Latest / AST SpaceMobile Podcast / Kook’s Weekly - October 20

Transcript

Kook’s Weekly - October 20 · AST SpaceMobile Podcast

0:06
This is the AST Space Mobile podcast.
0:10
Where we just basically turn your phone be seamless
0:14
regardless of where you are. We don't want the user even to
0:16
know that it's connected by satellite.
0:21
Listen, the opportunity that we have is very, very, very large.
0:28
OK. Good evening everyone.
0:29
Thanks for joining, I hope. If anyone's a Toronto fan,
0:33
congratulations. If anyone's a Mariners fan,
0:37
brutal. And so I'm in a split household
0:41
and so I guess tomorrow's going to be the night we all figure it
0:44
out. People can tell by my voice I'm
0:48
not feeling very well. Turns out going camping 2
0:51
weekends in a row with a bunch of dads is just like a recipe
0:56
for testing 1's immune system in mind.
0:59
We didn't pass the test, but anyway, ASTS must go on.
1:05
I don't think a bell takes a takes a sick day, so I won't
1:09
either. So this week we had quite a lot
1:11
of excitement, maybe a little bit too much excitement for my
1:15
for my blood. But we had FM 1 arrive in India.
1:17
And so it's it's happening. We have, you know, it shows the
1:22
global reach of the space mob. We had people basically at every
1:26
airport or at least being able to pull footage from every
1:29
airport of the Antonovs flight around the world.
1:33
I know I speak for many of us when saying that I did in fact
1:37
go and order a 1 to 200 scale Antonov model, which should be
1:41
arriving any day. That will complement my 2 block
1:47
1 satellite models I have. So I don't have just one, I have
1:51
two. I probably need to just get some
1:52
more in Ultimately, you know, I need to find like a really good
1:56
vendor of these things because I worry that AST Space Mobile will
1:58
quit producing them and I might just buy a Bluebird model for
2:03
every bird they put in the air. So this could end up being
2:05
pretty expensive, obviously. Like we're talking like 10 to
2:07
$20,000 of Bluebird models. So I'm sure my wife, you know,
2:11
on Bluebird 243 will go seriously and I'll be like,
2:16
yeah, it'll be serious. What are you talking about?
2:19
This house was built by this company.
2:21
We're going to have 243 Bluebirds in this house.
2:25
God damn it. So anyway, India.
2:31
So the satellite is in India, Bombay the hard way.
2:35
Garc guns, cars and sitars. I haven't listened to this album
2:39
in a really long time, but hard to forget that title.
2:44
But what's exciting about this is there started to be some
2:46
rumors that this ISRO flight was going to be in November.
2:52
Now, I personally think we're going to be having Falcon 9
2:55
launches first, but I could be wrong on that.
2:58
And so it's kind of interesting to keep the market guessing
3:01
because when you think about what's happening this week and
3:04
next, we might have FM 2 skip as well.
3:09
And so as we know that that will be by a truck and we'll get the
3:13
photograph, you know, hopefully after it's actually arrived in
3:18
Florida. The reason I say hopefully is
3:20
just for operational security. Like clearly I'd rather have
3:24
minimization of risk versus, you know, some pressure releases if
3:29
if the timing is just a day or two.
3:31
But it is really exciting to have this real ramp up of
3:36
operational velocity occurring. And I think a lot of us were
3:42
conditioned to thinking that the ISRO launch was going to be in
3:44
January. And so that means we'd be
3:46
having, you know, maybe a handful of Falcon 9 launches
3:51
this year, which in a way would probably be what the market
3:55
would want to see the most because that's just going to be
3:57
the lowest drama launch. But maybe India say, hey, we
4:00
want the attention and we're going to go first.
4:03
But in any respect, this achievement of milestones and
4:07
there are many is what is going to drive in our opinion.
4:11
When I say our certainly MPM and, and myself and Katzie and
4:16
Tanner and Kevin and you know these guys that we talked to all
4:19
day, the the flipping of operational milestones should
4:24
ultimately be the unlock for share price progression.
4:28
And so Ampam Yan has made this cool chart that he's posted
4:32
really over the years that just shows the milestone Starlink hit
4:36
and what the implied valuations are for SpaceX.
4:39
And so clearly you can have a little bit of a debate because
4:44
SpaceX is private. And there's certainly some
4:49
implied values within SpaceX because SpaceX is, of course, a
4:53
launch company and a telecommunications company.
4:57
Now, a lot of people were giving NPM man a bunch of crap, saying,
5:00
Hey, this is, you know, you pump or you're being responsible.
5:03
This isn't right. But I just say, look, I, I think
5:07
I don't have the numbers at the top of my head, but the launch
5:10
business isn't particularly exciting.
5:12
You, you know that they're doing whatever it is, 120 launches a
5:16
year. Do this math real quick and
5:19
roughly 70 million bucks per launch at sticker price.
5:25
And we know that most of those launches are actually for
5:29
Starlink. But just in theory, if you just
5:31
kind of go with my logic, that's $8.4 billion of revenue for
5:36
launch. If you were just to price that
5:37
at retail that that doesn't underpin 1/2 a trillion dollar
5:41
valuation. And so when you look at
5:44
Starlink, Starlink has 5 million Subs and people are paying.
5:48
I'm just making up numbers real quick right here.
5:50
People are paying at least $1000 a year of ARPU.
5:57
That's $5 billion of revenue. But that's super high multiple
6:00
revenue because that's cable company revenue and it's growing
6:02
like a weed. And so the, and that doesn't
6:05
include all the government revenues this for Star Shield
6:11
and things like that. And so I forget off the top of
6:14
my head, but we, we know that Starlink is probably doing $10
6:17
billion plus of revenue and it's really the only exciting telecom
6:23
growth asset out there. When you think about what people
6:25
are otherwise dealing with, they're dealing with Liberty
6:27
Global Charter, things like that, which are struggling from
6:30
price compression and competition.
6:32
I haven't checked in on charter in a while.
6:35
That had been pretty big position.
6:38
We used to follow maybe like 10 years ago when Rutledge was was
6:45
really plowed ahead on their aggressive strategy.
6:48
But as you can see, it's pulling up a shirt.
6:49
Sugar's kind of dragging ass obviously for quite a lot.
6:55
And so it peaked at COVID at 800 and now it's 200 that no bro,
6:59
there's a lot of competition. Starlet comes on the scene.
7:04
I'm not here to pump strong by any means, but when you think
7:08
about it from a team, it's really the most exciting game in
7:11
town. And so This is why you would be
7:15
really excited to own SpaceX and then you get all this dreamy
7:18
Starship and you know, whatever the hell else he's going to do.
7:22
But I think in Pin Man's analysis really holds water when
7:25
you look at the stepwise progression of space XS
7:29
valuation. And so we're at the point where
7:33
we're just starting to have our big scaled birds in the air and
7:36
we have approvals. If you look at the corollary of
7:39
what happened with SpaceX, that's right before things just
7:42
went totally moon shot. And so that's when SpaceX was
7:46
worth, you know, forty, $50 billion, you know, before and
7:49
then just zipping up to 1/4 of a trillion and now onward to half
7:54
a trillion. And so I think this analogy is
7:57
going to hold because right now the market's really grappling
7:59
with, OK, can we execute in what we saw the other day or Frank,
8:03
couple days. The move from 40 to, you know,
8:07
now 80, whatever it is, $87.00 in the aftermarket is, is really
8:12
reflective of people going, Oh yeah, well, they're actually
8:14
going to be able to make these salads.
8:16
There's no show stopper on the new form factor.
