AST SpaceMobile: Japan Files 136-Satellite Constellation at ITU

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[00:00:24] Speaker B: Hey everyone, thanks for joining. Oops, let me pull this mic closer. Uh, hope everyone had a great long holiday weekend. For those of us who live in the US, uh, it was Labor Day weekend. And so the last 2 weeks it's been kind of a mad scramble for our family because the kids are— I live in New York, and so the kids are going back to school this week, and that was a matter of, um, Doing final, you know, end of summer things and then school supply shopping and trying to figure out schedules, which if you have kids in New York, it's like doing— playing a game of Tetris trying to figure out all their after-school enrichment, sports, whatever activities. But yeah, I'm looking forward to the kids going back to school. I know, funny enough, my sister was saying, hey, I guess it's kind of sad that the kids are going back to school. You know, you're gonna lose the freedom of summer. And I laughed at her. I was like, what are you talking about? It's when the kids are at school, that's freedom. 'Cause we don't have to be entertaining them or hanging out. I mean, obviously I love hanging out with the kids, but it takes a lot of time. And when they're at school and you're in, you know, you have a process and a routine, it makes life for the adults much easier. But anyway, I just wanted to fire up a space and just catch up. It's been quite some time. since I last did one. And I know Cook did one last evening, which he covered quite a few important news items. But I did want to talk about developments over the weekend and how the picture is just becoming absolutely clear for AST SpaceMobile. And today I wanted to— the keyword that I wanted to talk about is sovereignty. And this is going to be a recurring theme, I think, for the coming months. Whether that's in relation to communications, launch, anything in space, right? Because I think space obviously is becoming more of a contested arena, and it looks like countries, not only companies, but also countries are viewing it as a strategic necessity, right? And so this is where the whole sovereignty Word and an overarching theme comes into play. But over the weekend, we saw a number of news items which again emphasize this point. And well, actually, I take that back—not news, but things that the space mob were able to uncover in terms of due diligence. But you know, at a high level, and I'll talk about these in a little more detail, but in Japan, we we learned that the the equivalent of Japan's FCC, MIC. They filed with the ITU on behalf of what is essentially Rakuten and AST SpaceMobile. They didn't refer to them because obviously the 2 partners don't have a formal JV, completely formal, that JV has not gotten definitive just yet. But the MIC did file with the ITU for a 136-satellite constellation. And obviously the name that they use for the satellite, which is J-Bluebird, J stands for the J-LEO project, and Bluebird is obviously AST SpaceMobile Bluebird satellites. But they filed that over the weekend, or sorry, they filed that on September 4th. And so I think that came as a big surprise to a lot of folks, 'cause obviously, you know, Rocket Lab has won the J-LEO project, and no one really knew what the scale was. Obviously, $1 billion contributed on behalf of the Japanese government, I think is just a start. There'll be more funding after that. But the partners are supposed to also put side-by-side capital of $1 billion. I've talked about the idea in the past where once you have $1 billion of government funding and that's secured, you can actually go out to the private markets and raise debt alongside that. And so it requires very little, if any, equity investment from the partners. And so that $1 billion actually gets multiplied And will they get to 136 satellites? It's unclear at this point. I mean, but you obviously put forward the far end or what you think you're going to need with flexibility towards the ITU or with regulators, and then you go back from there. And so 136, some people questioned over the weekend, why would Japan— actually, I'm going into details. Let me go on to the other headlines, and then I'll come back to this. So we had that filing from the MIC, and obviously Japan over the weekend talked about the idea of building a sovereign constellation where you have AI edge computing communications. There's going to be multiple players involved, and whether that's commercial players, but also defense players. But Japan is looking to build out something similar to a Golden Dome type network, right, where they want to have defensive capabilities. Obviously, their big partner— sorry, big potential adversary China is just across the ocean, and then of course North Korea as well. And so building out defense capabilities is important, and I think AST with Rakuten are going to become a big part of this multi-layer communications network that they were talking about. And of course, around that is the word sovereignty, where Japan wants the ability to build and launch and control that capability domestically. They don't want to rely on others. I think everybody— the big eye-opening exercise that everybody— that basically snapped everyone to attention globally was the fact that when the Russia-Ukraine conflict happened, you had Elon Musk who, depending on how he felt who was in the right or wrong, or whether he wanted his company to be cast in a certain way, he would turn on or turn off capabilities of Starlink. That was not only on behalf of Ukraine, but also Russia. I think that's made people really think through, okay, do I need to own my own capability, or is it going to be— am I going to rely on the whims of a billionaire who might have other motives or objectives? If you look at Starlink's architecture, obviously that's