Kook's Weekly - November 09

[00:00:06] Speaker A: This is the AST SpaceMobile Podcast.
[00:00:09] Speaker B: It will just basically come to your phone and be seamless regardless of where you are. We don't want the user even to know that it's connected by satellite. Listen, the opportunity that we have is very, very, very large.
[00:00:28] Speaker C: Good evening, everyone. Chargers really kicked the crap out of the Steelers, so now we can begin. So let's start with some of the crazy things that happened this week. For one, AT&T baited us all with really some engagement farming, which was pretty funny. And so it really just showed the power of the space mob, which from AT&T's perspective, what you can see they've identified is that when they do something like sponsor NCAA, they get the engagements, like 10 likes. When they do something with the Space Mob, they get 2,000 likes, 3,000 likes, something like that. And you, you have to believe that their marketing and media people are totally aware that they've tapped into this crazy amount of product market fit. And so as much as we kind of joke around about this stuff, make no joke about it. At the end of the day, ASTS is a B2B company. I don't think they ever really thought about themselves as a consumer brand. Maybe they did, but I highly doubt it. Unbeknownst to them, and frankly, probably unbeknownst to the MNO partners, a very strong consumer brand has emerged really because of the space mob, but it's showing just what the demand for the services. And so when AT&T sort of plays into this with the waffles and, you know, frankly, the, the red A T&T, which we always joked about trying to get them to do it and they finally did, it is telling you that they see how important this is going to be for consumers and how important it's going to translate into lower churn and higher ARPU. And so never take your eyes off the ball in terms of what it, what this stuff looks like from the MNL perspective. And, you know, they see an ability to get, you know, thousands of likes and reposts and things like that in a heartbeat. And, you know, they're going, hey, this is going to be a big consumer product. And that helps ASTS in all sorts of ways, like profit share, things like that. But then you also have to ask yourself, well, why did they do this video? And so John Stankey, who's the CEO of AT&T, as most people know, was in Midland last week. What we know is that Abel is like me and seemingly very superstitious and likes to have his MNO partner sign the satellites. So what is seemingly very likely that happened is FM2 was Effectively christened. And so as you might imagine, they don't break bottles of champagne over these satellites. The solar is very fragile. And so they don't do that, but they do sign them. And then they did this promotional video. You're not doing these things unless there's something that is coming. And so I think that by all accounts, my suspicion is that FLM 2 is done. And the formality of announcing a shipment date is probably outside of their control, whether it's waiting for a rocket or something like that. We have some theories that they might be bundling that launch, but I would say that this is at best 50/50. But that would be very exciting actually, if all of a sudden instead of FM2 being a single launch, if they surprise people and say, you know, actually we're going to do 3 or 4 in a batch. And I think that there's some possibility that that's going to happen. But I do overall just view this as another message to the space mob. Frankly, when I was getting to be pretty bummed out on Thursday or whatever day this was, I was starting to feel the impact of this correction. My mood was going south. I was whatever, right? I'm an emotional sentiment indicator. And, you know, this was kind of my reminder Uh, just how many exciting, exciting things are coming. And so then let's take a quick little side tour to Tanner Kirk Godway. He's always, uh, he's an engineer, so he's not an emotional roller coaster like myself. And so he studied the press release and went, wait, hold on. They have nearly 500,000 square feet of facilities now. Well, just in August, they had 400,000 square feet of facilities. And so what we're seeing is just the continued ramp of AST's physical plant. And, you know, we, it's hard to triangulate square footage into one thing or another, but what it is telling you is it's confirming the narrative that Scott said is that they have a massive opportunity in front of them to scale up the production rate to first and foremost to 6 satellites per month, but potentially to 12 per month. And they would do that under certain circumstances where they had government business. And so this type of scaling of the facilities, of course, this could just be them hedging their bets and could really mean nothing. But it could also mean that they have some visibility that they have some big government deals, you know, cough, cough, Golden Dome.
[00:06:05] Speaker A: Yeah.
