Latest / AST SpaceMobile Podcast / Kook's Weekly - January 4 - FM1 Health, The Spy Configuration & Battling the Bears

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Kook's Weekly - January 4 - FM1 Health, The Spy Configuration & Battling the Bears · AST SpaceMobile Podcast

0:06
This is the AST Space Mobile podcast, just basically.
0:11
From the phone and 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. Good evening everyone.
0:28
I don't know if people are just watching that game.
0:31
Holy crap, 2 missed kicks. Why I would never want to be a
0:35
kicker. It seems like all downside.
0:38
So tonight, you know, I don't like to think independently.
0:43
So I think we're just going to talk about Red Wire since we
0:45
should all just sell ASTS because it went up yesterday or
0:49
on Friday. And so the year is done.
0:51
Everyone made 15% on a risk adjusted basis when using the
0:56
Cap M. As Kevin Mack would say, we've
0:58
already achieved our alpha. So actually we'll talk about
1:04
certificates of deposit tonight and where to find the best deal
1:07
for your money to lock in the rest of of 2026.
1:10
So actually we're not going to do that.
1:15
We're going to talk about FCC letters that confirm that FM 1
1:19
is going well. So what I like to see is
1:23
confirmation that our satellite did not explode in orbit.
1:26
Among many things in terms of my fundamental process, the ability
1:34
to not become orbital debris is very important in my fundamental
1:37
analysis. And so it's nice to see that the
1:39
company is, quote, completed launch in early orbit phase
1:44
operations. So as you might imagine, a lot
1:47
of people did a lot of work to figure out what that means.
1:50
LEOP launch an early or orbit phase.
1:55
So it's a critical period of a satellite's mission after it
1:59
launches from the launch vehicle.
2:02
And it means that the satellite basically transformed from being
2:06
a brick to being an independent functioning spacecraft.
2:10
So it's talking back to Earth, it's generating power, it's
2:15
generally detumbling. These are all good things.
2:18
So this is different, sadly, for us from the commissioning phase.
2:23
So commissioning is where the satellite unfurls, and that is
2:28
something that is tested over and over again.
2:30
It's one of the key intellectual property modes of the company is
2:33
the unfurling process. That's where the big phased
2:36
array pops out. There's lots of pictures of this
2:41
in the DD document for anyone that's new to the company and
2:44
wants to check out what that look like.
2:46
Looks like it's super cool. We're tracking this pretty
2:49
carefully using orbital data and actually reminds me to go check
2:53
orbital data while I talk to you guys.
2:55
And last I checked, there just wasn't a lot of data, so you
2:59
really couldn't tell. But let me just check that real
3:01
quick. I have a program that does this
3:07
FM one. I got to run and load the Python
3:10
script. But anyway, we'll, we'll
3:12
probably know when this unfurls before the company announces it.
3:16
And trust me, I will tweet it out just to be that guy
3:21
separately while we wait for let me just run all while we wait
3:25
for FM 1. We got some updates with FM 2.
3:30
So FM 2 arrived safely in Cape Canaveral.
3:34
And so this is now in the payload processing facility of a
3:41
launch vehicle provider. Now we don't know who the launch
3:47
vehicle provider is, but we can guess.
3:52
And you know, it's, it's not the space shuttle, so it's going to
3:58
be one of the couple other providers that one might use.
4:03
And I think that Tanner put out a pretty good piece today that
4:05
pieces some of the the various I'm getting an error on my
4:10
script. Of course, God, I hate coding,
4:14
but I'll I'll do the bird watching after this.
4:17
Tanner did some good work that shows that there's some
4:20
variations between the prior satellites we launched with
4:23
SpaceX and this one in terms of which FCC approvals we got or
4:27
not. The implication is that it might
4:28
not be launching with SpaceX, which leaves really only one
4:32
rocket, which is New Glen. And I'm sure we'll all find out
4:35
about that shortly. And that would be very exciting.
4:39
And so this brings us to the SDA tests.
4:42
And so the SDA and Space Development Authority, I think
4:46
is our initial sort of sponsor of FM 1 and FM 2.
4:52
And they also are maturing up other launch vehicles 'cause
4:55
they're going to need a lot of redundancy.
4:57
I think as they found out earlier, you do not want to have
4:59
a SpaceX only launch capacity for the the country, especially
5:04
as something as vitally important as space as we find
5:08
out each day. One can only imagine the types
5:11
of technologies that were deployed in the Venezuelan raid.
5:14
One can only imagine the type of technologies that have been
5:17
deployed in Iran and will be deployed in Iran.
5:20
Maybe tonight. It seems like the Ayatollah is
5:23
soon to get a Russian passport. But what's interesting is Catsy
5:28
starts to figure out why these two satellites, FM 1 and FM 2
5:32
are in the formation that we are observing through the orbital
5:39
inclination. And so we have FM twos at a 53°
5:44
inclination flying at 520 kilometers.
5:46
Now we have FM 2 flying at 460 kilometers at 50°.
5:52
And so this staggers them a little bit.
5:55
And so the slight differences in height and angle create an
5:58
ongoing relative motion between the pair, which enables dynamic
6:02
baselines and viewing angles that are perfect for radar
6:05
signal geolocation and emitter analysis.
6:08
This is spy stuff. So confirms well, you're we're
6:13
you know, it's not a controversial point of this
6:15
juncture that there is non communication use cases for
6:18
these satellites. This used to be a controversial
6:21
issue. People would laugh of laugh of
6:24
us off of Twitter when we said these things two years ago.