8:20
The next thing the market is going to want to see is turning
8:25
on the revenue. That's where we could really
8:31
expect the valuation to go vertical.
8:34
Now it's not going to happen overnight presumably because we
8:37
have to have a bunch of satellites in the air.
8:39
But you could you can see why this path is likely to hold and
8:44
why are they why the stepwise Jeff Rice as we unlock various
8:50
uncertainties. And so, you know, zoom out.
8:53
Big uncertainty for this company was can they finance itself?
8:55
You know, another big uncertainty.
8:57
Did the prototype work? Yes, it did.
8:59
Another big uncertainty was will the regulators permit it?
9:02
Yes, they will. Another big uncertainty.
9:04
Will the MN OS choose them? There was a real debate in the
9:08
market as to whether Verizon was going to bail on AST space
9:12
Mobile thought that was asinine, but you can see that that was it
9:17
was not priced in the market. Stock price shot up a lot when
9:19
Verizon came through the other day.
9:22
And so, you know, I think we're going to get a flurry of these
9:24
DA contracts, which will be exciting.
9:27
But I think at some point it's just going to start to be this
9:29
tension on the stock. Not to say that it can't keep
9:31
going up just on those, but there could be a point where the
9:34
market goes. Yeah, yeah, yeah, yeah.
9:36
We, we understand you're going to get all these DAS and we're
9:39
going to hold this sort of pressure behind the dam wall and
9:44
wait to see you get 20 satellites up in the air and
9:47
start to convert that to revenue.
9:48
And then we're going to blast through the, you know, the value
9:51
of all those DAS. Well, whether that pressure
9:54
starts to build, you know, $85 per share.
9:57
Whether that pressure starts to build at $150.00 per share, I
10:01
don't know. But it is exciting because now
10:05
the release of all this pressure is really kind of inside a one
10:08
year window, which doesn't really leave shorts much room to
10:12
maneuver. You know, they really have to
10:15
start having their short thesis rely on like, well, shit happens
10:19
and and really hope for some sort of exogenous of that.
10:23
But you know, and, and I can't predict that, obviously.
10:26
And we've had a lot of exogenous events during our journey over
10:28
the past five years. But I do believe this SpaceX
10:33
road map is going to govern the share price progression.
10:38
And as you know, I won't repeat myself for the fifth time again,
10:41
But as the MPM points out, we really are seemingly at the
10:45
point of Max inflection. And Max inflection is where the
10:49
revenue dam breaks. So let's check in with our dear
10:53
friend Kevin Chen, who made the point about the dam breaking.
10:58
And so people, I don't know what people do all day in terms of
11:02
these Fudsters, but people are then like, Oh yeah, OK, fine, it
11:06
works. But will they become profitable?
11:08
And here I'm quoting this guy. Lab under score stocks quote,
11:11
let's say they do make money and somehow turn $1 billion a year
11:15
per and that would be incredible.
11:17
Wouldn't the company still be overvalued right now making a
11:20
billion dollars a year? And Kevin makes the point that
11:25
this is really a damn waiting to break.
11:29
And so all of these M&O deals are piling up.
11:32
The value of them aren't very obvious to the market, the
11:35
general market. They're very obvious to space
11:37
mob because we've, you know, spent every waking minute
11:40
analyzing this. But this dam has been under
11:43
construction for seven years. And so while the cash flow
11:46
hasn't run through the PNL, it's wired to do so.
11:50
And so these DAS are wiring cash flow.
11:54
They're wiring go to market. And I just want to re emphasize
11:56
this point because it's, it's certainly the reason why I
11:59
started to look at this company in the 1st place and the reason
12:02
why I thought I had to take a huge bet.
12:05
And it really is around go to market.
12:07
And so go to market is a concept that I certainly hadn't focused
12:10
all on and lot on like, let's say 15 years ago.
12:12
And it's hard for me to say whether other public market
12:16
investors were focused on it or not, But it's really a concept
12:20
that was just drilled through my head in the private markets.
12:26
Isn't the private market you're dealing with companies that are
12:27
so incipient. They don't have brands yet.
12:29
They don't have other, you know, real moats.
12:32
And so the go to market swing is usually, you know, hey, we're
12:34
going to spend money on Facebook or hey, we're going to, we're
12:37
going to hire all these sales reps and hey, we're going to
12:39
have a channel partnership, things like that.
12:41
It's crucial because most companies die in, in my view,
12:45
because of go to market inefficiencies, which is really
12:48
just a way to say the market could be very competitive.
12:51
And so getting to market and getting customers can end up
12:54
being economically challenged and, and drain you of your
12:58
capital. And so ASD Space Mobile, where
13:00
it differs from the the legacy satellite companies is it's not
13:05
trying to acquire its own customers.
13:07
It's not in the business of selling its own handset.
13:10
That's where the Iridiums of the world died.
13:12
The go to market was really hard.
13:14
Think about the friction of getting someone to go purchase a
13:17
separate phone for, you know, $1000 or something, sign up with
13:20
another plan. That's what we call high
13:23
friction sale. That would have CAC against it.
13:26
You'd be having to advertise, you know, on Super Bowl
13:29
commercials and things like that.
13:30
That's a lot of money. And so ASTS with it's super
13:34
wholesale model has seemingly solved the CAC problem, the
13:39
customer acquisition cost problem because the partnerships
13:43
they have with the M and OS. And then when you kind of extend
13:47
the analysis of that, they are also not a cost to the M&O.
13:51
And this is something that I think the bears overlook a lot.
13:53
They think, well, there's going to be all this competition or M
13:56
and OS are going to try to beat up AST, you know, whatever from
13:59
the AT&T and Verizon's point of view, this is just money they
14:03
didn't have before. And so you could see, see,
14:06
realistically, sure, a profit share can be considered a cost,
14:10
but it's also incremental revenue.
14:12
And so the business leaders at the M and OS who were
14:15
championing in this, you know, Fast forward a year or two,
14:18
they're going to be going to their evaluations and saying,
14:21
look how this incremental revenue I created, there's not
14:24
incremental costs they incurred. There's no investment.
14:28
And I kind of put the little asterisk, of course there's some
14:30
investment because, but we know AT&T has 100 engineers working
14:34
on this, but let's just presume that that's just allocating
14:37
costs. I don't want to die on the hill
14:38
of, of that nuance. What I, what I think John
14:41
Stanky's going to see is, oh, hey, we, you know, generate an
14:44
extra billion dollars of revenue out of nowhere.
14:48
That's really exciting. And, and from ASTSS perspective,
14:52
there's no other way to get to 300 million customers as
14:56
efficiently than through this super wholesale model.
15:00
And so as you've wired these deals, you've filled the dam up
15:04
with water. Once the satellites are live and
15:08
there's a service that's sufficiently good to, you know,
15:12
to effectively roll out in front of consumers, that's when you
15:15
start having water run through the turbines and you start
15:18
generating a huge amount of cash flow.
15:21
We're getting more and more details about what this is going
15:23
to look like until we had the Bell Cannabis CEO out.
15:28
In an article quote, Kirby also confirmed pricing for the first
15:32
time, explaining that Bell's plans to include satellite
15:34
coverage and its top 2 wireless plans and other customers will
15:40
be able to add it for roughly 10 to $15.00 a month as a pay per
15:43
use option. And then he described it as very
15:46
affordable compared to international roaming rates,
15:48
etcetera, etcetera. So he wouldn't be talking about
15:52
pricing if there weren't ADA. So the first obvious thing to
15:56
conclude is that we're going to be getting a Bell Canada DA
16:03
really any day now. The other point of confusion
16:06
people have is they go, oh, well, if it's included in the
16:08
top plan, does that mean ASTS isn't making any money?