[00:06:06] Speaker C: That are coming. And then they're really ramping up to be able to facilitate that. And as Scott said, worst case scenario, they do all this and ramp it all up and they fulfill these contracts. And then, you know, maybe they have some stranded equipment down the line that we measured, you know, $10, $20 million of stuff they didn't need, but they want to err on the side of having this capacity so that if and when there's an opportunity, they're able to seize it because this really is a first to the prize type of opportunity. We also had Vodafone up the ante. And so we had the CEO of Vodafone reminding all of us that at the start of the year, we had this historic call done by ASTS with Vodafone gateways. They were really fast out of the gate to get their gateway set up so that we could start to show These proof points. We had the UK call, things like that. And whoa boy, were we in for a surprise on Thursday night when there was another crush release by Vodafone. And we'll get that to a sec, get to that in a second. Um, but before even, uh, we, we get to the European news, we have Bell Canada coming out in their earnings call. And they said, quote, they announced a partnership with AST SpaceMobile to deliver planned Canadian-owned and operated direct-to-cell service in 2026. And so we're all waiting. This should not be a surprise, but we're all waiting for Bell Canada DA. They've tested, they have the licenses. They're now saying that they have the partnership. It's in their earnings slides. It would make sense that a Bell Canada DA would hit. And after the STC DA we had the other day, we're starting to see that these dollar prepayments are starting to get quite substantial. And so I don't know if Bell Canada will follow suit. They're already an investor in the company. There might be some different treatment for people like that, but we do know that these prepayments and revenue estimates are getting to be very big numbers and frankly in line With the bullish estimates that people like me and the rest of the space mob have for this company, you know, we're all, you could bifurcate this into maybe 3 groups of people. There are the ASTSQ people who think this company will fail and go bankrupt, and that's one bucket. So for them, this is all just, you know, one big pump and doomed. So whatever. Then there's the second bucket of people. These are the same people that would have said, well, okay, Tesla can build a car, but this is going to be a very niche market for, you know, if you're using a Tesla analog, they would have seen the Roadster and go, well, how many people could buy that? And then maybe when they got hit with a Model S, they go, yeah, but you know, the high-end luxury car market's not very big. They wouldn't have seen the Model 3. Um, in the uptake of things like that. So that's fine. Um, these are just this, I'll call them small thinkers. And then there are the people like me who are, are well beyond the dead spots. And so I should actually go back a bit. That middle bucket are people that believe this is kind of a dead zone fix and that's it. And then they'll look to these documents, which are all out there by the FCC that show you know, what percent of the population in the landmass have 5G service and, you know, cell phone coverage, things like that. And it's pretty small numbers. There's like one or, you know, you'd start to say, well, only, you know, 1 or 2% of the people will use this regularly, therefore it's small market. And I think they've missed the forest for the trees because then the people like me say, hey, this is going to be a lot like home insurance where the frequency is extremely low, but the perceived severity of when it happens to you is very high. So you're willing to pay a small price to insulate yourself from that risk. And never mind that there's going to be these government contracts, FirstNet, things like that, IoT, defense, you know, and so once you peel back the onion and do the work, dead zones become frankly, you know, just like a little— I feel anthill of an opportunity versus the pyramid that is actually going to exist. So now when we think about that massive opportunity, the Vodafone press release we had on Thursday night, it is one of those, oh my God, type of choices. ASTS, I think it was like 2 o'clock in the morning for New York people. I happened to be up past my bedtime. And so It's always kind of funny, you know, if you want to believe in just fate, you know, simulation or whatnot. I've had a couple times in my career where for one reason or another, I've been awake at a time I really shouldn't have. And one time I remember really vividly, it was back in '08, right as the great financial crisis was really ripping and one of my big investments was pretty effed. I remember I woke up just Out of the blue at like 3 in the morning or something. And this