6:27
But now the company's won the actual studies in the awards and
6:30
we know that they're working on ten programs of records for non
6:34
communication use cases. And so this is an example of the
6:37
testing of the capabilities in what is a try before you buy
6:44
situation for the government. So before they order a
6:46
constellation, they want to make sure everything's working and
6:49
see the capabilities. Other people that are seeing the
6:53
capabilities include AT&T. So Jack, Jeff Mcelrush, who's
6:58
the COO, so powerful guy at AT&T went over and signed the
7:06
Bluebird 7 FM 2 ahead of it being shipped.
7:09
And so again, it's really important to see the highest of
7:13
the higher ups of the M&O partners taking the time to go
7:17
visit the company in the facility.
7:18
This isn't an ancillary sort of low level project.
7:22
This is all the way up to the tops of the companies.
7:25
And that's also very important. We try to think about what is
7:28
the magnitude of this, what is the importance of this
7:31
technology, Is it a fungible technology or are they reliant
7:35
on a special provider of the technology.
7:38
And I like to see the CE OS of the world's largest telecom
7:41
companies in the clean room, which is what exactly what we
7:45
saw. And so AT&T is really gearing up
7:48
to go. They are saying that the
7:52
milestones are now really within sight and that they are going to
7:57
launch beta service interestingly and first half of
8:02
2026. So that tell in that could of
8:05
course be delayed. I mean who knows, but that's
8:08
what they're saying. And at this point you would
8:09
think that they have pretty good visibility.
8:11
So what would Jeff Mcelroach have seen when he went to
8:14
Midland? He would have seen two dozen
8:18
other satellites in varying degrees of completion more
8:21
likely than not seeing 6 that are basically done, which is
8:24
batch 1 and batch 2. And this is what would give them
8:28
the visibility that they can start beta testing.
8:33
And so I believe that what they saw would give them an extreme
8:36
degree of conviction in the timing of the constellation.
8:41
Timing is what had been the biggest risk that we lived
8:45
through in 2025. As we know FM One was delayed
8:50
for reasons we could spend an entire spaces on in terms of
8:54
conjecture on that delays, but that was nine months of slip.
8:59
And so the company previously is that ironed everything out was
9:01
subject to really high slippage periods.
9:04
My firm belief is that at this point especially with finishing
9:07
the larger control sat for the next generation satellite which
9:11
is based on FM One, FM 2 that all, all of those critical path
9:15
items are now wired by the company.
9:19
The next integration issue you'll have is the ASIC, but
9:23
that's going to be done within this quarter.
9:26
And so I do think that AT&T really sees the light at the end
9:29
of the tunnel. And then they also started to
9:34
give us some other hints. The first hint was SpaceX going
9:37
crazy with all sorts of announcements.
9:39
And so you almost don't need to follow, you know, the, the cash
9:43
tag, ASTS, All you really got to do is look for SpaceX news
9:47
releases. And whenever they start
9:48
releasing a bunch of news, then you know that ASTS is about to
9:53
have a big event. Until last week they went crazy
9:55
with news, which means that we're probably going to announce
9:57
something tomorrow. I'm starting to get suspicions
10:01
that there's some Golden Dome type thing.
10:04
And I have absolutely no idea if that's right or not.
10:07
But it would fit the timing. And I really don't know what to
10:11
expect. All I know is to expect the
10:13
unexpected when it comes to Golden Dome and how that would
10:16
work. But Firstnet is the other thing
10:20
to expect. And so Firstnet just actually
10:24
tweeted out exactly what's happening.
10:26
A strategic investment from Firstnet is upgrading the
10:29
Firstnet network, blah, blah, blah to include capabilities
10:34
beyond standard communication networks.
10:36
Once available, these solutions will complement and extend the
10:39
reach in remote and hard to access areas and they are very
10:45
specific to support future public safety focus satellite to
10:48
device features including push to talk.
10:54
So This Is Us, this is AST space mobile that they're talking
10:59
about. And so Firstnet is coming.
11:02
And we also had someone actually think that they saw an
11:05
advertisement for Firstnet push, Firstnet push to top
11:08
capabilities from satellite, which I've linked out in the
11:10
tweet. And then we also have something
11:12
that's kind of interesting from ASTS investors the the Twitter
11:15
account about 11,000 IoT devices that will be coming out through
11:23
Beware, which is a publicly traded company.
11:25
It's very small. It's really a channel partner
11:27
for Bell Canada. And this is being offered to 1st
11:35
net clients. And so AT&T will launch the
11:37
ASTSD to D offering to 1st net clients an existing Beware
11:42
distribution channel with over 11,000 devices already deployed.
11:48
So I don't know how we're supposed to read that.
11:52
Did they already deploy the 11,000 devices?
11:55
I don't know. But in any respect, there's a
11:57
lot of business that's going to come out of Firstnet that's
12:00
going to come to us. So with all this positive news,
12:04
what to do? So I know a lot of us were
12:07
shaken to our core to find out that space investor had sold all
12:11
of his Asts and Rocket Lab position because they went up a
12:14
lot on Friday. Say what you will, that's just
12:19
one person and and who knows, but it does give rise to the
12:23
natural question of are we all idiots for owning a stock like
12:27
this period? Are we all idiots for owning a
12:29
stock like this after it's gone up so much period?
12:32
Or are we just all idiots in general?
12:36
The answer to that last question probably, but the answer to the
12:41
first two questions, I really wish I knew because if I knew
12:43
for sure that the stock was going to go up to, to 300% this
12:47
year, well, I wouldn't have to hold spaces.
