15:38
There was been, there's been like 2 big frauds here in the
15:40
US. One is first brands and the
15:43
other one is tricolor. And so, but I'm adding on top of
15:47
that the, the skittishness, you also have, for example, these
15:52
industries that are perceived to be being disrupted by AI, their
15:56
credit is started to underperform pretty
15:58
significantly, right? So software credit, for example,
16:01
software has been, you know, whether it's like private equity
16:04
firms like Vista or, or Tama Bravo, you've got a number of,
16:09
you know, for the last, I guess, 3 decades, software has been a
16:13
very attractive area for private equity to go in.
16:16
You do a leveraged buyout, you take out a lot of costs, you cut
16:19
development costs, and you basically run these things for
16:22
profits. And this is typically for like,
16:24
you know, legacy software where an enterprise is using some old
16:28
software, they pay for maintenance and they keep it
16:30
going. And so, and then you've got
16:32
these PE guys who come in, they buy it, they might improve it to
16:35
a degree. They might, you know, merge it
16:36
with other things and then they raise prices, right?
16:39
And so, however, with the advent of AI, and if you think about
16:43
like what and Tropic is doing, Claude, it's like, hey, we can
16:46
develop our own tools. We don't need to use some of
16:48
these, whether it's legacy software or it's newer stuff
16:53
like software as a service, we're just going to like do our
16:56
own thing, right? And and so that's been a huge
16:59
hit to the credit markets because then people, what's been
17:03
going on software, people are trying to extrapolate that to
17:05
other areas that might get disrupted by AI.
17:08
And so with a few of these like credit blow ups and then you've
17:11
got, you know, sectors that are under pressure from the
17:15
potential of AI, you've got like banks, business development
17:19
corporations and private equity firms that are taking pretty big
17:22
marks this past quarter. And so that's, that's been
17:26
weighing on the markets. And, and so, yeah, I mean, you,
17:29
I just listed off 1, let's say 1234 or different things, right?
17:36
That's getting the market into that system today.
17:38
And then you've got, of course, February month and today's last
17:42
trading day for February. And so hedge funds, which are,
17:46
you know, portfolio managers and also, you know, the hedge fund
17:50
in in total, like portfolio managers are judged by month to
17:53
month performance and then those numbers are reported to LP's.
17:56
And so the moves today are being further exasperated by people
18:00
wanting to either cut risk or clean up their books and, you
18:05
know, have the ability to explain why they either had,
18:09
well, most likely had like a bad February.
18:11
So, so all these things are kind of playing into it.
18:14
And I think, you know, it's again, it's important to
18:17
understand like what's going on at the macro level.
18:20
If you're going to be an investor in single names, 'cause
18:24
I think, you know, for ASD Space Mobile, for example, today they
18:28
announced that the satellite, satellite or SATCO JV, the new
18:35
name and they released the, you know, Vodafone put out the press
18:39
release and they, you put up a website, which is great news.
18:41
And you've got the quarterly update which is coming on
18:43
Monday. And so I think there's a bunch
18:47
of positive stuff that's about to come.
18:48
But that said, the macro is too strong, right?
18:51
Like yesterday, I guess I'll talk specifically about the
18:55
space sector. Yesterday you had Rocket Lab
18:57
report earnings, which I think their earnings were OK.
19:00
And, and they also revealed like some new areas of business for
19:04
them, which typically would excite the market.
19:06
But of course, you know, everyone was focused on Neutron
19:09
getting delayed to, I believe the fourth quarter of this year
19:12
for launch. But but yeah, I mean, the
19:15
market, you know, Rocket Lab wasn't down that much, you know,
19:18
is maybe down 2% or so. But then, you know, you have
19:22
this selling on top of selling due to these market concerns.
19:25
And of course, you know, for high beta names, it's going to
19:28
be, it's going to exacerbate that, right.
19:31
And so in particular, why I've mentioned Rocket Lab is that it
19:34
is a, you know, a proxy for the space sector.
19:37
And, you know, I've talked about this before, but AST and Rocket
19:41
Lab kind of trade in tandem. And so if one is up, the other
19:44
one typically will go up. If one goes down, the other one
19:46
will typically kind of move down with it.
19:48
And so in this case, you know, Rocket Lab was off today based
19:52
on results. And so AST naturally is going to
19:55
fall, right? And so we'll see what the Monday
19:59
update brings for the fourth quarter, which, you know, some
20:02
people have asked, you know, what do I expect, I mean.