company was based in Europe. And at that moment, a press release hit on a massive contract they won that really would've given them, you know, a path to live. I remember, what was the probability of just waking up randomly at 2 in the morning and then decide to check Bloomberg for whatever reason? Because you like felt something. And so here I had no idea this was coming, but I was up past my bedtime. And, you know, then this hit and it was almost like I was, you know, meant to be watching this. And this press release is quite the riddle. And so we read this and it starts to look a lot like IRIS². It looks a lot like the initiative the Europeans have been trying to do to respond and acknowledge the gap that they have in terms of their reliance on Starlink. And so let's start to talk about what they released. It's a planned EU constellation. They talk about this synthetic control, this control switch, which was really allowing the constellation to have sovereignty, really important. And so then you start to think, well, is this a new constellation? And that starts to get a little bit confusing. And then they talk about how it's going to have the equivalent of European FirstNet. And so in addition to doing commercial mobile broadband, the constellation will support public protection and disaster relief efforts. And so then we ask ourselves, is this an entirely new constellation to support Europe, or are they adding features that allow an existing constellation to effectively be a synthetic European constellation where it's needed. But they have some interesting things that have dropped from this. There's a new ITU filing in Germany for a mid-band EU constellation. It has this command switch, which allows EU oversight. It is therefore a separate regulatory network in the eyes of the EU. And so it's the same hardware. So it's the same Bluebirds, but we do think that it, because it's going to be a mid-band constellation, it's actually going to be a different shell. And that gets really exciting. I was talking to Katzy and Ampeman about this because it's not like you're going to build this constellation and only have it utilized while over Europe. That makes no sense. That was actually the original flaw in the IRIS constellation because economically that's kind of a dud. Well, now it's entirely possible that the EU will just subsidize you and give you a bunch of money to make that work out. But it's also entirely possible they will subsidize you and make that work out. And then you have this nice mid-band constellation over the rest of the world as well. And then we've dramatically increased our capacity beyond which we had already planned for and really just started to hyperscale. And the other thing that was immediately obvious to a lot of us Is that these guys just get the EU 2 GHz MSS spectrum? Did they just backdoor into Inmarsats and EchoStars spectrum? So these spectrum bands are already being actively reviewed. And when I actually should have researched this a little bit more, but, uh, there was some work by Mega Constellations, which is an account we've talked about a lot here. And, um, they talk about how some of these spectrum licenses are actually up for review in kind of 2027, 2028. And it's not for sure that the existing holders of the spectrum are going to maintain the same rights. They might have to be forced to coordinate with AST and share. And so it ends up getting Pretty interesting as to whether or not, you know, Elon just spent $20+ billion on his spectrum. It'd be quite the coup if Vodafone figured out a way to get it for free or near free or get paid to take it. So I strongly suspect that there's going to be a lot more to talk about from the earnings call on this to the extent they're able to. And I would just like to point out a tweet from Dr. Mike, who's Cytoplasmic ANA. Um, and he just points out that the data sovereignty issue is likely what convinced the EU to award ASTS the IRS-2 contract. Now he's making an assertion that we actually won the IRS-2 contract, which I don't know to be true, but it's, it's certainly looking Possible that that's what happened, and that would be a big deal. The takeaway would be EU just anointed us as Starlink, and then we're going to be able to get the economies of scale of that to then have a dramatically unfair advantage serving the rest of the world with that very same constellation. Pretty interesting stuff. So the press release wasn't. specific enough to say that everything I just said is true. And there's a, you know, very high probability I either got some things wrong or, you know, with good intent, but got it wrong or left out details because I just don't know or don't understand. But I think the general thrust here is one that is somewhat unbelievable. And I again suspect that tomorrow we're going to learn a lot more. Anpanman did a Spaces on this topic as