12:49
I would just tell you all that and we'd check back in in
12:51
December of 2026. But because we don't know that,
12:55
we have to do an incredible amount of due diligence, create
12:58
weekly digests and do weekly podcasts to hear yourself talk
13:02
out loud and make sure it all makes sense to yourself and to
13:05
others. And in the meantime, we attract
13:08
lots of bears. So I've been really trying hard
13:12
to get one of these bears to come to the Spaces.
13:16
It's hard. They tend to just shirk away.
13:18
And so Pivotal Capital never responded.
13:20
He just goes back to kind of taking potshots from afar.
13:24
Stonefox Capital wouldn't do it. He claims he's too famous
13:28
because of his enormous AUM and his prolific following on
13:33
Seeking Alpha. What a loser.
13:36
And you know, whatever. But then this guy, valuations
13:40
came out of the blue. So this is a holier than thou
13:42
individual for sure thinking we're all just a bunch of
13:45
idiots. But that said, he's entitled to
13:47
his opinion. And you know, granted, you know,
13:50
if you have a handle like the Kook report and tweet Calvin and
13:53
Hops cartoons, I could see at first pass how he's arriving at
13:56
his conclusion. And then obviously when he
13:59
interacts with Ampan man, his conviction that we're idiots is
14:02
all but certain. Because do I need to say more?
14:05
But he did actually, I guess he goes to bed early, but he did
14:09
actually respond with some points after reading the write
14:12
up. So I actually appreciate that
14:13
the guy took the time to do the write up and he has been
14:17
viscerally attacked on Twitter. So I can also appreciate how
14:19
he's like you guys are a bunch of jerks and you're only
14:23
solidifying my belief this is a rabid community that I want to
14:26
short fine. But he does actually give us
14:28
some points. So for the benefit of everyone
14:31
he says I'll write your write up and appreciate the thoroughness.
14:35
Great. But he has pushback fair as
14:37
anyone should. And so he says the wholesale
14:39
model is not great. M and OS own the spectrum and
14:42
the customers and thus have all the leverage and future
14:45
negations and the commit negotiations.
14:47
It's a free option for them and all the risking cap X is on
14:50
ASTS. OK, well, where to start?
14:54
So wholesale model is the only model.
14:59
So whether it's great or not, let's put that on the side.
15:01
It is the only model because if you went direct, ASTS would be
15:04
bankrupt because that means that they would have to go acquire
15:07
all the customers for people. And I don't know how that'd even
15:10
work. You'd presumably still have to
15:12
make it work with MN OS. So I'm not going to go drop AT&T
15:16
to become a space mobile customer anytime soon.
15:18
I can't imagine. And so without a partnership
15:22
with the MNO, this kind of dead on arrival because it just looks
15:26
like Iridium. And clearly you're not going to
15:29
go reinvent the Iridium model just with space based broadband
15:33
and then go advertise on NFL games of like, hey, you know,
15:37
become a you get Ryan Reynolds to start Hawking mobile plans
15:41
tough. So because the direct model in
15:44
my view just doesn't work. That leaves the wholesale model.
15:47
So then the question is whether it's great or not.
15:48
Well, time will tell. What's what is great about it is
15:52
the reach it allows us to access through channel partners. 3
15:56
billion customers cost lessly and then someone like valuations
16:02
will point out, well, it's not actually cost less Kook and he
16:04
would be right. And so the cost comes in the
16:07
revenue share that is our CAC customer acquisition costs.
16:11
CAC very, very important concept to anyone that's not coming from
16:15
a financial background. It is, it is the most important
16:18
concept of really anything I'll ever talk about because CAC is
16:21
really the, the unit economic driver that determines whether
16:26
your business is viable or not. And so because we have revenue
16:29
share, our CAC on our own balance, our own income
16:33
statement is 0 because the customers are acquired by our MN
16:37
OS. That's a vital thing.
16:39
So then it comes down to, well, the M and OS on the customer,
16:42
that's super important. They own the spectrum.
16:44
That is super important. And so, yeah, the M and OS
16:46
actually have a lot of value they're bringing to the table.
16:51
But what they don't have is the technology to deliver the
16:54
service and they don't have the prospects to ever make it work
17:01
economically. And why is that is because this
17:04
is a multi client economies of scale business.
17:07
AT&T in their own words, they've actually said this in their
17:10
analyst day. It makes no sense for them to do
17:13
this because they would only be able to use it in the US and
17:16
then you would have a constellation that's flying over
17:18
the rest of the world that's dead.
17:20
Not monetizing doesn't make sense to do.
17:23
It makes sense to have a third party of Switzerland do it so
17:26
that that company can also spread the fixed costs over
17:30
other customers across the world.
17:33
That's exactly what happens. So that in itself creates
17:36
leverage cause ASTS all else equal, should be able to create
17:40
a constellation, an effective constellation over a single
17:43
country or MNO area that is many many many times as a multiples
17:50
times cheaper than it would be to build your own constellation.
17:54
Until for example it from AT and TS perspective to build a
17:58
constellation for $3 billion. They're only monetizing their
18:03
100 and let's just call 100 million Subs ASTS can build it
18:09
same $3 billion, assuming AT&T have the capability to build and
18:12
on and operate a constellation, which they do not is not their
18:15
core competency. So it's it's really a
18:17
hypothetical here. But then ASTS can charge that
18:21
same price for an indifference point for AT&T for the 100
18:24
million Subs, but then they get the rest of the world for free.