16:10
Well, no into in in. Let's say say for example, they
16:14
have this $85 per month plan, which gives you 175 gigabytes of
16:19
data. Implied in that will be some
16:23
value for ASD space Mobile. That's going to be in a contract
16:25
that's going to be stipulated. I don't have that number, I
16:28
don't have ADA. But that's the type of thing
16:31
that Scott would be laser focused on.
16:33
So that when it's bundled, there's an implied price, just
16:36
like, for example, when you pay for cable behind behind that
16:41
contract there, there is a fierce negotiation with ESPN
16:45
going on with the cable companies about what they get
16:49
paid for a carriage rate. And that's a lot different than
16:52
what, you know, home garden TV or whatever gets paid per cell.
16:58
And that's been the crux of the cable battles is, you know,
17:01
basically a lot of people are subsidizing ESPN.
17:03
But the whole point is like ESPN gets paid a lot of money to to
17:08
be included in in the bundle. And cable obviously are very
17:11
complicated as people suck to break the bundle, but it's not
17:15
just because it was bundled didn't mean ESPNESPN wasn't
17:18
getting paid. They were and they're getting
17:19
paid a lot. And so ASTS is going to often be
17:23
bundled in these premium plans because, you know, for example,
17:25
I have a premium plan, of course, you know, single most
17:30
important thing in my life is having my phone work.
17:33
And even this weekend, you know, up in the mountains, coverage is
17:36
pretty spotty. You you would pay, you know,
17:40
it's just as simple as that. And for premium customers, all
17:44
of a sudden, first of all, it will reduce churn.
17:46
I'll feel like I'm being more value for my money.
17:48
But then if they increase the price 10 bucks on me, you know,
17:51
because they including satellite coverage, I'll be really happy.
17:54
But we're starting to see these numbers come through.
17:57
And so if we start to assume this is going to be 10 to 15
18:02
bucks a month, what I really relate that back to every time
18:05
is really data. It's not going to be unlimited
18:09
for a couple of reasons. One, people are not going to be
18:12
in these dead zones, you know, most of the time.
18:17
And so the actual usage could end up being quite low, even
18:20
though the value to the consumer is extremely high.
18:22
And that's another point that I think the bears miss is, you
18:25
know, how often am I in the Alpine region of the mountains?
18:31
1% of the year, You know, I'm just thinking I was did it 2
18:36
weekends in a row, four days. So 1% of the year I was in this
18:40
spot and how often would I have used it?
18:44
Not very often because I was busy, but when I wanted to have
18:47
data, I really wanted to have data.
18:50
And so something that people should realize is this 15 bucks
18:53
a month ARPU is divorced in a way from the actual data and
18:59
capacity of the satellites. And so in my models, I'm pricing
19:03
stuff off gigabytes and and I'm using 2 bucks a GB.
19:07
Now I think what's going to happen is when people are
19:10
paying, let's just say easy math, 10 bucks a month gross, I
19:14
suspect that that's going to be far less than a GB.
19:17
So our actual retail price for data capacity, which is the
19:21
critical path gating factor of this company could could
19:25
potentially be 50 to $100 a GB because you're going to be over
19:29
selling the system. For every person that has this
19:33
premium plan that's implicitly playing 10 bucks a month, how
19:37
much they're actually using is going to be probably pretty low.
19:41
And the system has to be built against the demand curves, not
19:45
the number of people. And so it's about the concurrent
19:48
usage of the systems. And this is where things get
19:52
really exciting. And I don't think anyone can
19:54
certainly no one in space model, I think has an ability to truly
19:57
model this yet. I think ACS has probably done it
20:00
and I'm sure AT&T has done it because they would have have,
20:02
you know, have really good information about the, the user
20:05
concurrency and about how this is all going to flow relating.
20:09
Number of users and dollar per user and whether that's tied to
20:13
data, we're probably going to have data caps in it.
20:16
And it gets really exciting to me.
20:19
And this is where, you know, when when people start to play
20:21
with numbers. The approach I've always taken
20:25
is really just trying to think about, you know, from our first
20:27
principles perspective, what's really going on with this
20:31
system, this system being AST Space model.
20:33
And I've said this before, but I think of AST Space Mobile as a
20:36
solar company and it's, it's constrained by solar power.
20:41
And if it had infinite power, it would you know, have infinite RF
20:46
signal capacity, all it's equal. But it does not have infinite
20:49
solar. It's very, very scarce real
20:51
estate up in space. And So what I look at is how
20:54
much power they can generate. And that's really, you know, the
20:57
proxy for that is the bandwidth processing on the chips.
21:00
And then from that, you can figure out through some math,
21:02
which I shared before, how much data could be, how effectively
21:06
processed, you know, when you start to think about the usable
21:12
data, so time of day, where the satellites are, things like
21:14
that, and start to get estimates of just gross data production.
21:18
And that's the thing I put a number on.
21:20
And I think at the end of the day, I believe I'm going to
21:24
grossly underestimate the earnings power of this company
21:28
because I think the proper way to analyze this is going to be
21:32
looking at how many users are paying effectively a capacity
21:34
payment or an insurance payment for if they need to use the
21:38
service. And that's going to mean that a
21:41
lot of people are paying for a GB of data, probably using very
21:45
small fraction of it. And that's not to say that
21:47
they're not extremely happy customers for the Peace of Mind
21:51
and being able to have access when they need it.
21:54
So I'll move on from that topic. Hopefully that makes sense.
21:59
But then we also have some, some more data coming out just in
22:02
terms of how all these premium plans work.
22:04
And so MPMN put out some data from an interview with Verizon
22:12
CRO. And so it's just pointing out
22:13
that 60% of me user accounts take the unlimited plans.
22:17
And it's just going to the point that people really do pay up
22:20
for, for these premium plans. Again, you know, ask most people
22:24
if you took away their cell phone versus their car, what
22:29
would be the bigger problem? For a lot of people, it's, it's
22:32
their phone. And then we also have ASTS
22:37
investors putting out a tweet, whichever linked that also just
22:42
recaps some of this math that we've been talking about.
22:44
And they get to, you know, a path of how you can generate $5
22:48
billion of revenue from the US alone.
22:51
And I've, I've certainly come to numbers like that as well.
22:54
And I shared the other day and I'll, I'll share it again if we
22:56
have a down day. I, I meant to do it, but last
22:58
week and I want to share new DD when the stock is ripping
23:01
because I don't, I don't feel like it's productive to add fuel
23:05
to the fire. But when we take these
23:07
breathers, I'll put out more hardcore DD because people are
23:10
usually then looking for answers and trying to figure out why the
23:12
hell they own this thing. But I did some work the other
23:15
day on Legato trying to value what that inspection is capable
23:21
of generating as just simply a bandwidth issue.
23:26
And I got some huge numbers. And I'd again, think that
23:30
that's, you know, an intellectually honest way to to
23:33
start to project out some floor revenue figures for it.
23:39
And so you're just seeing more people sort of do some of this
23:42
math on arriving at these really big valuations and it has to be
23:45
juxtaposed against the valuation.
23:52
And so right now we have, you know, 35 billion, $40 billion
23:55
valuation. And so, you know, we're wanting
23:58
to solve for of a viewpoint that we can have 5-10, fifteen, $20
24:02
billion of revenue. These are the things we're
24:04
playing for. And that's why it's important to
24:06
take stock of that. You know, the exceptions are
24:09
like the palantirs where it's like, wow, how's this?