20:05
So AST already pre announced Q4 results.
20:07
So that shouldn't be a surprise. They already announced revenues,
20:11
operating expenses, CapEx and and that was on the back of
20:14
doing the most recent credible which for those that remember,
20:18
of course, you remember stock was at 96 and they with the
20:22
conversion payment they effectively raised at 1:16.
20:25
And I will say like the company has been good about timing their
20:28
raises. They've actually raised capital
20:31
at high levels right before things kind of, you know,
20:35
outside of just company specific stuff, but when the sector has
20:38
tended to to to have a drawdown. But but yeah, that quarter the
20:44
the update on Monday shouldn't be a surprise.
20:46
In terms of financials, things that I would be looking for of
20:49
course is an update on production launch cadence.
20:52
You know, will we get some information about the batches of
20:55
satellites that they're working on and will those get down to
20:58
the Cape? You know, when is that going to
20:59
happen? When are they going to launch on
21:01
Falcon 9:00? And then of course, I would
21:04
expect that for that update, we'll probably get a firm launch
21:08
date for Blue Origin, New Glen Bluebird 7, which someone at
21:13
least on Twitter had mentioned like marked March 6th as a
21:16
potential date, which I know is aggressive.
21:18
But then there there has been some, I guess, you know, data
21:22
points that have corroborated not March 6th, but perhaps March
21:25
8th or sometime thereafter. So that's why I'd gone out there
21:29
and said that, you know, I think that data point looks
21:32
aggressive, but it seems pretty close.
21:34
But you know, we'll find out on Monday.
21:37
But I think as I mentioned before, it's important to
21:39
understand that, you know, space this all the space sector is
21:44
down a lot today. And you know, ASD space mobile's
21:48
like no different. And yeah, I'm expecting to get a
21:52
good update on Monday. I will say though, that, you
21:56
know, for going back to expectations, was it Red Wire
22:01
reported yesterday? And I was actually surprised to
22:04
see that company, you know, rebound quite a bit, even though
22:08
the results were mixed, I'll say.
22:11
But you know, that's again that, you know, the the sector had
22:15
sold off into that print and then had rallied.
22:18
And so I think Red Wire kind of followed the sector as well.
22:21
But but yeah, it's, as I said before, I think it's important
22:26
to take a step back, look at all the names in the sector.
22:29
It's always good to have a watch list.
22:31
And so instead of beating yourself up over, you know, why
22:36
the stock is down, that gives you some perspective that it's
22:39
something bigger than just your name.
22:41
It's, it's actually, you know, macro factors.
22:46
And so I'm going to move on to T1 energy.
22:48
I, there's some people, I think who pointed out EE OSEOS as
22:55
potentially impacting the company.
22:56
And to be fair, like, or to be candid, I, I've never really
23:01
understood that, you know, the investment interest in that
23:04
name. And, and this is not to like
23:06
knock on anybody, but I just, it just wasn't something that kind
23:09
of fit my profile in terms of investing, But I did in the
23:13
interest in this is kind of an extra that I, that I do
23:16
normally. I did listen to the management
23:18
call yesterday because I was thinking, oh, it's down quite a
23:22
bit, you know, over 30%. Maybe there's, you know, some
23:25
timing issues, maybe there's some hiccups here, but they can
23:28
get through it. And so I listened to the call
23:31
and it seemed like the company and I, I don't know the full
23:35
context, but it seems like the company had given a reiterated
23:39
cue for guidance. I think it was like in the
23:40
middle of the fourth quarter. And then of course, when they
23:43
announced results yesterday, they missed very significantly,
23:47
right? And so the amount of trust that
23:49
people had with the company and you know, they, to their credit,
23:54
they, they, they took ownership of it and said they need to do
23:57
better and all these different things.
23:59
But I mean, the, the magnitude of this was huge, right?
24:02
So the company, I think the analysts were, the consensus
24:06
estimate was for $94 million. They came in at 58,000,000.
24:10
And the gross margins, this is where I don't quite understand
24:14
the company, but the analysts were predicting -24% gross
24:18
margins and the company came in at -94% and this is an
24:21
improvement from I guess it was like a few quarters ago where
24:25
they were down at -340% gross margins, which to me, like in
24:30
terms of the business model and for longevity, you know, I, I
24:34
think the Street had looked at potentially in the out years at
24:39
like 20 to 30% gross margins. And so maybe people were hanging
24:43
their hats on that. But then now, you know, the
24:45
Street, let's see where's the Street now?