18:27
So then what, what ends up happening?
18:28
ASTS is going to offer AT and TA deal split the difference.
18:32
So AT&T is way better off than doing it by themselves, even if
18:35
they could. And then ASTS is way better off
18:38
too because they get to also monetize the rest of the world.
18:42
So the wholesale model to me is actually the commercial
18:45
innovation here that makes is the only reason I own the stock
18:48
is because they identified the wholesale model.
18:52
So interestingly enough, his whole point, his first point of
18:55
the wholesale model not being great is actually the entire
18:58
reason I own the stock. So it's an interesting line in
19:03
the sand here where I I have a view that I think is really well
19:09
supported. He has a view which I'm not
19:11
going to take away from whether he thinks it's supported or not,
19:14
but that is his view and you should have your own view on it.
19:17
And then he goes, the if and less section underestimates
19:19
execution risk. They've got a very long way to
19:21
go before it's safe to assume this tech will work.
19:23
I also doubt the seven-year replacement estimates.
19:27
So on the seven-year replacement estimate, I think that that's
19:29
just a math. And so because they're launching
19:32
a higher orbital altitudes, I believe that's in the ODAR and
19:37
the Orbital debris assessment report.
19:40
And I don't think that's a controversial thing.
19:43
I generally, my brain just use five years anyway.
19:46
But let's not die on the depreciation hill.
19:48
This is not Michael Bury's AI short yet, although that would
19:53
be freaking lit if Michael Bury is short of the stock at some
19:57
point. I look forward to that day,
19:58
actually. So then he talks about the
20:02
execution risk. I agree with him.
20:04
I don't know if I underestimate it.
20:07
I feel like I've lost years of my life living the execution
20:11
risk. So I personally believe the bid
20:16
ask spread on this second bullet point is what I started off the
20:20
call with is AT&T has seen that now they've been able to shake
20:23
down the production line. And this is the Constellation
20:26
Constipation concept I've talked about really in my own kind of
20:29
Henry Clay way of, of using, you know, the oratory skills I was
20:33
gifted with by relating things to bowel movements.
20:35
But I do think that it is a mistake for someone to look at
20:40
how hard it has been for this company to launch satellites
20:43
over the past four years and extrapolate that forward.
20:46
Now that's on us. And so there is a lot of
20:49
execution risk. And if they if ASCs messes it
20:53
up, we're cooked on the stock. So from his perspective,
20:57
shorting this execution risk is actually a pretty rational thing
21:00
to do because most companies blow up on this and we've done a
21:04
lot of work to suggest that oh God, I'm going to say this this
21:07
time it's different. This is where I'm probably just
21:10
going to jump out the window for actually saying that, but it is
21:14
actually this time isn't different.
21:15
Actually, I don't want to say this time is different because
21:17
that's bad use you. This time is not different.
21:20
This company almost went bankrupt.
21:22
This company is years behind schedule.
21:24
They're burned way more capital than they thought.
21:28
Then we thought because execution risk is high, was high
21:32
and the realization of that risk actually occurred.
21:37
And so had it not occurred, our share count would have been 200
21:40
million shares. So I think we already lived
21:44
through it is my personal perspective.
21:47
We lived through it, we experienced it, we ate it and it
21:50
sucked. And so what's interesting is the
21:54
shorts who actually had that thesis were right.
21:56
The execution risk was high and the company did take it on the
21:59
chin. And yet the stock is damn near
22:02
at all time highs. So that's the thing that I'm
22:04
only surprised by is if I were short, I'd be really humble to
22:06
that of like I was right on all of these things, like the
22:10
company was delayed, they diluted more and and yet I'm
22:15
getting my ass handed to me on this stock.
22:18
What am I missing? That's what I'd be asking if I'm
22:20
a short. So the next thing he says is
22:22
golden Dome stuff is all opium shouldn't factor into a model as
22:26
of today. Pure speculation.
22:28
Fair, I think we might get it tomorrow.
22:30
But I've also thought that for many mananas I am the land of
22:36
manana when it comes to golden Dome and so I could be wrong.
22:38
Maybe we don't get anything from golden Dome.
22:40
Maybe it comes in a way that is unrecognizable to US.
22:44
Golden Dome was not even in our mindset a year ago and now it's
22:50
obviously something that is better than coin toss that we
22:53
get. So I would just say fine, take
22:55
it out of the equation. This investment does not depend
22:59
on Golden Dome period. So we'll concede that point.
23:03
Golden Dome is opium, even though I think we get it and
23:06
then underestimating the threat of SpaceX ASTS is paying SpaceX
23:10
for the privilege to exist. Well, I don't, I mean what?
23:14
And so, yeah, sure, SpaceX, SpaceX can't just raise prices.
23:17
So that's anti competitive behavior.
23:20
And they'll have an FTC problem real fast and it's proven out.
23:24
SpaceX does make launch capacity available to them.
23:27
And I, I don't know, they have unlimited capital because they
23:30
raise capital. And, you know, so I think we
23:35
actually might have more cash. And I don't know that anyone's
23:38
really underestimated the threat of SpaceX.
23:39
I think that's one of the things we've focused on the most.
23:42
It's fair. That is a big threat and, you
23:45
know, there's lots of ways that that threat will manifest
23:47
itself. And certainly it's the thing
23:50
that if you were to say, hey, what is the most obvious risk to
23:54
ASTS, It is probably other than the risk is itself, the risk is
24:01
SpaceX. So I think that he's, you know,
24:04
fair to say that I don't think we're paying SpaceX for the
24:06
privilege to exist. We have other launch providers.