well. So I've linked that out. And then also just useful, and this is less relevant now if people are following that the U.S. government's going to reopen, but Katzi was noticing that despite the government shutdown, ASTS was actually still getting letters processed by the FCC showing that we had our spectrum consent letters in line. And so these spectrum consent letters, why this is important is this could mean The approval of our supplemental coverage from space application, the SCS. And we're looking for that final market access approval, which I firmly believe we will get. Timing uncertain, but that could actually be happening, you know, potentially pretty soon. And I think that that would be a pretty meaningful event. It will at the very least be the final sort of regulatory wall that will come down. And frankly, the wall that most people 3 years ago said would have been an impossibility. And, you know, all else equal, rewinding back to that point, of course, when the stock was like between $2 and $5, you'd expect a quite dramatic change in the market assessment. And now that we're sitting here at $70, you could say, well, the market is probably now finally arrived at the idea that the FCC approvals are in fact inevitable. But it will still nonetheless be a really nice event to get past us and important for, for very large long-only investors too, just to know that there's that regulatory certainty. So we want to have that and get it out of our, our way. So now let's take a little chat with Kevin Chen. Um, so Kevin, as always, is plying the world for all things ASTS, and he found a really cool article With, uh, Safaricom CEO, and they're talking about the active trials they're doing with, um, you know, they don't mention ASTS by name, but with ASTS. And they get this point that Africa's scale and geography mean that there will always be areas that are hard to reach with traditional infrastructure. Satellite is a complement, not a replacement. That's what they always say. Um, but I think that will be blurred lines pretty soon. But they say, we see 3 big roles. First, direct-to-mobile moves toward universal coverage, even the most remote places. Well, we know that. Second, this is interesting, backhaul. So it's vital in some of these markets like Ethiopia where fiber is still developing. And so it'll help light up sites faster, more cost-effectively. I really hadn't thought about the system being used to facilitate backhaul, but there you have it. And then third, broadband, bringing reliable connectivity to rural communities. And that's really where the blurred lines occur with the SpaceX terminals. For a lot of people, having their phone as a modem with the speeds we're able to reach is, is going to be good enough. And I think that's going to be the threat that SpaceX is going to have to confront where for, you know, like rich Western countries, for example, I have, uh, what do I have? I have Cox. I have fiber in my house. I don't need this, but.
[00:20:10] Speaker B: Yeah.
[00:20:10] Speaker C: If I had, if I didn't have a fiber line and I had SpaceX, then yeah, I'd pay it or whatever. But for a lot of people, being able to get that 35 megabits per second on their mobile phone, it is going to be good enough in these developing countries where it's really a 2-for-1. And that's where I think you're going to see this market segmentation where a lot of the potential demand SpaceX either wanted to get or couldn't get because of price elasticity. We're going to be opening it up, this entirely new segment of effectively what's the fixed wireless market. And that's going to be a surprise to people. So anyway, that's exciting things. And then let's also check in with Tanner again, just to review kind of what happened this past month. It didn't just establish it. Until September 30th, Vodafone CEO visit.
[00:21:07] Speaker A: Wow.
[00:21:09] Speaker C: September 30th, we've got a production update. They said, you know, we're actually going to do this. We're not going to, we're not going to eff it up. And then on October 2nd, the Bell testing results. Again, that's a precursor to a DA. I'm almost sure. Also on October 2nd, we had Scott on Bloomberg saying, hey guys, things are going to be good. Then we had the ATM announced. That was a head fake. That's when shorts got super excited and then got their brains blown out because the next day Verizon DA dropped. Then we got an award. Then we shipped FM1, which is exciting. And then at the end of October, we got included in the 3GPP standards. And then the next day we had the AT&T CEO visit. The day after that, we had the STC contract announced. And then of course, we just had this big, you know, potentially we won the sovereign system for Europe. The pace of development here, I've said this so many times, but the pace of development here is astounding.
[00:22:20] Speaker B: Yeah.