24:49
Think long term gross, yeah, long term gross margins maybe in
24:53
2716 percent, 33% in 28. So still pretty good I guess.
24:58
But for margin to be that negative, I don't know that that
25:02
was a bit of a hedge hedge scratcher for me in terms of,
25:05
you know, can this, you know, when people talk about like
25:07
valuing companies based off of revenue multiples, yeah, you can
25:11
value companies on revenue multiples as long as like that
25:15
their gross margins are pretty high.
25:17
But when they're negative, I'd argue that that's, I mean,
25:21
obviously like somebody has to get to scale, but for at gross,
25:24
the gross margin level level per unit, like if it's going to be
25:27
negative, I don't think using revenue multiples is right
25:31
metric. But but yeah, when I listened to
25:33
the call, it seemed like a, you know, management, it was all
25:37
self-inflicted wounds. Like they, they had execution
25:41
issues and they pretty much fumbled the ball and so they had
25:45
to cut guidance and you know, it's, it's unclear like how much
25:50
of this or it seemed like it was solely execution.
25:54
I, I don't know about like customer demand or anything like
25:56
that. But for E OS, like it's a very
25:58
like what they're doing is, is brand new.
26:01
It's like something unique, right?
26:03
They're doing like stored some type of battery storage systems
26:06
at the, at the enterprise scale for data centers.
26:09
But then when people are conflating that with like, well,
26:13
you know, maybe that's the reason why T1 Energy is down.
26:17
You know, these are two very different things.
26:18
And the reason why, the reason why I say that is that, you
26:22
know, T1 energy already has a solar module plant that's up and
26:26
running, that's generating revenues and profits.
26:30
You know, they're they're building a new solar cell fab,
26:33
which you know, there's some risk there, of course, but then
26:36
you have both, both of those, the the module plant, which is
26:39
already up and running, and then the solar cell fab, they're
26:41
based off of tried and true designs from Trina Solar.
26:45
And so it's not as if they're like reinventing the wheel.
26:47
It's they're actually leveraging existing technology.
26:50
And so it's a very different level of execution risk and rich
26:54
Ward, right. And so they're very different.
26:56
That said, you know, there could be some cross ownership.
27:00
For example, I know a lot of retail investors who own T1
27:05
energy. Some of them might own EOSEOS,
27:08
which I've seen people like post about it.
27:10
And so to the extent like there's some cross ownership and
27:13
you know, people are de risking, then that can certainly impact
27:17
stock price, right. And that that's something that
27:19
you see in the space sector too, where people have cross holdings
27:24
and a number of names. And so that's why you have Co
27:26
movement or any and it's just like at a higher level, that ETF
27:30
owns a group of names and you've got people selling ETF and ETF
27:36
as a result, because people are selling it.
27:38
You've got, you know, you've got market makers who then redeem.
27:42
They'll, they'll, they'll actually shrink the, the number
27:46
of ETF shares that are trade out there because during the
27:48
arbitrage process they, they will, you know, buy the basket
27:52
of securities and they'll redeem the ETF and make a spread.
27:54
And, you know, I won't go into the mechanics of that, but but
27:57
yeah, you might have some Co movement because of, you know,
28:00
similar ownership between the two.
28:01
I, I looked at the institutional ownership and there's some
28:03
overlap, but not really that much.
28:06
But but yeah, I think people conflating like EOS results to
28:11
T1 energy. On the one hand, yeah, they're
28:13
both like earlier stage companies in the energy sector.
28:18
And so that's maybe the two things they might have in
28:20
common. But outside of that, they're
28:22
very different, right, And very different in terms of execution
28:27
risks and you know what, what level they are at because I
28:30
think E OS for example, let me just look here.
28:35
So this fourth quarter for US, they reported yeah, 58,000,000
28:38
revenue, negative EBITDA of 71,000,000 for this coming
28:42
quarter. That's let's see E1 Energy is
28:46
reporting they're projected to do about 369 million of revenue,
28:52
you know, gross margin of 21% and EBITDA of $40 million.
28:56
And you know, we've gone through a few people have posted about
28:59
this before, but I think the company you know, has, has
29:02
already kind of indicated that that they are the amount of
29:07
revenue that are going to generate in the fourth quarter
29:09
is more than the entire year and not.