24:13
SpaceX is a commodity launch provider, launches for everyone,
24:16
including Kuiper, which is Amazon and you know, Blue
24:19
Origin, so it's mortal enemy. So I don't know that we're
24:22
paying to exist, but SpaceX is a big competitive threat when
24:27
looking at it in simple terms, when you peel back the onion and
24:31
think about how the spectrum relationships work, how many M
24:34
and OS have already signed up MO US or DAS with Asts, the SpaceX
24:39
threat dissipates very quickly for those of us that have spent
24:41
a lot of time analyzing it. But his point not withstanding,
24:44
it's a it's a fair one to bring up.
24:46
Then he goes, I think the 10% penetration of $5 ARPU in
24:49
developed market should should be the bull case.
24:51
And that's assuming the thing works fair.
24:54
He, he just fundamentally doesn't believe there's demand
24:57
good bear case. If this ends up being a niche
25:00
product, if the attachment rate is very low, if there's really
25:05
crappy pricing, then the economics on the constellation
25:08
is, is not going to be good. And so is, would I own ASTS if I
25:14
thought this was going to be sort of like a 5% return on
25:17
asset business? No, I would not.
25:19
That would be, it would be terrible.
25:21
It would not trade that well and I would not own it.
25:26
So if he's right that there's going to be a low attach rate
25:29
and that the average revenue per user is low, then this will not
25:34
be a good business. I'm using $2.00 effectively of
25:41
ARPU. And so I think I'm pretty good
25:44
at my assumptions. But yeah, this has to be, this
25:46
has to be proven out. So I, I'm glad that he engaged.
25:51
He took the time to to read the write up, which is generous of
25:54
him. Yeah, well, it should be
25:55
obligatory of him to understand what the bulk case is if he's
25:57
short the stock. And and I want more bears to to
26:00
chime in if they have actually, you know, opinions that they
26:05
want to express in good faith. So I appreciate that he did
26:10
that. And I'm going to be nice to him
26:12
on Twitter for now to encourage that type of dialogue.
26:17
Next we have stone Fox. So Stone fox would would not
26:20
show up on the spaces. He declined his his cherished
26:25
invitation. I actually haven't invited a lot
26:27
of people like I don't invite and Pan man to speak, etcetera.
26:30
He just crashes it from time to time.
26:32
But I did really want to get Stone Fox on here because he
26:35
didn't. And now because we have AI,
26:37
which is a crazy thing, I just trained an AI on him.
26:42
And because Grok has access to everyone's tweets and to Seeking
26:47
Alpha. And so I just asked Grok to to
26:50
write a speech by Stone Fox in an unbiased way that is true to
26:55
his opinion. So didn't, didn't prompt it to
26:57
be a jerk. And then you can read it.
27:00
It's I was going to actually have an AI voice read it, but I
27:04
think that would have been too hard.
27:06
And so really his thing is that, you know, delays, delays,
27:10
delays. They hadn't launched any
27:14
satellites until FM 1. And he's worried about future
27:17
dilution. What else?
27:22
Competition and evaluation. He thinks it's a high price and
27:27
so and so does that other guy add valuations.
27:29
They think this is price for perfection.
27:30
And that's a fair comment too. You know, $40 billion market
27:34
cap. That ain't nothing that is not
27:38
being priced as a binary option at this point.
27:41
That is the market saying we believe we still have more we
27:46
want to see, but we believe. And so the risk, I don't want to
27:51
say risk return because that's taking a position on what what
27:53
this could be worth. And obviously the risk return in
27:57
theory of a stock that's at $80 versus $2.00 is different.
28:01
But that's an interesting thing. I just said, if I could say so
28:04
myself, because the risk at $2.00 was extreme because it was
28:09
going to go bankrupt. The financial risk of this
28:12
company at $80 is very, very low because they have $3 billion of
28:17
cash. I don't want to say 0, but you
28:19
know, it's effectively 0 now because they could just go raise
28:23
another billion dollars tomorrow if they wanted.
28:25
And so then we started to think about, well, what's the return
28:28
too? So the risk has gone down quite
28:31
a lot. But if you held return constant,
28:34
then you'd say this is a materially worse investment, all
28:36
else equal than, you know, just a couple weeks ago.
28:40
And, and certainly it is because the return profile hasn't
28:42
changed a lot in the past couple weeks.
28:44
But I in my humble belief, we have what could be a real
28:48
platform stock. And so a platform is a stock
28:51
where there's a very difficult way to understand what
28:55
something's actually worth. And that's a concept I've really
28:58
become humble to when I started my career.
29:00
It's usually like, we'll figure out what something's worth.
29:02
You know what, you know, NAV and like close the gap to NAV
29:07
because everything is fixed and static and it's really all just
29:10
rate of return driven. And then what I realized is
29:13
there's a lot of people that would own stocks and the upside
29:17
of that stock would just go up and up and up.
29:21
And because the company itself changed.
29:23
And I think that Tut one time said something interesting.
29:25
He went, you know, Jeff Bezos didn't look at a target price
29:30
when he was selling books. He wasn't looking at a target
29:32
price. We started selling electronics.
29:34
He wasn't looking at a target price when he invented AWS.
29:37
He just had his head down and he was cooking.
29:40
And so they just created more value by expanding the business.