[00:22:21] Speaker C: And Tanner is evidently getting lazy because what he left out too is that we also secured Legato financing last week. We got $420 million of non-recourse debt done for the bridge loan. That is the amount of money needed to pay Imarsat to basically get those guys to shut the hell up until we get our FCC approval, in which case then there's the takeout financing of that bridge. But it was a $420 million loan, which is, you know, supposed to be funny to people on Reddit. And we did the meme, but the Legado financing was done. I think some of us were thinking with the amount of cash that ASTS had on their balance sheet, it occurred to me that maybe they were just actually going to pay the Legado fee off their own balance sheet just because it would effectively be a carry trade. And I thought, okay, I could see how I could justify that. But I'm almost glad they kept the original structure. Keeping it totally non-recourse makes the story more simple where we have this operating business of satellites, which is really the, that's the recourse business you have when you own a share of ASTS. That operating business is, you know, really what you're looking to. And then you have this other bucket where you're going to have this capital structure, which doesn't impact your claim on ASTS. But really to the extent that like Outer Spectrum is worth a lot more than what we paid for it, which it almost certainly is going to be worth 10 to 20x more, then all of that excess equity value flows to you as an AST shareholder. But if it is a bust, for example, if the FCC inexplicably doesn't approve it or something like that, then you're really no worse for wear. And that's pretty cool. And so I think that's the right structure to have. It simplifies it. There'll be some element of some of the parts for a while as people look at this company, but then over time it's going to blur and people will just look at the overall operating results, which are in part due to the satellites we have, and then in part the enablement of our satellites by the spectrum we have. And there will, you know, in a year or two, People won't really distinguish between the two, but for now they can, and they can do some of the parts on, hey, you know, what is this 45 MHz of spectrum worth? We're getting some comparable transactions put up on the tape. People could start to see that this is, you know, maybe worth $10, $20 billion per just for ASTS and start to realize maybe my downside is actually really protected. Maybe you know, for these margin of safety guys, you know, maybe they actually start to see this put you have on the share price that is pretty high. And then they then arrive at the asymmetry of this investment, which is certainly what I see. But that anyway is a long way of saying that these guys got their non-recourse loan done, which is exciting. And so now let's go back and talk more about Spectrum. And so I think a lot of us are learning, Let me just take a sip of water. A lot of us are learning or being reminded of just how important this satellite-enabled spectrum is to everything outside of your phone. And so we have an account, uh, @Tomster000 was sharing some thoughts and just pointed out that a Level 5 vehicle must operate. So Level 5 being a fully autonomous car.
[00:25:55] Speaker A: Yeah.
[00:25:56] Speaker C: Which hopefully we'll all have one day, must operate safely even with zero connectivity. So 5G is optional, but it can enhance situational awareness. And so the big markets, EU, US, Japan, are going to require redundancy. In other words, a car must not depend on connectivity for safety-critical functions. It must have positive control. And so this is where satellites come in, because if you're dependent just on the terrestrial network, you're not going to be able to have positive control of, of these autonomous devices all of the time. And this is going to make everyone's life a lot easier when you do have redundancy, number one, but also then universal coverage. And I think we want to separate 2 of these concepts because the universal coverage component is the dead, the dead zone concept.
[00:26:50] Speaker B: Yeah.
[00:26:50] Speaker C: You know, the 2 to 3% of the population that isn't covered, small number. Redundancy is actually 100% of the population. Redundant means the dead zones plus the things that are covered by the terrestrial network. And that's where I think people have misunderstood the market opportunity here because that's where capacity payments come into play and simply just enablement that could not happen without the redundancy. So that's where the really big idea happens. And then we also had some sell-side guys chime in. So for example, we had William Blair chime in on, uh, really just kind of reflecting on the SpaceX EchoStar spectrum deal and just went, this is reverberating through the market. You know, you're seeing the legacy guys really freak out and try to sell themselves. But in fairness, like they're also having the value of their spectrum highlighted. And it's a tricky thing if you're an investor, because I certainly believe that the value of the legacy spectrum has been revalued. That's a belief I have. But you go back to, you know, simple M&A dynamics of, well, if Globalstar and Iridium and Viasat, et cetera, have these valuable MSS Spectrum assets.
[00:28:10] Speaker B: Great.
[00:28:11] Speaker C: Can they really use them? Is the value at use by them high? Well, no, these are not particularly valuable companies, single-digit billion-dollar companies. And then was it valuable to someone else? Is it valuable to someone else? Yes, it's valuable to AST SpaceMobile and SpaceX. But when they have enough, The incremental value goes down a lot. You don't have a lot of buyers potentially. And this is the problem that Charlie Ergen got himself into. He went and squatted on a bunch of spectrum, but he only had 2 or 3 buyers. And then those guys figured out something else to do for a long enough period of time to really drive him to a near death. And then he was able to get a deal done, but you know, certainly wasn't the deal he had hoped to get done. And so that's kind of the problem these legacy guys have is there's some prisoner's dilemma of who gets a deal done first because you just don't know, is ASTS good after the 45 megahertz of spectrum? Very, very possibly. You know, they could just say, we're, we don't need any more. You know, we have no more bid and SpaceX just bought obviously a huge amount. And so it's a little scary if you're Globalstar or Iridium or Inmarsat or Viasat. You know, there could be some game theory of sell fast, you know, before these other guys are full. So it'll be interesting to see how that plays out. We also had Cantor come out with a note and they actually went right to the whole Iris Square idea and they started talking about it and, you know, really questioning, did ASTS just win Ira Square? What's interesting about that is Lemmick. And so Cantor has connections at this point directly to the top. So you really want to watch what Cantor is saying, and they're saying some good things. So we'll, we'll find out soon enough, but it is nice to see some of the sell side getting to the same conclusions that That we were having. And now let's think about SpaceX a little bit. And so Elon got his trillion-dollar pay package.