29:11
And obviously, you know, people will be focused on on guidance
29:14
as well, which let's see for 2026, the Street at least has
29:20
1.1 billion of revenue and guidance or that's what they're
29:24
expecting and 105 million of EBITDA.
29:27
And that compares to 2025 which should end at 774 million in
29:32
revenue and 21/20/21 slash 22 million of EBITDA.
29:36
So yeah, very different company than E OS, which the image
29:41
before has very negative gross margins and is losing money hand
29:46
over fist, right. And they're they're trying to do
29:48
something that's hard and something new.
29:50
But with that, you know, comes execution risk and it seems like
29:54
listening to that management team, they've got it's they,
29:57
they need help, right? Like there's, they've got to
29:59
bring in real operators to get that company back on track.
30:03
But but yeah, so that's, I guess that's my, my, my view on it.
30:07
But if you look at the solar names, I mean, you know, whether
30:10
it's CSIQ, it's down 13%, Solar Edge down 15 and Phase down 10%.
30:16
You know, a number of these companies are down quite a bit.
30:20
I mentioned for solar earlier, you know, the stock was off, I
30:24
think it was down. Let's see, you know, they
30:27
reported results earlier this week and the stock was at let me
30:33
look here, no 2:45 And then when they reported results like, you
30:38
know, it dropped down to the two hundreds and now it's at 196.
30:42
There was some company specific issues there.
30:44
They, they had, they, they have a big plant in Malaysia and
30:49
Vietnam, which they basically have had to mothball due to
30:53
tariff issues, but they're also upgrading those plants as well.
30:55
And so guidance for the company came down pretty significantly.
30:59
And then they also have big exposure in India where they
31:02
manufacture modules and cells. And in normal days they would
31:06
export those to the US in addition to the ones from
31:09
Malaysia and Vietnam. But due to tariffs, they've had
31:12
to pull back on that. And so now the company's like
31:14
trying to sell those products into the Indian market, which,
31:18
you know, is a protected market like the US.
31:20
However, I think there's like some competitive issues there.
31:23
I quite candidly, I haven't followed first all or that
31:25
closely, but but yeah, those seem to be company specific
31:30
issues which cause them to cut guidance.
31:32
Whereas if you looked at their numbers, their US, their
31:38
expectations for US, demand is up pretty markedly or is up
31:42
pretty, pretty decent in in 2026.
31:45
And so, so, yeah, I think as I've pointed out before, when
31:50
First Solar reported the results and it came off, I was actually
31:53
quite surprised that that T1 energy hung in there pretty well
31:56
because I think people were able to digest that news and
31:58
understand that it was international exposure for for
32:02
solar. And you know, T1 energy did come
32:04
back a bit, but over the last two days, it's outperformed the
32:08
rest of the sector. And then of course today, you
32:11
know, it's hard to overcome all this macro stuff, right?
32:13
And so it's been selling off. And that's on top of, you know,
32:16
T1 Energy being a big winner for retail investors, hedge funds,
32:22
you know, since last year. And so, you know, when you're in
32:25
a position in a situation where you have to deleverage or you're
32:28
trying to protect profits, you typically will try to focus or
32:32
sometimes you try, you know, the the tendency is to focus on
32:35
winners. And so you're seeing some of
32:37
that, you know, unfold today. But but yeah, I think I think
32:44
the key thing for people is to make sure, as I mentioned
32:47
before, you know, don't be over leveraged, don't be on a
32:51
tremendous amount of margin. If you're like sweating every
32:54
tick of a stock price move, that probably means that you're too
32:58
big, right? Or you have too much exposure.
33:00
And so it's in days like this where you want to have dry
33:04
powder and be able to go in the offense and, and if not, like
33:08
it's OK to do nothing, right? As long as you understand what
33:12
you own and you have confidence in it.
33:13
And, you know, right now for me, like my perspective is there's
33:18
yeah, there's a lot of worry that's being priced in the
33:21
market, whether it's AI disruption, the credit markets.
33:24
I mean, I think out of everything, of course, you know,
33:27
Iran is, is big too. I think inflation is probably
33:30
cooling. I think Iran, it will resolve
33:32
itself. You know, we'll figure that out.
33:34
AII think is like it's probably a bit overdone in terms of, you
33:39
know, the, the pendulum of expectations have gone too far.