29:44
And so to me, an interesting concept is to think about just
29:49
the platform and whether or not as a partner of a company, you
29:52
continue to expand your business opportunity over time, because
29:56
then that's where a stock really there's no price to sell.
29:59
Like Microsoft keeps expanding its business opportunity over
30:02
time, Google expands its business opportunity over time.
30:06
There's a lot of stocks that have basically just gone up
30:09
forever. And what was the target price?
30:14
Well, there was none. The right time to sell many
30:17
stocks was never. And I'm not saying that that's
30:21
true for Asts, but it really complicates the idea of what
30:24
it's worth because I didn't understand the ability to have
30:29
guard bands utilized for Asts effectively at National
30:32
Redundant Network. I didn't understand the non
30:35
communication use cases of this company.
30:38
I didn't understand Golden Dome. It didn't frankly exist.
30:41
There's a lot of business opportunities they either didn't
30:44
understand or did not exist at the time that have since
30:48
evolved, which expands the Tam. The entire government business
30:53
wasn't contemplated during the SPAC merger.
30:57
That's all found value. So that shifts everything up and
31:01
to the right and that's what makes kind of target price stuff
31:04
very difficult. I've kind of resigned to just
31:08
thinking about big numbers. And so it's like target sort of
31:12
like what are really successful things worth?
31:14
Well, really, really successful things are now worth, you know,
31:17
a couple of trillion dollars. Pretty successful things that
31:20
could still be stocks that people don't even know exist are
31:23
in the 5200 to $200 billion range.
31:26
That's kind of my intermediate stop on ASTS to re evaluate to
31:30
the upside. And those are still pretty big
31:32
numbers. We're talking 250 to $500 per
31:35
share. And if I didn't think that I
31:37
wouldn't, I wouldn't know in the stock.
31:40
And so it doesn't mean I'm right.
31:41
It just means I wouldn't own the stock.
31:44
So let's get back to fundamentals.
31:46
That's talking about the bears. I might have rambled on for a
31:48
little bit of time, but I'm going to keep inviting these
31:50
people on and, and maybe one of them will take me up on time to
31:54
kind of present to the group. And I know a lot of people
31:57
really want to hear that. So we have in Australia actually
32:01
where I just was is mandating D to C And it's, it's bringing an
32:06
interesting issue because in the regulatory dockets, the other M
32:12
and OS are highlighting that they cannot do it until Telstra,
32:16
which is one of the really big providers is reporting that they
32:20
actually can't meet the mandate unless they add new spectrum to
32:25
the standards. And it ends up being a pretty
32:29
interesting issue because when ASTS is up and running, all
32:33
these M and OS could then meet the mandate just by being
32:36
customers of ASTS. My belief is that's probably
32:39
what will happen. I think the M and OS are going
32:41
to go, well, we need to solve a regulatory fix fast.
32:44
This company can do it, let's just go with them.
32:47
And so that's why I believe it's going to happen.
32:49
And then I also just screenshotted as we kind of
32:51
explored with Grok what this means.
32:54
And So what they're asking for, what the other M and OS are
32:58
asking for, is NRNTN, which is a different type of 5G technology.
33:03
But the issue is that it's not adopted yet.
33:05
And so it requires all the global players to adopt it for
33:08
compatibility, cost money with R&D for chipsets.
33:11
You got to upgrade satellites, you got to integrate into the
33:14
network billions of dollars of investments.
33:17
But then it would help them handle voice over the SpaceX
33:20
system. Well, you could just do voice
33:22
over our systems. That's what I believe will
33:24
happen. But it is interesting where the
33:26
regulatory regime actually raced ahead to a capability that only
33:29
one company can apparently meet. And when I was in New Zealand, I
33:33
was just amazed like, well, I'm not amazed.
33:35
Turns out when you're in a country where 30% of it is set
33:38
aside for government land reserves, they don't have cell
33:43
phone towers. And so most of that country,
33:46
when I was there on the South Island, there was no cell phone
33:48
service. And it's a place you really want
33:50
cell phone service because if your car breaks down, you're,
33:53
you're kind of screwed. And Australia, same thing,
33:56
obviously, once you're out of the big cities.
33:59
So next we get to some patents that ASTS filed.
34:03
Again, I included a summary of CAT CS very long thread to try
34:08
to simplify it a little bit. But the crux of it is that ASTS
34:12
solves an issue of how to basically make the satellites
34:15
compensate for the complexity of having something flying around
34:21
at 17,000 miles an hour oscillating through extreme
34:25
heats. And so this is a way to
34:30
calibrate the satellites so that the radio frequencies are
34:36
actually accurate and you can explore.
34:38
This is some complex stuff and you can explore it for yourself.
34:41
In that tweet, which is titled the ASTS patent mode, Katzian is
34:46
at the conclusion. This is an extreme technology
34:49
mode. I have no reason to believe he's
34:51
wrong and let's hope he's right. So next we have the SDA.
34:56
We talked about the SDA earlier. This is the onboarding ramp for
35:01
Golden Dome, among other programs.
35:04
And this is where Tough 4R starts to chime in and talks
35:08
about some of the things we could expect from FM 1 and FM 2.
35:13
And so the milestones that you need to achieve are, you know,
35:19
having it actually work until being on orbit.
35:22
We have that checked now and then you have to demo it, show
35:26
the data, blah, blah, blah. And then they close out the
35:28
assessment. And then that's really meeting
35:32
the requirement for Halo, which then allows you to be kind of an
35:35
accepted technology. And we believe this is the
35:37
pathway to lots of interesting government business.