something that's wholly owned by Starlink. They control everything. That puts into question do people want to rely on that? That's even a question that the US government has asked itself, where when Elon and Trump had their tiff with one another, and Elon had claimed that Trump was part of the Jeffrey Epstein network. I mean, it's interesting. Maybe some of us have forgotten all this, but they really went after each other, and Elon said some pretty tough things, which salacious things, which we all know that Trump, he's not a person who forgives. He remembers stuff. And so I think clearly the US, from that experience where Elon specifically said, hey, we're not gonna help out with the space station, and he threatened to pull a launch, that taught the US too, that you can't be reliant on just one provider here, even if you are aligned. And especially, I think, with Elon Musk, and I'll talk a bit more about it later, when you have a vertically integrated behemoth, which has its fingers in every business, whether that's on the Tesla side, whether it's The Boring Company for SpaceX, and that's expanding rapidly, where you have this monolith that's vertically integrated, that introduces a whole host of problems for governments. Because at some point, does that entity, and not just from an antitrust point of view, but does that entity become too powerful? Does it have too much influence where companies, governments, everyone becomes reliant on it? And so it's not just space, it's not just launch, it's AI data centers, it's AI. There's a whole host of potential issues here, and that extends to other markets where companies are going to be, and we're seeing this in spades, companies are going to be loath to integrate or be reliant on that vertically integrated monolithic company, which is, we'll call it Elon Musk company. But yeah, so going on to the next few items, Europe, there was an article out of Bloomberg which talked about the Big 4 MNOs out of Europe. Looking to form a venture to counter Starlink, and and of course this is not news to us because that venture is Satco Europe Satellite Connect, and currently it has as part of Satellite Connect formally you've got Vodafone, Telefonica, Orange, and then a whole host of other MNOs, which that does not currently include Deutsche Bank Deutsche Telekom. However, in the press release, I think it was August 6th, AST did disclose that Deutsche Telekom has now become a testing partner with AST. And so I think the ownership mix of that venture is gonna change quite a bit. And ultimately what that looks like, we'll see. But it's interesting. I mean, everything that we've kind of predicted that Europe would be looking for a sovereign solution to counter Starlink and to have their own independence, AST was ahead of the game. They formed Satellite Connect last year and viewed sovereignty as a critical issue, and now they're well positioned for it. It's not just from a business model perspective, but architecture too. You've got Starlink and Amazon, who the path that they're pursuing, not only from a business model, but from an architectural standpoint, is diametrically opposed to what MNOs, and countries desire. And so what do I mean by that? Well, the Starlink network operates as an independent constellation. Carriers who decide to work with Starlink, their users actually go and roam onto that network. And so for all intents and purposes, Starlink owns that customer while it's— and the data, it's on Starlink's network. It's not the MNOs anymore because of the inter-satellite links. data that's generated in Germany might actually float across to Spain, or it might float to the US, depending on how things are routed. And so that's where you've got countries and MNOs, that gives them pause, right? Because they want to own the customer. They want to have the constellation integrated into their network. They want to be able to do billing, support, all that stuff. And they want the traffic to originate in their country and they want it to land in the country. So that's where the bent pipe architecture comes into play, but that's not what Starlink is pursuing and that's not what Amazon is pursuing. They want to own the customer. They want to own the data, countries, sovereignty, M&Os be damned. So it's kind of interesting because the market is shifting and moving towards sovereignty, but these 2 players, in particular Starlink, is locked in. They're locked into their proprietary system. Amazon still has the ability to course correct because they haven't launched a direct-to-device constellation. So when they announced their direct-to-device venture, they talked about using the same exact architecture as Starlink, but who knows, maybe that'll change. For those that don't know, Globalstar actually is a bent pipe architecture. Obviously it's very old. But who knows, maybe Amazon will switch courses. But knowing their business model of wanting to own the customer and monetizing all the data, I don't see them doing something similar to AST, right? And so that's a really important point because, I mean, the other thing I have to point— the other thing that came out today was the fact that the UK is now putting forward a £7.8 billion Pound initiative around space where they are looking for sovereign capabilities, right? So doing development work themselves. In particular, if you go into the release and look at some of the information that is behind that release, they're actually looking to build 5G, 6G direct-to-device network, right? And leverage commercial constellations. And so there even, you've got Vodafone, which just merged with Three in the UK. Both are working with AST SpaceMobile. If sovereignty's an issue, then that leaves Starlink out of it. And so whether it's by luck or by the timing, the company is well positioned. And that's why I wrote earlier today that I've never been