33:44
But in terms of credit, I think that's something to keep an eye
33:46
on, right? So I think if we have additional
33:49
blow UPS in credit and you start seeing some real stress in the
33:53
credit markets that spill over into the equity markets, that
33:58
can be, you know, a potential, a potential, you know, big, big
34:03
thing to overcome where you know, you've, you've got the Fed
34:07
who's, you know, solely focused on inflation and you know, of
34:10
course, you know, the job market as well.
34:12
But if there is a credit event. And so the last big one we had
34:16
was, if you guys would recall when Silicon Valley Bank and
34:19
Republic Bank, First Republic and a few of these others, you
34:23
went under, You know, that was a situation where, you know, the
34:26
Fed had to step in and arrange some marriages of these failed
34:30
banks and provide liquidity to the markets.
34:33
You know, you could have some type of event like that in the
34:35
coming weeks or months. And so that's something to keep
34:39
an eye on, right? Because in those types of
34:41
situations where there's market uncertainty and people don't
34:45
know how bad things are on the credit side.
34:48
And, you know, if there's one cockroach, maybe there's more,
34:51
more, you know, failures of, of companies that are widely owned
34:55
in, in terms of credit, then that can that can obviously
34:58
bring in a high level volatility and, and market uncertainty.
35:01
But again, This is why you don't go out on margin, you don't, you
35:06
don't have too much leverage. Because if that type of event
35:10
happens and you have a situation where you know, the Fed has to
35:13
step in, which is like, you know, there's a lot of
35:16
volatility in the, the regulators have to step in and
35:19
the Fed comes in, they lower rates, they like put liquidity
35:21
into market, then you want to be positioned for that, right?
35:24
You want to be able to ride into that.
35:26
And then there will be bargains because then the when you have
35:31
those type of events where like, you know, VIX goes up really
35:34
high. You know, I've talked about in
35:35
the past where typically when VIX goes to 50 or 60, like those
35:38
are huge buying events. Like in terms of deploying risk,
35:42
you want to have room to do that, right?
35:43
And that's you can't do that when you're over, when you have
35:48
too much margin or you're over leveraged and you're being
35:50
tapped out. So anyway, yeah, that those are
35:54
some of my thoughts. I don't know if people had
35:56
questions. I'm going to look at any
35:58
comments, but yeah, I think the most important thing is like,
36:02
take a deep breath. If you're concerned about your
36:05
particular company, it probably the moves, right, is it moves
36:09
today probably have nothing to do with your company.
36:11
It has more to do with the macro environment.
36:14
And yeah, just think about why you're invested.
36:20
You know, we always talk about like this idea of re
36:22
underwriting your thesis, you know, has anything changed?
36:26
And, you know, one thing that has changed is the fact that
36:28
markets have sold off and higher beta names are down.
36:31
And so from a relative valuation perspective, you know, if the
36:36
entire sector is sold off and your your company's followed it
36:39
too, then perhaps like the fundamental value is not going
36:43
to be as high as it was yesterday, right?
36:45
And so it's not as if these things are, you know, etched in
36:49
stone. Like you could have a company
36:50
that's executing and generating A tremendous amount of cash
36:53
flow. But if market sentiment is
36:55
really bad, like no one's going to care or, or they're not going
36:58
to character to a certain extent.
37:00
However, if the company could use execute like that will
37:03
ultimately get priced in. And of course that will depend
37:06
on, you know, do is the interest rate environment supportive?
37:10
Like if if interest rates are low, that means valuation
37:13
multiples are high or if interest rates are high, that
37:15
means valuation multiples are low.
37:17
And so all these things kind of play together.
37:19
And so just keep that in mind, like when you do have days like
37:23
this where, you know, not everything can be, not
37:27
everything is particularly up to a company or executives, right?
37:33
Like I've seen people say, people lament that, you know,
37:37
this company's executives, they should have they ahead of the
37:40
earnings results, like they should put out an update, right?
37:43
They should talk about this or that.
37:45
And it's like, no, that's what the quarterly update is for.
37:48
And unless it's like very material news that has to go out
37:52
right now, typically companies will wait and they'll announce
37:55
order. And so, yeah, just take a deep
37:58
breath. If you're you're having a hard
38:00
time kind of, you know, dealing with volatility again, perhaps
38:05
you might have too much risk on maybe.
38:08
And it's OK to de gross because you always want to be in the
38:11
right state of mind in markets, whether they're in good times or
38:14
bad times. And when I say right state of
38:16
mind, like in good times, sometimes people take, you know,
38:22
good performance as a, as a, as basically like a command to go
38:30
take more risk or like, Hey, things are going so well.