[00:30:28] Speaker B: Great.
[00:30:29] Speaker C: I could see why if I'm a Tesla shareholder, I would do that. But then Elon also came out this week and said maybe SpaceX should become a public company despite all the downsides of being a public company. Well, the downsides of SpaceX being public are Numerous. I just can't even imagine developing Starship under public pressures. I mean, it would be really interesting to see where that thing trades when you think about it, because Starlink is a business that could very easily start to have some competitive pressures. You know, if you're looking for an analog of that, it's called Charter Communications, which had been the golden child. of all things Tiger Capital Management 10 years ago, and people just couldn't get enough of John Malone's cable alchemy. And now it trades like crap. You have competition, no growth, margin is coming in. And, you know, Starlink at some point, you know, already might be having those issues. We don't know around their financials. And then you might have the launch business having some significant pressure. in the coming years as new capacity comes online. And so I could see why Elon is, you know, sees the downside and that's what he, that's what he talks about. But then you have to ask yourself, how healthy is SpaceX? They just spent another $2.5 billion on some additional spectrum from EchoStar. They just spent $20 billion. They couldn't do it all in cash. They're doing, you know, half and half. And I don't know what the cash flows really look like on the launch business when you think about the amount of money they're spending on Starship until, you know, we go back to whether ASTS is actually really the dominant financial player in this space, you know, especially when we think a couple months out. Then we think about what SpaceX's ability is to truly compete in D2D, and we see all these other rumors, you know, we'll loop to this right now, but with these rumors around Globalstar and Apple and just kind of what a mess these other companies are in. And so there's a really great article by Quilty, which is a space consultant, but of the actual good type. And so Quilty's been around, he used to be a banker. I forget where he was. It was like Raymond James, I think. And he doesn't have these same biases that Tim Ferriss has. So I've always really respected Quilty. And so Quilty did this great analysis of GSAT and, you know, Globalstar is in a tricky position because they have all these repayments due from Apple and Apple kind of has them By the throat with their spectrum already tied up, you know, really tight because Apple's effectively paying for the constellation off it on its own balance sheet, but just through the balance sheet of Globalstar. And now the market's kind of moving in these interesting ways and Globalstar probably wants to get a piece of it or exit if they could. But now, you know, who can buy it with their spectrum already spoken for? You really have to ask permission for Apple to do anything. And so we've been really racking our head as to whether SpaceX is really going to buy Globalstar, and if they did, what that would mean. And I think my conclusion now is that the Globalstar transaction is in trouble and they're trying to plant stories to kind of put some feelers out, get some other interest, but otherwise seemingly kind of boxed in. And so you can read this Quilty post if you're just trying to stay on top of it. I'm leaning, I guess, you know, Monday will be interesting because it's always merger Monday, but I'm leaning thinking that they're kind of in a problematic position. And then it seems pretty unlikely that ASTS is going to step in because I don't know why they would. And then when we, we had some articles floating around this weekend after I put out the weekly about How Apple, you know, really does have these ambitions to have satellite connectivity in their phones, but really do want to draw the line where they're not competing with the MNOs, yet at the same time want to offer more than what Globalstar can provide. All roads really lead me to believe Apple will partner with ASTS. And, you know, to a man with a hammer, the world looks like a nail. But that really does seem like an obvious conclusion, whether it's inescapable or not remains to be seen. But, you know, we do know that Apple is aware of AST SpaceMobile because they are going to have to incorporate this Ligado spectrum now that we're in the standards, you know, as one minor point. So time will tell whether there's another transaction. And the last thing we did not have this week, Was a New Glenn launch that got scrubbed because of the weather. That's now going to be on Wednesday if the weather permits. And, you know, frankly, I'm almost glad because I don't know if my little heart could handle so much excitement on one weekend. And that means we'll have a nice idiosyncratic earnings call tomorrow without any, you know, plus or minus news on New Glenn. But I do think people I read the comments and people are pretty negative on New Glenn. I'm always surprised. It's the largest operational rocket