24:13
How does this valuation make sense?
24:15
And I would just be very careful as a side note of ever doing a
24:21
valuation short that is an easy way to lose your financial
24:24
well-being because sometimes I just wouldn't ever do evaluation
24:28
short on a growth company. So that's all I have to say
24:30
about Palantir in that respect. But you know, you have to assume
24:34
that the market is seeing through something where the, you
24:38
know, whatever it is $1 billion are owning today.
24:40
They're seeing a path of of why that's going to go to 5 or 10.
24:44
And you want to take a lot of time and really understand we
24:48
know what is happening behind that process before certainly
24:51
shorting the stock like this. And I think with Asts versus
24:55
Palantir, I think it's far easier to model out upside
24:59
revenue calculations on Asts because it's really just a pipe
25:03
and you're trying to figure out how much data can flow through a
25:04
pipe. And we have really good
25:06
estimates of what that data is worth on a dollar per GB basis.
25:10
And this should be the most premium of all data because it's
25:13
able to serve areas that cannot be served.
25:18
So then let's get back to launch.
25:20
We spent a lot of time on sort of the revenue stuff, probably
25:23
rambled on, but we have Catsy coming out with this point that
25:28
I was talking about earlier of not really knowing which
25:33
satellite will launch first. And so he's put together a
25:37
little graphic. It's the first thing that's
25:39
linked. Just showing, you know, what do
25:40
we know? So FM 1 was boxed, boxed and
25:43
tagged in in October, made it to India in October.
25:47
FM 2 is scheduled to be shipped this month and so then FM 2
25:52
should be on its way to Florida, you know, during the and then
25:56
prepping all these things in the month of October or sorry,
25:58
November. And then we have FM 3 through 5
26:01
kind of all flowing through the system.
26:04
And then what happens though is these Cape Canaveral launches
26:06
are going to presumably be faster cycle until you could
26:10
almost see a scenario, you know, per cat season analysis where FM
26:14
2 launches as, as well as a full, you know, 3 to 4 birdshot
26:19
for FM three and five in, in a dedicated launch in December,
26:23
followed then by a January launch of FM one.
26:28
But I was just checking my DMS and thanks.
26:32
Yeah, I won't name you because I, I don't know if you want me
26:34
to keep you confidential or not, But for the person who is in
26:37
India right now who just DM Ed me with pretty specific
26:43
information, it seems like, you know, Katsu may be wrong.
26:49
Katzie was wrong about everything.
26:51
Elias or a launch might be sooner than January and I'll,
26:54
I'll check in with this person and see if they're comfortable
26:57
with me sharing any more specifics.
26:59
But it is exciting. I kind of liken it to the B2
27:04
attack on Iran, which is funny enough, one of my friends is in
27:06
the Navy. Then he got shipped off to Guam
27:09
this summer. And they don't tell, they don't
27:12
tell people what they're doing. He's just like, all of a sudden
27:13
he's like, I got to go to Guam. Then he was basically, he was
27:16
playing golf all summer. But they just had to ship all
27:19
the all the guys out into the Pacific just so that
27:23
counterintelligence people would, you know, in fact, see
27:26
all these people shipped out only for the real attack to be
27:30
launched in the other direction. And that's what I think is going
27:35
to happen with ASTS is everyone's going to have all
27:38
their eyes on India. And then you're just going to
27:40
get blasted by all these launchers in Florida first,
27:42
which is which is pretty exciting.
27:45
So then we also think, well, there's a lot of strategic
27:49
activity happening right now. And so I think a lot of people
27:52
have seen the market Trump doing something seems quite logical to
27:56
me, which is don't depend on China for critical items for,
28:01
you know, US energy and for the weapons manufacturing.
28:03
So all the rare earth metal guys have gone crazy.
28:06
There's a bunch of activity in uranium.
28:09
There's a side note. I kind of liken this to what
28:11
Elon did this summer where the spring where, you know, he went
28:15
crazy and threatened the Department of war without, you
28:22
know, whether he'll make his systems available to them.
28:25
And now he's, you know, realized the error of his way and and got
28:28
back in line. And the right analysis of that
28:33
is not to go, oh, he was just kidding.
28:35
You know, he just had a tantrum like a three-year old.
28:37
That's cool. So I guess we can go back to,
28:39
you know, having a sole source vendor for this critical
28:41
infrastructure. Ha, ha, ha.
28:43
No, Anyone on the Pentagon will go, OK, We saw that card flip.
28:48
Our memory is forever. We're going to diverse away,
28:51
diversify away from this guy. We're not going to not use
28:54
SpaceX, of course, but we are definitely not going to put
28:57
ourselves in a position where anyone, much less a capricious
29:01
person who publicly said they're going to screw the US.
29:05
We're not going to put that guy in a position to screw us again.
29:09
That is a really good bull case for Rocket Lab, Blue Origin and
29:14
things like that. And so when I see people kind of
29:17
peeking all these rare earth guys and, and you get other
29:20
things, you know, based on whatever news is happening with
29:22
China, it's the same thing. It's like, well, OK, they're
29:26
probably going to find a trade deal with with China that
29:29
doesn't change anything. And so they already showed their
29:31
card the the Department of War's memory is forever.
29:36
They're still going to close all these vulnerabilities.
29:40
And so it's kind of funny to see the market puke all these things
29:42
like, like the, the memory is, you know, for one minute and
29:50
people are like, oh, that's cool, I guess try to name your
29:51
friend. That's not the way it's going to
29:53
work. And so then when you think about
29:55
ASTS, you know, this, this idea has been building among this
29:59
base mob of, you know, whether ASTS is going to get strategic
30:03
U.S. investment. I I obviously don't know, but
30:07
when you think it through, it's not hard to imagine that Trump
30:11
is going to say, well, we're about to give you this massive
30:15
golden Dome participation. I want something in return to A,
30:20
you know, make sure that there's alignment B to get, you know,
30:24
something else like the way a kickback for the taxpayer,
30:27
things like that. And so it's, it's not a stretch
30:30
to me that that could happen. I don't know if I actually want
30:33
it to happen. It, it kind of opens Pandora's
30:37
box to me whenever you have sort of a government participation
30:42
with your company. But in the intermediate term, it
30:45
certainly is not negative because it will be a de facto.
30:48
This company is not going away vote and it will be a de facto.
30:52
This company has infinite money vote and it'll be de facto.
30:55
There are no barriers to this company's successful vote.
30:57
So if it did happen, then I think we could kiss the shorts
31:00
goodbye once and for all. I don't know if it will happen,
31:04
but I'd have that in back of your mind because that is
31:07
clearly the new playbook of this administration.
31:10
It, you know, command economies, right?
31:13
What could go wrong? But I, I don't see the flaw in
31:15
it. I see this sort of simple, the
31:18
simple reason why politicians would would want to be doing
31:21
that. And that would certainly be tail
31:24
risk for anyone that short this stock.
31:26
It would totally change the risk return calculations.
31:32
So let's go back to Tam. We had AT&T and Toyota, an ounce
31:38
of five GDL. Toyota is the biggest car maker
31:41
in the US and AT&T is widely considered the leading connected
31:44
car provider with around 60 million cars on its network.