38:33
I'm going to leverage up more. And I, I will say, like there's
38:36
this one guy I saw on Twitter, I felt pretty bad and, and I was
38:40
sharing it with a few other people, but there was this one
38:42
guy who I think he's long path, which I don't really know that
38:47
well, but this guy, I think he made a lot of money on Tesla and
38:52
lemonade, I think. And you know, he had done that
38:54
on margin. And so I guess as of a last a
38:58
few months ago, he was like this guy, I mean, he really big
39:03
account. Like he I think he had like $19
39:05
million, but he was margin for another 20.
39:07
And he was long this one company.
39:10
And you know, I think it had worked out initially.
39:13
And then it's just been a complete write down and he's had
39:16
to meet margin calls, sell his position, meet margin calls,
39:19
sell his position. And I think he's down to like $1
39:21
million, which is absolutely brutal for someone who has a
39:25
portfolio of 90 million, right? And so, and that's, that's like
39:29
the double edged sword, right? Like you, when you use margin,
39:33
as I say, as I said before, like use it tactically, use it
39:36
sparingly. It's something that's temporary.
39:38
If you are lucky, then count your blessings and call it a day
39:43
and get out of margin, right? Because sooner or later, if
39:47
you're heavily in margin, it's going to come back to bite you
39:50
and you're going to get taken out to woodshed at the wrong
39:53
exact wrong time. And this goes for, you know,
39:56
people who are selling volatility as well.
39:58
You know, there's people today, I think who are selling puts,
40:02
Asher curve puts. Hey, it's free money.
40:05
It's not free money like I think there EO.
40:08
So there was like there were a few posts yesterday where people
40:10
had sold way out of the money puts thinking it was free money
40:13
heading into earnings. And then of course, the company
40:15
comes out with big surprise and it's down 3040%.
40:19
And you what I've told people in the past, which is?
40:24
You know, this whole notion of I, I'm going to sell a put at a
40:28
lower strike and I'll be happy to take delivery of that stock
40:31
because it then my, my average cost goes down.
40:34
That depends, right? Like it depends on why the stock
40:37
is down. Like if the stock is down for
40:38
bad reasons, you're not going to want to take delivery of that
40:41
stock at that price or perhaps any price.
40:44
And so I saw a few people who got tagged pretty hard on that.
40:49
And so especially for these, you know, earlier stage companies,
40:53
that's not something you want to do because things happen, right?
40:56
And, and if you truly believe in a company, you want to be able
40:59
to ride the volatility. And when you sell puts, that's
41:01
selling insurance. And yeah, it put it works until
41:04
it doesn't. And then what something
41:07
sometimes people don't recognize is that when you sell puts, you
41:11
might have enough cash for the initial exercise, but if they
41:14
continue to go down, you pick up a ton of deltas, then you're
41:19
going to have to put in more money.
41:20
And that's where margin calls come.
41:22
So yeah, just keep that in mind. Like it's not, there's no free
41:26
lunch. And that that goes, you know, if
41:28
you're long stock and you're shorting puts, you're basically
41:31
increasing risk exponentially because you're going to get long
41:34
even more stock if the stock craters and you're losing money
41:37
from your long position. And so, yeah, just be aware.
41:40
Like it's not. I know a lot of people on
41:43
Twitter say, hey, I'm selling puts.
41:45
It's a great strategy. It it is until it isn't.
41:47
And when when it's not, it can be really bad.
41:51
So yeah, anyway, let me see here.
41:57
There's, I don't think there's any comments, but anyway, but
42:01
yeah, that's, that's pretty much it.
42:03
I just wanted to catch up and, you know, give people something
42:07
to listen to and, and just take a pause.
42:09
Like I think as I said before, it's important to take a deep
42:13
breath and know what you own and volatility, you know, at the
42:18
macro level, when stuff like this happens, there's not much
42:21
you can do about it, right? Like they're not much you can do
42:25
in terms of the company that you hold.
42:27
There's not anything going on with it unless of course there
42:30
is news. But but yeah, that's not
42:33
indicative of, you know, if the thesis hasn't changed and the
42:35
company hasn't announced anything material, then nothing
42:38
has changed, right? The environment has changed and
42:41
that can impact your holdings. And, and there's a whole
42:43
confluence of factors, whether people are over leveraged or a
42:46
longer name and they're getting liquidated.