currently in the US market. You know, key point, operational. Starship is not. And so I'm always amazed at people negative on New Glenn when it actually already did the thing and Starship has not. So I'm pretty optimistic that these guys are going to get to orbit again. And it's always useful to remember that Whether they can land the booster is a Blue Origin problem. Now, the cargo provider's problem, and they have a bunch of boosters in production and they will figure it out. They've been able to land Glenn Shepard, um, or New Glenn, or where's it go? Shepard, New Shepard. The little one that looks like a phallic symbol. They've been able to land the, we'll call it the little peepee. Many times, and so these guys are able to do it, and I am convinced that they will be able to land New Glenn, which is then the reusability component, which just allows Bezos to not blow a lot of money. But a cargo provider is not going to be paying a higher price for New Glenn because their next best alternative is SpaceX, and so. New Glenn, if they want to have any cargoes, is going to have to be price competitive with rockets that can be reused. And if New Glenn cannot be reused, again, that is a Jeff Bezos problem. That is not an ASTS problem. And so we'll all be looking really closely to see how this launch goes because it really just adds more competitive pressure to the launch market. But my belief is that we're going to have ample capacity from SpaceX and maybe that's what we're going to learn. Tomorrow is that we got some more capacity with SpaceX. But I think that this is really just going to be a buyer's market for people that have cargoes really into 2026 and beyond. And the launch questions that people might have, I think will dissipate. So that's what I have. A big emotional swing this week. I, again, I was really getting pretty beat up and depressed. with the way the stock was trading this week. And, you know, I kind of would post that too, but it's always useful. Like when I start to get really dejected, that really is usually the time when the bottom is coming in. And it's useful to take a zoom out and remind yourself of the market opportunity and just really the path to a trillion-dollar company, which is a goal that Maybe they'll hit, maybe they won't. But the key thing is to figure out, does your company have a trillion-dollar opportunity that they can capture? You know, so you look at these guys, uh, Duolingo, Antonio Lennox has certainly been capturing my attention lately. Um, not always for the best reasons, but, you know, his belief, just to give an analog, is that Duolingo is going to revolutionize and own global education. Well, when I thought about that, I don't know why he's wrong. You know, why doesn't it make sense that an AI-powered learning platform is what schools should use for, for kids? I'm not saying you replace classes, but for kids to be whacking away at for their Spanish lessons, for example, and math lessons versus McGraw-Hill provided materials. I don't know. I use Duolingo. I think it's I've learned more on Duolingo than I did in school. So then it comes down to go-to-market. And that's where Duolingo got its butt handed to it this week is it had its user growth slow. So then that goes back to, uh, you might have a great product, but people are worried about the impact of AI and slowing user growth would be a pretty clear-cut sign. Either you've capped out your market or AI Is chipping into it. Well, that's not good. And so while there might be a view that there's a trillion-dollar opportunity there, the ability to realize it has some pretty obvious headwinds you have to confront and get past. With AST SpaceMobile, the obvious headwind to our trillion-dollar outcome is TAM. If it's just for dead zones and you have really low attach rates and people won't pay for it, Then this is not going to be a trillion dollar company. If this is a ubiquitous service that everyone wants because it's like house insurance and the attach rates are really high and you're selling your capacity many times over because you're selling it to government, military, consumer, um, B2B, and then, oh, by the way, you create markets that no one had ever contemplated, such as IoT markets and autonomous driving markets because they all demand this ubiquitous always-on service. And then the market's way bigger than you ever contemplated. Then all of a sudden, sort of your path to a trillion-dollar market opportunity is sitting right in front of you. And so in the past week, you know, I look at this and go, well, this, you know, this, we don't know if it's IRIS II, but this European thing is nuts. You know, this is, you know, I talked about IRIS II for a while, but you know, you see the Vodafone SAT node. structure, and, you know, they're kind of thinking about that, but I thought Europe was too far into this and, and was doomed to fail. But all of a sudden for this to now be in the, you know, realistic opportunities for ASTS SpaceMobile, it just adds so much potential enterprise value that was never contemplated. You know, people 5 years ago like us when we're making this