31:48
It's exciting. I the other day just
31:50
anniversaried though, you know, one year anniversary on my
31:54
Toyota and they hit me up with, you know, do you want to keep
31:57
having all these services? And so I do, I do like to be
32:01
able to lock and unlock my car from my phone and that requires
32:05
a cellular connection. And I, as it turns out, I have
32:08
to pay for that. And it's, you know, 10 or $15.00
32:10
a month. And now I haven't done this
32:12
analysis, but I could actually probably easily check on my
32:15
phone. Actually, I'm going to hazard to
32:19
guess that my data usage to occasionally unlock my car is
32:24
like 0. And so then you're paying.
32:28
I'm just looking at my, I'm just looking at my iPhone right now
32:33
just for the sake of phone. And so this goes to my point
32:38
about I'm, oh, here we go. So on my Toyota app, my cellular
32:42
usage has been 530 megabytes and that is in the current period.
32:49
I also had to download the app three times because it crashed
32:53
this week. And so I don't know if that
32:54
totally skewed that because it seems like 500 megabytes has
32:57
quite a lot of data considering how much I use it.
33:00
But in any respect, it's a lot less than a GB.
33:03
And that goes to my point is I'm paying whatever it is 10 or 15
33:06
bucks a month and I'm paying for the usability of that app.
33:12
I'm not paying for the data capacity.
33:15
And so the load on an ASTS satellite for that is going to
33:18
be quite low and the ARPU is quite high.
33:22
And that goes to my point of how you can start to have these sort
33:24
of 50 to $100 per GB realized revenue coming through the model
33:31
because it's going to come down to your concurrencies of usage,
33:37
really exciting concept, similar to how airlines try to oversell
33:43
a flight. You can only oversell a flight
33:45
by, I don't know what it is, but 2 to 5% I, I don't know, I
33:50
cannot be that high. You can oversell a system like
33:53
this probably by one or two, 100% if not more.
33:57
And that's where the incredible revenue opportunity is is going
34:02
to lie. Now let's go back to Catsy.
34:07
So going back to talking about M and OS, we found out or actually
34:11
we're going to start with ASTS investors again.
34:13
So Vodafone, Turkey acquired an extra 100 megahertz of 5G
34:16
spectrum. So a lot of spectrum.
34:19
We know we're actually pretty big in Turkey.
34:21
We have a ground station there. Vodafone is there.
34:23
That's a market where where we're going to live.
34:26
And Cassie last week had speculated the timing of things
34:31
where once an MNL had their spectrum, then they would sign
34:36
their their DA. And so we were wondering what
34:38
was taking so long at Verizon. And you know, we then speculated
34:42
they finally got their spectrum situation locked down, then they
34:46
locked down their DA. And so it's interesting as we
34:51
start to see whether or not this is a domino where if an MNL
34:55
closes on a big spectrum position, which is particularly
34:57
usable with this system, is that actually starting to become a
35:01
forward indicator of when ADA is going to fall as Katz would say,
35:04
the spectrum is going to find its most efficient home.
35:08
And then AMPAN Mound just reminded us all something that
35:11
really shouldn't ever be forgotten, which is that SATCO,
35:17
which is the Vodafone ESTs partnership has free word at
35:22
last camp, but I think it's 21 or something M&O's now signed up
35:26
and working with it. Pretty exciting.
35:30
And then there was also something slip the other day
35:32
that I think it was in a what was it?
35:34
I think it was in the Bell Canada teaser video.
35:39
It showed that they were working on S band.
35:41
And then we have this this week was interesting.
35:43
This account mega constellations, which is an
35:46
industry focused commentary, very smart and detailed, made
35:51
the point that sky low Echostar, these guys, they're going to be
35:55
losing their S band in Europe. They expire.
35:59
Becker gets to be very exciting. So when a new technology comes
36:02
out like ASTS space Mobile and you start to have renewal cycles
36:05
of spectrum, who can pay the most while AST space mobile,
36:11
duh, someone who has a big robust broadband system is going
36:15
to have much higher value at use of spectrum then someone with a
36:19
clunky little narrow band solution.
36:22
And you can see that ASTS is chomping at the bit for this.
36:25
I mean, this was at the heart of the MRSA adversary proceeding as
36:28
part of the Logano bankruptcy. We, we already have our IT
36:32
coordination rights. The writing's kind of on the
36:34
wall. We, we certainly don't have to
36:37
think too hard about Abella's ambition.
36:39
He kind of has showed his hand in this respect.
36:42
So we want to keep a close eye on here because the value
36:47
creation, you know, what started as sort of like a a joke that I
36:50
was serious about when I said that ASTS peace bubble is the
36:53
first spectrum treasury company. I wasn't kid.
36:57
And so I, I do think that ASTS space mobile could ultimately
37:00
really be a a spectrum treasury company that just happens to
37:04
have an ability to utilize it. And so when you think about what
37:07
dish was dish was a with Charlie Ergen's company was a spectrum
37:14
treasury company. They just had no ability to use
37:16
it. And that's where he got
37:17
cornered. He ultimately was able to
37:18
navigate out of it, you know, somewhat by the grace of God,
37:23
honestly, but but he was stuck with a ton of spectrum, but no
37:27
ability to light it up and no ability to light it up
37:29
efficiently and totally cornered.
37:32
Think about that, that analog with AST space mobile.
37:35
So they can first of all, they're playing nice with the M
37:37
and OS so they have access to the customers.
37:40
Charlie didn't. Then they can aggregate all the
37:42
spectrum for pennies. They've already showed that with
37:46
Legato. So spectrum other people just
37:47
literally could never use because of interference issues,
37:50
things like that. ASTS is the only company in the
37:53
world that could use it to pick it up for cents on the dollar.
37:55
And then they can bring that spectrum back to their M&O
37:58
partners to monetize it, get the full support to get it
38:02
regulatory approved, and then get access to consumers.
38:06
It's really the dream Charlie had over the past 1520 years,
38:11
but one where there's an actionable strategy to make it
38:13
happen. If if I'm right on that, that
38:17
starts to become, you know, the, the most convincing path on why
38:21
what we're looking at here is a, you know, half a trillion to a
38:24
trillion dollar company. Because being able to aggregate
38:27
spectrum globally and monetize it through access with all the M
38:35
and OS Subs is a really big idea and no limit to that.
38:40
So big ideas are good. Then we also have, you know,
38:44
strong suspicion that we're going to be getting a Saudi
38:47
Arabian contract soon. So there's been a lot of
38:49
activity with Saudi and AST Space Mobile.
38:53
People that are older in this investment will know that Tarek,
38:58
who was a former board member representing Rakatin, left
39:01
Rakatin to go be the chief technology officer, I believe of
39:05
savvy Aramco. And he was one of the big
39:07
proponents of AST Space Mobile. And he's sitting there at Aramco
39:11
and his job is to figure out how to connect all their oil fields.
39:15
And so they have all these far-flung oil field assets in
39:20
the desert and offshore and things like that.
39:22
And it's crucial to have information and, and data so
39:24
that you know, how to do preventative maintenance and
39:26
things like that. And so it would, it should come
39:30
as no shock if we end up seeing a deal like that.
39:33
But then there's been lots of touch points where we believe
39:37
that Asts might actually get spectrum in Saudi Arabia.
39:41
This is going back 434 years ago where Katzie found some details
39:45
on that. But then a deal with STC Saudi,
39:48
Saudi Telecom wouldn't come as a surprise.
39:51
And that that come with strategic investment and things
39:55
like that. Keep an eye.
39:57
We just show the global reach of this company.
40:03
Then we also increasingly have Europe waking up to.
40:07
The problems that they're facing in terms of defense.
40:15
And so Europe is very quickly realizing they need to defend
40:18
itself. And in doing so, you have to
40:21
have the command and control systems.