35:41
Other government business we can expect, I believe, is the space
35:45
AI stuff. And so New York Times put out an
35:49
article just showing that this is really topical.
35:52
I don't know that there's a whole lot in this article, but I
35:55
pasted thanks to some other space mobbers.
35:57
They took screenshots of the physical paper because I don't
36:00
subscribe to New York Times, but the title is AI in the Sky.
36:03
Space is seen as a data site. Well, this is obviously been a
36:07
very contested discussion topic on Acts, people working through
36:12
the math, this and that. I've kind of just simplified
36:15
this, that there is a market segment that's willing to pay a
36:18
pretty high price if you can do it.
36:21
And we believe that ASTS can do it and should be able to do it
36:24
most economically because it generates the most power.
36:28
And so I've had some difficulty making the math work.
36:31
So it's more economic than a terrestrial data center.
36:35
Some pretty smart people like Elon Musk thinks that it will be
36:40
and we'll find out. There's a lot of assumptions
36:44
that go into that and some of them look pretty convincing.
36:48
But in the meantime, you could only imagine the US government
36:51
and military applications are willing to pay a very different
36:53
price for on orbit compute. And that's something that ASTS
36:58
is likely to be very well positioned for, especially with
37:00
things like Golden Dome, things that are not in a good place is
37:09
global star. And so there in kind of an I
37:13
haven't really followed them and frankly that closely, but they
37:16
still haven't launched their new constellation, which is being
37:18
paid for by Apple. And it's kind of unclear.
37:22
We're reading through the lines here.
37:23
It's kind of unclear whether Apple is trying to wiggle,
37:27
wiggle out because now they see all these other things coming.
37:32
Do they really want to spend all this money for an inferior
37:34
solution that's kind of stock gap?
37:36
We'll find out. So the global star saga, I don't
37:40
think it's over yet. And you know, they have some
37:43
spectrum. We'll see what happens to them.
37:47
But the, the immediate fight for AST space mobile is really just
37:52
the back and forth with SpaceX that tries to flood it in the
37:57
FCC filings. I think all of this will be
37:59
unsuccessful. And so I think it will just be a
38:01
walk in the park at the end of the day to get the approvals
38:04
that are needed for the ASTS constellation.
38:06
But Katzie does a great job. It's linked out here.
38:08
Just pointing out, you know really what to make of these
38:12
things. But it's interesting too is some
38:15
of the inconsistencies of space XS positions.
38:20
SpaceX has also changed its position in not only the legal
38:24
arena, but the orbital arena. And so they are trying to change
38:29
their satellites or they are lowering their satellites from
38:32
550 kilometers to 480 kilometers to help with their link budget.
38:40
And so Elon is quick to say this is great.
38:44
It is greater than operating at higher orbits for them because
38:48
their satellites don't have good power and bad beamforming
38:51
capabilities. So it helps them actually have
38:54
more functional satellites. Where it hurts them is orbital
38:58
decay. So going back to the at
39:00
valuations bear case on the seven-year life, when you're
39:03
flying lower, your life is also lower.
39:05
And it's non linear because as orbital drag picks up, it's sort
39:09
of like yay, we're going, oh, we're crashing.
39:12
If you're at a high orbit, you will stay up there for much
39:17
longer. It's non linear because of the
39:20
way drag works. And gravity, as Sylvester
39:23
Stallone famously said, gravity is a bitch and it always wins.
39:27
And so they're having to fly lower and that has some some
39:33
problems. And so we've talked about this
39:36
quite a lot. I've said maybe a year ago that
39:39
this is going to be an issue that people really hone in on
39:42
probably in 2027. So once you're past the sort of
39:45
does it work phase, is it demand phase?
39:47
And then the market is arguably certain sort of comparing two
39:51
companies, there's going to be a big dispersion for one that has
39:55
much higher free cash flow conversion than the other.
39:57
And So what what comes to mind for me is looking at SAS
40:01
companies, which I don't really do anymore.
40:03
But back in the day, you have a lot of companies with ARR, but
40:06
some were just terribly inefficient.
40:08
And so the, the CAC to LTV was not good.
40:11
There's a tough sales cycle, something like that.
40:13
And those would trade, you know, whatever it 3 five times sales
40:16
even in the peak and. Good ones would trade it, you
40:21
know, 15 to 20 times sales because ARR is not created equal
40:26
and satellite ARPU is also not created equal.
40:28
If your satellites have to be replaced every three to five
40:31
years and you need twice as many satellites, you are not capital
40:35
efficient compared to the other guy who has to replace only 15%
40:39
of their fleet per year and can operate with, you know a
40:43
fraction of your satellites. So that's something that I think
40:46
is a harder thing to for people to appreciate right now.
40:53
It's very abstract. But once we're starting to deal
40:55
with operating cash flow in these dynamics, that's what I
40:58
think people will hone in on because the business quality
41:01
will matter and that low orbital position of SpaceX is going to
41:08
cost it. And that I do believe will
41:11
matter. But in the meantime, we're still
41:14
in the traction phase. And so SpaceX traction, never
41:17
mind the orbital issue is crushing, whereas Tim Farrar
41:22
would say is missing numbers, but the numbers are really,
41:25
really high. And so Miss Schmidt, they have a
41:31
lot of customers. And so I've pasted the progress
41:34
report here and you know, by all accounts, SpaceX is doing pretty
41:38
OK. 9 million customers, tons of airline customers, tons of
41:44
cruise passengers. I mean, look at these numbers.