investment, Would have never contemplated that we'd be seriously having a conversation about whether or not we won the deal to provide the sovereign European system, whether we actually win it or not. We would have never even been bold enough to suggest such a thing. We would have never contemplated Golden Dome, which by the way, now that the government's reopened, we can start speculating on that. Yeah. Which. which we love to do. So there's a lot of crazy market developments that you need to always take stock of because there's, I'm just trying to think of another good analog. Um, you know, Nvidia maybe being the best one, you know, start small gaming chips, you know, where's the TAM? Crypto. Ah, let's just crypto. Where's the TAM? And then, you know, same technology allows them to line up for the, for the motherlode of AI. You're, you want to look for those things. You don't want to have a static view of a stock. that's where you can make a lot of mistakes, is an investor will kind of learn it, get arrogant sort of in their knowledge and think they kind of understand it. And then even if they're bullish, ironically, they have kind of a target price in their head. And this is an easy thing to fall to. And I have target prices in my head that I don't necessarily update dynamically. And there's also some prices where it's like, well, I kind of just like feel like that's where I kind of told myself I would diversify a little bit. You know, that's all fair. Fair. But when things are really inflecting to the upside because they start to create markets and become platforms, that's where people can exit for one reason or other and then look back and go, oh my God, I literally sold when it was de-risked and had the most upside. And so just always be cognizant of that. I'm not telling anyone to change the plan they might've otherwise had, but make sure you keep having mental flexibility. To adjust in these really quick-moving markets when something is moving beyond a perceived niche solution and never lose sight. And I forget who said this, but it, you know, kind of, this is VC advice passed back over the ages. If you want to have a killer company, you kind of think of a house and you need something that's going to win in the foyer. Well, that's the whole house, but you need to be just dominant in that first room of the house when you walk in, like the mudroom. You need to just blow the socks off the mudroom because if you don't do that, you're not getting anywhere near the living room because why would you? You were just, you know, you were mid at the beginning. And so if you win the foyer of the house, all of a sudden then you've got a right to go into the kitchen, into the family room, into the living room, you know, then upstairs and then take the bedrooms and, And so that's what's exciting when you look at some of these companies is all of a sudden they just dominate what's perceived as a small market. And then from that, use it as a launching point to take on adjacent markets, create new markets, win big markets. And that's where you can have something that people always thought of as, well, maybe best case is a $20 billion company. And they look back in a couple of years and they go, holy crap, how did this become a $200 billion company? Or a trillion-dollar company. So with that, I will let people stew on these existential questions of life. And I'm excited about tomorrow's earnings call. You know, I'm sure, I think as Katsy kind of already said, you know, with all these things at all these companies at this stage, there's always going to be some good and some bad. And I mean, it's just hard to really shake out production, but I think that the market will be really relieved if They continue to show this path to really getting ramp production by Q, you know, let's just say Q1 2026, which would be a little bit of a slip. But at this point, we're already done with the year effectively. And as long as people see that the thesis will really take form in 2026, I think people are going to increasingly just confirm the inevitability of what's happening here. So thanks for joining me. I really appreciate it. And I look forward to catching everyone next Sunday. Same, same time, same place. Have a great night.
[00:45:46] Speaker A: Thanks for listening to the AST SpaceMobile Podcast. If you enjoyed this episode and you'd like to help support the podcast, please share it with others, post about it on social media, or leave a rating and review.
[00:45:59] Speaker B: To catch all the latest news about AST SpaceMobile, make sure We're doing something very, very big, and I think with this technology we can really affect a billion lives. AST SpaceMobile is the only company that has proven technology to deliver cellular broadband connectivity directly from space to the everyday smartphone. People will just basically turn their phone on, and be seamless regardless of where you are. We don't want the user even to know that it's connected by satellite. Our role is to bring this into reality, always in partnership with the MMOs.
[00:46:44] Speaker A: Listen.
[00:46:47] Speaker B: Mmm, waffles.