40:22
You have to, you know, look at the US you know, we are a expert
40:27
logistics operation. When you think about the US arms
40:32
armed forces, that's, you know, I think that's why we went is we
40:35
have the ability to move stuff and have integrated operations
40:38
like no other country in the world.
40:39
And then we also have some, some great technology, but that goes
40:42
hand in hand. Europe does not have this stuff
40:45
and they need it. And the power of Starlink in
40:49
Ukraine, I think is a really wake up call.
40:51
And then also being denied access to it is an even bigger
40:55
wake up call. And so Europe is struggling to
40:58
do this. They have this iris squared
40:59
system. There's we wrote about this a
41:02
couple weeks ago. Why this is potentially really
41:04
flawed. And meanwhile you have Vodafone
41:07
sitting there with Sacco, which has all of the regulatory
41:11
compliance stuff necessary to be the system that will work.
41:17
And importantly, and this is a, a term we've we've kept using
41:20
and we just want to drive it home is day of sovereignty.
41:23
And so the data has to be secure and resilient and it cannot
41:26
leave the continent, for example, if you're serving in
41:28
Europe. And that's something that Sacco
41:31
has really had in the front and center.
41:34
And then let's think about where data sovereignty can really blow
41:38
up in your face. And so this week, interesting,
41:41
there was a big scandal that sort of was unleashed.
41:45
And here we have Mario Nafal highlighting it for us where
41:49
researchers were able to expose a massive satellite security
41:53
meltdown. And so A-Team from UC Santa, San
41:56
Diego, and University of Maryland.
41:59
Interestingly, University of Maryland, big as TS connection
42:02
with the University of Maryland, for its worth, spent three years
42:06
eavesdropping on satellites and they were able to intercept a
42:09
lot of it. Interestingly, they pulled down
42:13
T-Mobile calls and texts in flight, Wi-Fi data, blah blah
42:15
blah, interesting. They call out T-Mobile.
42:20
Interesting. So I wonder if this is perhaps a
42:23
coincidence or if this is just a real life demonstration that
42:27
T-Mobile chose the worst possible solution they could
42:30
that's exposing all of their customers data, but more
42:33
importantly is a system that is completely unsuitable for
42:35
government use. By contrast, AST Space Mobile
42:41
addresses these issues. So while this article might in
42:44
general scare people go Oh my God this seems like a really big
42:46
problem for generic satellite technology.
42:50
This is really specifically an opening for AST to shine.
42:55
And so right dropped in the weekly is a, you know, short 3
43:02
paragraph blurb on exactly why space mobile is different.
43:06
And so they're using core architecture that is able to
43:10
provide security that is unlike a traditional satellite system.
43:15
Usually a traditional satellite system is going to rely on
43:17
unencrypted relay paths, which is exactly what T-Mobile did.
43:21
And AST Space Mobile is functioning as a cell tower that
43:26
connects directly, but it it leverages the same encryption
43:30
used by a terrestrial system. So it ensured that the data is
43:34
encrypted directly from the phone to the satellite.
43:36
And that eliminates the exposed unencrypted legs that is
43:40
plaguing the older systems, which is very, very important.
43:44
And then you also have these very advanced phased array
43:47
antennas that create very tight beamforming, which shapes and
43:51
isolates data links to specific devices on the ground, which
43:55
makes eavesdropping more difficult.
43:57
In other words, they're not spamming everything with a
44:00
signal, which makes it easier for, you know, some, some bad
44:05
actor to pick it up. And where's the proof?
44:10
So AST has demonstrated the encrypted secure connectivity in
44:13
real world scenarios as they've PRD in terms of their tactical
44:19
non terrestrial demos with the US military, which included
44:21
voice data, multi party video calls, things like that.
44:25
And it shows that our system is suitable for sensitive defense
44:29
communication. Very important theme that is a
44:35
Needless to say, a couple peels of the onion deeper than most
44:38
shorts are going to go, but very important to be sure to think
44:40
about the Tam and why all the M and OS are going to use the
44:44
system and why all the governments are going to use the
44:46
system. The next thing we want to
44:49
address is Pierre Pierre Leonette is one of these legacy
44:55
sat goes sat go satellite guys in Europe that likes to a pine
45:00
on stuff and just sort of, you know, walk up and down
45:04
Piccadilly Circus being fancy, having, you know, tea at the
45:08
appropriate hour. But it's just sort of like a
45:11
perma denialist of progress. And here, you know, again, he
45:17
does 15 seconds of work. And so showing that the period
45:23
of time where people are without service for AT&T, for example,
45:27
is about 3%. Will that go?
45:31
And his conclusion is, well, there's, there's no tip.
45:34
This goes exactly what I was saying earlier is, OK, so how,
45:38
how often am I out of service per day?
45:41
I, I don't know, probably more than the average person, but
45:44
even if it's 3%, that 3% when it hits is extremely annoying.
45:51
And so for me, I'm always on. Well, I'm always on.
45:54
I'm trying to always have, you know, doing work.
45:57
And so I want to try to get, get calls done.
45:59
I want to be on Zooms while I'm in transit.
46:02
It's time I can use really efficiently.
46:04
And so I have to drive around a lot, unfortunately.
46:07
And if I can bang out some Zooms while I'm doing my commute,
46:12
that's time I don't have to do those same things in my office.
46:16
And that, you know, gives me more usable time when I'm in
46:19
front of a keyboard. And so that 3%, if that means I
46:24
cannot have a reliable connection, then then I cannot
46:27
use an hour to use zoom call because I know it will be
46:29
choppy. Well, that's really important to
46:31
me and I think it's important to a lot of people.
46:34
And so it's that 3% is how often is that 3% hitting people and
46:40
over what, you know, effectively rolling period of time.
46:43
And so to me, the analogue is insurance.
46:47
And so how often does someone's house burn down?
46:51
Well, I'm an interesting person to ask that question, but it
46:54
generally doesn't happen very often to people.
46:56
But when it does happen, it really sucks.
47:00
And so as it turns out, .1% of homes have a total loss claim
47:04
per year. Was that the Tam point?
47:07
1% of homeowners? No, 90% of homeowners have
47:11
insurance. Well, you know, people could
47:13
argue, well, that's because mortgages require and things
47:16
like that. But yeah, it's because people do
47:19
require, people have insurance because it's a high magnitude
47:22
loss that might be low frequency, but when it hits,
47:27
it's a really big problem. And so I think when people look
47:31
at their cell phone when they don't have service, the real
47:36
cost to them is high, but the perceived cost is higher because
47:41
people will fear that they won't have service when they need it
47:45
most. And so as I was driving down a
47:47
mountain today, just thinking, well, my God, what would happen
47:51
if, if my car broke down? There's what am I going to do?
47:56
Am I going to really, you know, walk with 3000 verticals?
48:00
You know, assuming halfway down the mountain, walk 3000 feet
48:03
vertical up or down to, to, you know, then pray to God a gas
48:07
station is open, which of course it probably won't be when my car
48:09
breaks down. You're going to want your phone
48:12
to work. And you know, especially think
48:14
about female consumers. It means the worst fear is being
48:17
stranded on the side of a road. Or for me, I put I, I watch this
48:21
on my kids so they're running around and I can try to call
48:24
them. Of course, they don't have cell
48:26
phone service. So I'm trying to call and find
48:28
my kids. It just go straight to
48:29
voicemail. I'm willing to pay to not have
48:33
that outcome. And so I think of this as
48:35
insurance is the perceived cost of a loss is probably way higher
48:43
than the actual cost of a loss. And the cost of a loss in its
48:49
own right is also high. And so it, this is the sort of
48:53
scratching the surface type of analysis that most of the bears
48:56
have done. And I think they're going to be
48:59
shocked at what the Tam ends up being.