41:46
So they have 21 million airline passengers served, they have 20
41:51
million cruise passengers served.
41:53
So that airline number I think is going to skyrocket.
41:55
We just think about that for a second.
41:57
Just the reach on cruise which you would never think is a big
42:00
market seems amazing. And I don't know what the right
42:04
ARPU is to put on, you know really the accounting principle
42:08
of customers reached. So I don't know if that means
42:11
that customers that actually signed on with the service, if
42:14
you actually had to have people pay for the service, you know,
42:16
what would that attach rate be way lower?
42:19
Who knows? But you're, you're actually
42:20
starting to hit some massive numbers in what otherwise I
42:24
think would be commonly believed to be niche markets.
42:27
And so it's just showing to me, it just shows that there's a
42:30
huge market here. And if you were able to reach
42:33
people in the lowest friction way, I think that the the
42:37
numbers are going to be really big.
42:38
And I hope they are because at, you know, the expectation of
42:43
having a, you know, triple digit stock that doesn't start with
42:47
A1. You need those numbers to be
42:49
high. So lastly, second, lastly, the
42:54
penultimate tweet is a Bluegrass Capital overview.
42:57
So for your reading pleasure, here's sort of a report that
43:02
that they wrote about the stock and their investment.
43:05
You can just see if that matches up with yours.
43:07
And then the last thing was there was a failed satellite
43:10
launch. Spain sat Ng they had an an
43:13
anomaly. It was hit by a space particle
43:15
that is pretty unfortunate, but it was insured.
43:19
And so they got $400 million back or will get for the loss of
43:23
their satellite. The only reason I point that out
43:25
here is it one would think just the law of probabilities
43:28
suggests that at some point Asts will have an an anomaly with a
43:32
satellite. Depending on when that happens,
43:35
it will either be a dramatic thing that will have to have,
43:39
you know, 15 spaces hosted by NPAM man to address or if it's
43:43
later in the constellation deployment, literally no one
43:45
will care. But you know, the way to solve
43:47
that is simple. Just have a lot of satellites
43:49
because then it's just really not that big of a deal.
43:52
But as Scott has said, they do ensure the 1st 15 minutes of a
43:57
satellite's life, which is really from ground to orbit on
44:00
launch. And so if then you get, you
44:03
know, a bad launch or you get, you know, some anomaly in the,
44:07
the initial separation, then you'll at least get your 20 plus
44:11
$1,000,000 back, which is better than nothing.
44:15
So that's what we have for this week.
44:18
I hope everyone had a, a good New Year's week.
44:22
It's all blur to me. I'm still so jealous.
44:24
And I think that Scott will probably come out this week
44:29
swinging. Maybe he'll wait till next week
44:31
just so all the New Year's stuff can settle.
44:34
But I am personally expecting him to come out in the next two
44:39
weeks. I'll give myself some room
44:41
saying that they have reached satellite production capacity of
44:44
6 per month. And that makes sense.
44:47
Now that I'm talking out loud, that makes sense to actually
44:49
announce that when they actually ship batch one, 'cause that's
44:52
the proof in the pudding. People are gonna be like, yeah,
44:54
yeah, yeah. You're manufacturing 6 per
44:55
month, yet you've shipped 2 satellites in the past 15
45:00
months. Yeah, give me a break.
45:02
But actually if Batch 1 comes out the gate, that's when I
45:05
would say, and now we're actually producing at six per
45:07
month. Thank you very much.
45:10
And that will be I think a very Seminole moment for the company.
45:14
What it does for the stock price, I don't know.
45:15
I mean, the stock price went 15% on Friday.
45:17
So maybe that was discounting that, who knows.
45:20
But that is really important. We're going to get a launch date
45:22
for FM 2 pretty soon. And I, I hope I can make it.
45:26
That'll be really exciting. We're going to get the
45:28
deployment of FM one probably within the next month, cutting
45:34
it and Firstnet is making it pretty obvious that we're going
45:39
to get a Firstnet deal. They really kind of said that
45:42
explicitly. So there's a lot of interesting
45:44
things to think about. You know, in the meantime, you
45:46
know, who knows how the macro is going to evolve, you know, with
45:51
regime change and things like that, which which is actually
45:54
pretty exciting when you, I guess, depending on your
45:57
perspective of it. But but I wish everyone a great
46:00
week and keep all the research come in.
46:03
I'll make sure to collect it. And if you ever see something,
46:06
people already do this. But I think I would just be
46:07
explicit. If you see something really cool
46:09
about Asds just at me so that it shows up in my comments and
46:14
there's a higher probability of me finding it so that I can
46:16
include it in the weekly. And I appreciate that so
46:18
everyone can have the benefit of it.
46:20
Take care everyone, bye. Thanks for listening to the AST
46:24
Space Mobile podcast. If you enjoyed this episode and
46:28
you'd like to help support the podcast, please share it with
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others, post about it on social media, or leave a rating and
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review. To catch all the latest news
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about AST Space Mobile, make sure to subscribe.
46:40
Thanks again and I'll see you next time.
46:46
We're doing something very, very big and I think with this
46:48
technology we can really affect billion lives.
46:51
AFT Space Global is the only company that has full technology
46:56
to deliver cellular broadband connectivity directly through
46:59
space. To do everyday smartphone,
47:02
people will just basically turn their phone and be seamless,
47:05
regardless of where you are. We don't want the user even to
47:08
know that it's connected by satellite.
47:11
Our role is to bring this into reality, always in partnership
47:15
with the animal. Listen, Waffles.