42:49
I can all play into it. But yeah, I think Cook had it
42:52
right where he's like, today sucks.
42:54
I'm going to go out surfing. And so sometimes that's that's a
42:57
good thing to do. And if you are, you know, in a
43:01
position where you know, maybe you've got yourself in a bad
43:04
position and you're down and maybe you are on margin, it's
43:09
also also OK to take some losses right to I remember when I was
43:14
working in the hedge fund industry and you know, there are
43:17
periods when things don't go right and things go the exact
43:20
opposite ways. Like if you're long things and
43:22
you're short things, they go the opposite way.
43:24
Sometimes you take losses, you de gross and you get your
43:30
mindset right and and you live on and fight another day, right.
43:34
And so I think, I think this idea of, of people holding on
43:39
for dear life, like if you're overextended, that's not good or
43:42
if you're overinvested like that's not good either.
43:45
Like you, you want to make sure that from a mental perspective
43:48
you're making the right decisions.
43:49
And so I think key thing is, you know, you want to be in the
43:53
game, don't be over leveraged. You know, the market, the
43:57
Russell is down 2.3%. I mean, the market S&P is only
44:01
down .8% and Nasdaq's down .7%, but yet these high beta names
44:07
are, they're down, you know, many multiples of that.
44:10
And that's just part of, that's just part of, you know, the
44:13
market, right? Where these names will in, in
44:16
good environments, they're outperformed significantly.
44:18
And then in bad environments, you know, today people are
44:20
buying healthcare names are buying like Dow, you know,
44:24
energy names, a lot of a lot of, you know, dividend, you know,
44:30
consumer staples, what you, what have you, anything that's
44:33
defensive. And so, yeah, but when, if
44:37
things kind of blow over and, and the maybe there's no like
44:43
conflict in Iran and then people kind of come to their senses on
44:46
AI, these things will blow over, right?
44:48
And you'll see continued outperformance from these higher
44:52
beta names and of course, lower beta names reverting back to
44:54
where they were. So anyway, now I'm rambling, so
44:57
I'm going to cut it there. But hopefully this was helpful
44:59
for people to hear. And yeah, I'll, I'll, maybe I'll
45:03
do another space this weekend once we, you know, once I guess
45:09
some of the more this news comes out and, and maybe the market
45:12
stabilize a bit. But but yeah, as a reminder,
45:14
we've got a number of earnings coming up.
45:17
AC Space Mobile is going to report after the market on
45:19
Monday. A few other names that I'm
45:21
involved in, Bridger Aerospace, Strata critical we're also
45:25
reporting next week. And then for the, and, and this
45:28
was, this is kind of the, The funny thing.
45:31
There was like a number of people on Twitter saying T1
45:34
Energy was reporting earnings. Was it yesterday and then the
45:37
day before. But yeah, officially the company
45:40
is not set an earnings date. They typically have announced
45:43
earnings later in March. So I think it's like last year
45:47
they they announced March 17th. And so I think Bloomberg has
45:52
them reporting for the around the same time.
45:54
And so, yeah, they'll set their earnings date and, and we'll
45:56
hear from the company, which I I think is going to be chock full
45:59
of a lot of interesting news, whether around monetization
46:03
OF45X tax credits, you know, their perspective on the the
46:09
build out of Austin, G2 Austin, which is their new solar fab,
46:13
solar cell fab. And then of course, any color on
46:16
off take agreements? There's a host of things for
46:19
them to cover. So anyway, that's it and we'll
46:22
catch up again soon. Everyone, take it easy.
46:25
Have a great weekend. If you're feeling stressed, go
46:28
out for a walk, Do something relaxing because the market's
46:31
still going to be here when you come back.
46:33
Take care. Thanks for listening to the AST
46:36
Space Mobile podcast. If you enjoyed this episode and
46:40
you'd like to help support the podcast, please share it with
46:43
others, post about it on social media, or leave a rating and
46:46
review. To catch all the latest news
46:49
about AST Space Mobile, make sure to subscribe.
46:52
Thanks again and I'll see you next time.
46:58
We're doing something very, very big and I think with this
47:00
technology we can really affect billion lives.
47:03
FT Space Mobile is the only company that has good technology
47:08
to deliver cellular mobile connectivity directly through
47:11
state to the everyday smartphone.
47:14
People will just basically turn the phone and be seamless.
47:17
But regardless of where you are, we don't want the news for even
47:20
to know that it's connected by satellite.