49:02
And it's going to go back to the earlier part of this call where
49:05
we talked about how what you're able to sell us something that
49:09
can have over over. So from the great term you can
49:15
over oversubscription effectively you can sell that
49:17
capacity many hundreds of percent over because of user
49:20
concurrency issues. And so then when you get back
49:24
and just to repeat the punchline of that, when you actually start
49:26
to dial in what the effective dollar per GB of data sold off
49:31
ASDS system is, my suspicion is that it's going to end up being
49:35
a massive member and it will then look like a $10 per user
49:40
per month number. But in terms of actual data
49:43
capacity, because of your ability to oversell it, you
49:46
know, it really might be like 100 bucks a GB.
49:50
That's what's going to be the shock value if I'm right on
49:52
that. And that is not how the shorts
49:54
are thinking about it, I can guarantee you.
49:57
So now, you know, we've identified that Pierre has a
50:00
pretty small creative ability. So then we get to other things
50:05
that are able to sense and detect small things like his
50:09
brain and MP Man points out that we have two satellites that are
50:12
flying very close together. And a lot of us know that the
50:15
reason why 2 Bluebirds would be flying in really tight formation
50:20
is to be testing out PNT applications, position
50:24
navigation and tracking applications and radar.
50:27
And this allows them to have really high resolution radar
50:32
backup, which is really interesting stuff.
50:35
So just a reminder, this is happening.
50:38
Scott has been crystal clear about these non communication
50:42
use cases which are going to drive early revenue gains.
50:46
And imagine the surprise in the market when all of a sudden
50:49
there's a lot of revenue that has nothing to do with consumer
50:54
debt spots. Imagine their confusion when
51:00
hundreds of millions of dollars, if not billions of revenues
51:02
coming through, something that has nothing to do with the five
51:05
second elevator pitch of this company.
51:09
And then we go back to things like drones.
51:12
And this is really interesting too.
51:14
Look at what's coming out. And so Boeing is launching a new
51:19
family of tiltrotor combat drones.
51:21
Well, I was out this weekend with a guy that is a specialist
51:24
for what he was, but some military guy and he was just
51:27
saying, yeah, we can't use helicopters in contested areas
51:30
anymore. You know, Ukraine showed that we
51:31
just can't do that. They all they all get nailed by
51:34
drones. So now we're going to have our
51:36
own Skynet, of course. How are these things going to be
51:38
connected? Somewhat somewhat obvious answer
51:43
AST space mobile. There's not going to be a whole
51:46
lot of friendly cell phone towers where you need to operate
51:49
drones. So then let's look at what Lucky
51:52
Palmer is doing this week. So he's coming out with
51:56
basically Iron Man. And so you have this eagle eye
51:59
thing, which is this war fighter augmentation platform that
52:02
integrates mission command and AI directly in the helmet.
52:06
Again, how are these being connected?
52:10
Are you going to slap a star link dish to this helmet so that
52:14
you have a bright reflective surface so that snipers can, you
52:17
know, put one through their Dome?
52:19
No, you're going to want something super small like a
52:23
cell phone modem integrated into this that has broadband
52:27
capability. I mean, Can you imagine using
52:30
Starlink's DDD capability on this where it takes 15 minutes
52:32
to connect and then you have some narrowband jumbled text
52:35
message, you know, in the troop, you know, the, the soldiers get
52:38
in the command of, you know, fire aim load in the wrong
52:43
order. No, you need you need something
52:46
with a lot more reliability. And that's where, you know, we
52:49
know that Palmer is an investor in AST space mobile reason
52:52
stands that Abell and Palmer are talking.
52:55
It could be very likely that, you know, this is a use case for
52:58
us. We might be integrated into it
53:00
would be really interesting way to express this Tam
53:07
augmentation. And then we again have Fairwinds
53:11
not to be crowded out by Palmer coming out with you know more
53:16
press releases talking about their strategic partnerships to
53:20
support the US government and talking really everyday about
53:24
the non terrestrial network satellite applications that will
53:29
be leveraging AST space mobile. As many people know they're one
53:32
of our prime contracting partners.
53:36
So now going back to sort of other work people did this week,
53:39
we have Antonio Linares, who seems to have a very high
53:44
opinion of himself. He came out with not a deep
53:49
dive, but just an updated thesis.
53:50
So I've linked that here. Maneki has some reach.
53:53
So anyway, I put that there. And then we also had the real
53:57
Professor Kevin, not not Professor Kevin Mack, but
54:00
Professor Kevin Chen, who's a professor in the School of Life,
54:05
came out with a really cool tweet that really broke down the
54:09
essence of the thesis pretty concisely.
54:12
And so that that link is provided for everyone else.
54:16
Meanwhile, where you have calm, cool headed people like Kevin
54:19
Chen who seemingly can write incredible tweets while under
54:24
fire. On the opposite end of the
54:26
spectrum, we had Barclays. And so Barclays decided to
54:29
downgrade the stock and you know, whatever.
54:34
And so basically just saying it ran, it ran too high.
54:40
And I didn't really focus on this too much, but this is what
54:43
the sell side is going to do. And so it just kind of sucks
54:46
because you can catch people off guard.
54:47
And so I know a lot of people were really pumped to see the
54:50
stock break 100. And even Barclay says that our
54:54
upside valuation points to a fair value of $120.00, a $125
54:58
per share. Not even that I would take with
55:00
a grain of salt because all the things I said earlier it, it's
55:03
going to be incredibly difficult to predict the, the upper end of
55:08
the, the revenue opportunities this company has.
55:10
You can try and I think I'm, you know, accused of being a pumper,
55:14
but I think I'm being pretty realistic with people when I say
55:18
I could see a scenario where this thing is, you know, worth
55:22
500 to $2500 per share at some point in time.
55:25
And that's not going to happen overnight.
55:26
So don't go and buy a bunch of call options on that comment.
55:29
But it just goes to show you the range of uncertainty.
55:31
Just like almost 0 people on planet Earth would have
55:34
predicted that ServiceNow is was going to be $1000 stock, for
55:37
example. And that's pretty mundane
55:38
example. That's just a company that has a
55:40
dominant position in a big market and executed in some
55:45
boring stuff. And and that company now is big,
55:49
is what used to be the biggest company in the world.
55:52
And that's the type of power that I think AST Space mobile
55:56
has under the hood. But when the sell side sort of
55:59
did these random valuation downgrades, it creates a lot of
56:03
noise and uncertainty. And I hope people can kind of
56:05
see through it. Then just realize also when the
56:08
stock is pumping like this, there's just a lot of heat in
56:11
it. A lot of people are buying call
56:12
options that creates a lot of gamma.
56:14
And the second that reverses, there's just a lot of fuzz that
56:17
has to come out of the market. And that that happened certainly
56:19
in spades of that reversal from 102 bucks or something to
56:23
whatever the low was overnight, I think 78.
56:25
I decided to sleep through it because I don't want to disrupt
56:29
my my creative energy with noise, but it is what it is.
56:34
And so then the next thing we have is just this idea that
56:40
everything's kind of priced in. And Kevin makes the point that
56:45
if you're too close to a stock, it can feel like it's priced in.
56:49
Like, you know, we make jokes of, you know, Firstnet is
56:51
coming, trademark Firstnet is coming.
56:54
And you know, when you get so used to knowing that something
56:58
like Firstnet will happen, which I adamantly believe that you can
57:04
begin to convince yourself that it's priced at.
57:06
Now, I can almost guarantee that when a contract hits the tape
57:10
with first nut, the stock will go up.
57:12
I can almost guarantee that when DAS hit with various M and OS
57:17
which have been publicly testing with this company, the stock
57:21
will go up. And so when you're so close to
57:25
something, you can really lose sight of the fact that you're
57:28
really not in the market. And So what I noticed my own
57:31
career overtime. So my own detriment is I
57:35
generally do, you know, a lot of work on the names I own, as
57:38
evidenced by this. And so I would know every little
57:41
detail and then I would get so bulled up and so excited that I
57:45
would own the most. And then when the stock started
57:47
going up, I didn't sell because I don't, I don't have that red
57:50
button in my account enabled. And So what, what ended up
57:53
happening is the people who own the most stock know the most and
58:00
those two things are related. They've done the most work,
58:03
they're the most confident. They feel like they can see the
58:05
future of the most clearly. But then when something happens,
58:09
they don't have any more money. And so then the, the stock has
58:12
to find a clearing price that is not Kevin Chen.
58:15
And so Kevin Chen knows everything.
58:18
So he's going to be the person that can most efficiently price
58:21
the upside cases because he knows that this thing is on a,
58:24
on a path to XYZ 2500 bucks a share or something.
58:27
But when when some fun hits or something like that, you re rack
58:31
to the next in the market. And So what we saw over time,
58:35
you know, rewinding back, you know, months ago when the stock
58:38
would really crater, you know, all the space, my people,
58:42
including myself, were, you know, already fully laid out on
58:44
this thing. No more, no more cash to invest.
58:47
And that's what can cause a stock to go from 40 bucks to 20
58:51
bucks because it's repricing to where it's easy enough for the
58:53
person who hasn't done the work to be like, well, OK, I guess,
58:57
you know, they have some satellites that are coming, but
58:59
you know, then maybe it'll get ADA.
59:01
It reprices for that person's own ignorance.
59:05
And that's really the burden of DA that DD that I've seen over
59:09
the years. And I don't really know the
59:10
answer of it, but just that kind of recognize that sometimes if
59:13
you know too much, you think it's priced in, but it's not.
59:17
And that can cut both ways and, and hopefully this really cuts
59:21
to the upside, which it has been for us over the past year and a
59:24
half where all of the things we had researched and expected
59:29
happened and we had an astronomical revaluation of a
59:34
stock when almost all of those things had been predicated
59:39
written about. You can read my posted DD
59:42
document, which is, you know, a year and a half old and it talks
59:45
about most of these things. Most of these things have
59:48
happened and the stock went up. And so always remember the the
59:55
average guy and not talking about the retail investor, but
59:59
the average professional investor on Wall Street has 40
1:00:02
or 50 names to cover. And and this is not going to be
1:00:04
how they spend all their time. It's going to be readings and
1:00:07
sales side reports talking to an expert network.
1:00:10
And when you look at those expert network calls, the level
1:00:14
of diligence is pathetic. They do not understand.
1:00:21
Anything about this company, The one that was posted last week
1:00:23
was a complete joke. They were concluding that ASTS
1:00:28
was somehow in distress and it might work out because they have
1:00:33
some good tax. So AT&T will buy it.
1:00:35
And it's like, hold on, they have like $2,000,000 of cash.
1:00:40
All their partners are throwing money at them.
1:00:42
And AT&T has specifically said it makes no sense for us to buy
1:00:45
this because it's worth so much more as a multi client model
1:00:49
serving the world's M and OS that we could possibly be the
1:00:53
highest value owner. John Stanky's own words.
1:00:57
And, you know, and then people just go, well, you know,
1:00:59
satellites are traditionally pretty hard.
1:01:01
So, you know, we will probably, you know, go bankrupt.
1:01:06
And then, you know, someone's paying $1000 an hour for that
1:01:09
type of insight. Astonishing.
1:01:11
But just don't forget how few people on planet Earth care
1:01:15
about this company as much as we do.
1:01:17
And then you have to realize how little other people know.
1:01:20
And that's OK. It's not an indictment against
1:01:22
them. It's really just a reminder that
1:01:24
you could end up being pretty far ahead of your, you know, you
1:01:28
could be ahead of yourself, but you could almost certainly be
1:01:30
ahead of the market. And that's where chilling out
1:01:33
and being calm is there. Is there a good virtue?
1:01:35
Which is something that's not my strong suit, but it's what King
1:01:38
Tut says a lot, which is just sort of, you know, remember to
1:01:41
chill out because when you've really done the work, you could
1:01:43
be so far ahead of the market that the worst thing you can do
1:01:46
is is think the market is really caught up with you.
1:01:51
And then you can do, you know, all this great work and all
1:01:53
this, you know, thoughtful investing and then, you know,
1:01:57
not harvest the return that you deserve.
1:02:00
So the last thing we have to talk about is Starship.
1:02:04
So more videos are coming out and just pointing out that this
1:02:07
thing looks pretty B when it's landing.
1:02:10
And it first of all, it looks like, you know, CGI.
1:02:15
It almost doesn't even look real, but which is cool.
1:02:18
But it's interesting to think about Starship as a space
1:02:21
shuttle and just what is its real usability going to be?
1:02:27
And in fact, to some people that are experts in the space and
1:02:29
they made the point that this thing has to be just totally
1:02:32
dialed to be economic. It has to be fully maxed out
1:02:35
When you start to think about getting in that dollar per
1:02:38
kilogram down to an efficient level.
1:02:41
I haven't done this math, but it's a, it's an interesting
1:02:43
point. And then also when you look at
1:02:45
the amount of refurbishment that's required, I mean, this
1:02:48
thing is just like falling apart.
1:02:50
And So what really will be the impact of Starship?
1:02:56
It's still in the kind of to be determined point for me, but
1:02:59
something to just keep an eye on and and look at what the actual
1:03:05
levelized cost of this is going to be to operate.
1:03:08
How often someone's going to have cargoes that it can
1:03:10
actually efficiently use such a massive rocket where it becomes
1:03:14
truly more efficient than a Falcon 9.
1:03:17
Interesting things to think about.
1:03:19
And I'm not saying I've made a determination on this, but it's
1:03:22
an interesting thought experiment just to be aware of
1:03:25
when we think about the future impact of Starship, but also
1:03:27
just where launch cross are going.
1:03:30
That's all I got. My voice is struggling feels
1:03:34
like it have knives in my throat.
1:03:35
So I'm going to end the feed here.
1:03:36
Hope everyone has a great week and I will look forward to
1:03:42
joining everyone next week. We're now hopefully I feel
1:03:43
better. Talk to you.
1:03:47
Thanks for listening to the AST Space Mobile podcast.
1:03:51
If you enjoyed this episode and you'd like to help support the
1:03:54
podcast, please share it with others, post about it on social
1:03:57
media, or leave a rating and review.
1:04:00
To catch all the latest news about AST Space Mobile, make
1:04:03
sure to subscribe. Thanks again and I'll see you
1:04:06
next time. We're doing something very, very
1:04:12
big and I think with this technology we can really affect
1:04:15
billion lives. AFT Space globally is the only
1:04:18
company that has proven technology to deliver cellular
1:04:22
broadband connectivity directly from space.
1:04:25
To be everyday smart people will just basically turn their phone
1:04:29
and be seamless, regardless of where you are.
1:04:31
We don't want the user even to know that it's connected by
1:04:34
satellite. Our role is to bring this into
1:04:38
reality, always in partnership with the MMO.