as bullish as I am today, because the company is at the intersection of this critical theme, which is sovereignty, connectivity, whether it's edge computing, defense capabilities, you name it. I mean, we've talked about, for example, the fact that AST, all the MNOs that they've signed on, they've got 3 billion subscribers, but we're not even counting all the IoT devices, whether it's It's drones, robots, any number of devices that you want to connect. I think MNOs are, when they project out their connected devices, I think IoT devices are going to outnumber subscribers by, I don't know, 3, 4 to 1. Those devices, by the way, some of them will need full connectivity no matter where they are, whether it's an autonomous car or a drone, Because obviously you can't go into dead spots and not have coverage, especially when it comes to safety regulations. So having 100% coverage nationwide or in any region is going to be absolutely critical. But yeah, so going back to what I was saying before, yeah, it's interesting. I mean, we cannot be in a better strategic position than now. Every week it seems that we're seeing more announcements from countries and blocks of countries announcing that they need to have sovereign communications and defense capabilities, and that's something that Starlink cannot offer. And so, I mean, maybe in the future Starlink might build constellations for sovereign nations. I mean, they've I guess they're kind of doing that with Starshield with the US. But aside from that, I mean, it's kind of hard to walk back the idea that Starlink Mobile is looking to compete with every MNO globally. So I've talked about this dynamic where because Starlink has pursued global spectrum and they want to compete with the MNOs, and for the few that have been suckered into working with them, God bless, they're going to get They're working on their own demise, but for foreign regulators, it's going to be a really tough pill to swallow to enable Starlink to come into your country and compete directly with your national champions. That's where this whole idea of, for example, the 2 GHz spectrum reallocation in Europe, people aren't talking about this just yet, but obviously Starlink is angling to get a 10 by 10 MHz block. But there's no guarantee that they'll get that, right? And that, by the way, currently the current holders are EchoStar and Telesat— sorry, EchoStar and Viasat. And so the expectation is that, well, EchoStar will just get a 10 by 10 allocation down from their 15 by 15. But, and I'll talk about it in a bit, I think there's actually a chance where AST and Satellite Connect Europe each get independent 10 by 10 blocks. which I don't think the market's pricing in. But anyway, let's move on. So going back to what I was saying before about the MIC, Japan, they filed 136 satellite constellation at the ITU. This is important for global coordination. If you're looking to utilize the constellation outside of Japan, this is really important. And there were some details about what inclination and what planes that they'll be that constellation will be serving. But clearly, this constellation that Rakuten and AST is putting together for Japan is bigger. It's much bigger than Japan. So when we say they're big in Japan, no, this is even bigger than Japan. And so this new JV is gonna be providing coverage not only for Japan, but when the satellites go outside of Japan, they will become part of the federated constellation for AST. And so As part of that, I would assume some of the economics of that dedicated— the kill switch is in Japan, it's controlled in Japan. Part of the economics will go back to the JV and go back to Japan, the Japanese coffers. But the great thing is that Japan is paying for this constellation, and then it can also be utilized under the federated constellation. And so a similar model was when I think it was Planet Labs had worked with a Japanese company, and the trade-offs there was that Japan got dedicated Earth observation in Japan, but outside of Japan, Planet Labs was able to monetize the use ex-Japan. And as part of that transaction, the Japanese did pay for the deployment of those, I think it was Pelican Earth observation satellites, but then Again, as part of the deal, Planet was able to monetize the satellites outside of Japan. So I think that's part of it. We're going to see a bit more of that. So whether that's Japan, but also the European venture will own its own satellites and they will be utilized not only in Europe, but they can be leveraged outside of Europe. And so we're going to see more and more of that. And so what does that mean for AST's business model? Well, the revenue splits, is it going to be 50/50? Still unclear. Maybe it becomes 30/70 or 40/60, but I think it's important to note, from an economic standpoint, if you've got 30% of the market and it's split 50/50, you're going to be pretty damn happy. But if you get 100% of a market, not just a third, but 100% of an entire market, and your split is 30/70, meaning you get 30%, you're going to be ecstatic. Because your percentage is smaller, but the pie is way bigger. And you've locked in the entire market, which is what's happening here in the US and what we're seeing unfolding in Europe, and what's not now, but could unfold in Japan. When you see KDDI, NTT Docomo, and SoftBank, at some point, if Rakuten allows them, they start to work out a deal with the JV, the RAS JV, instead of with Starlink. And so, yeah, that's, I mean, if the endgame is that, right? And it looks like that's what it is because Starlink initially tried to play that they were trying to work in partnership with MNOs, but then once the IPO came and they had to really put—
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[00:21:18] Speaker B: Justify their valuation, which a big portion of SpaceX is Starlink. Then they said, hey, you know what? We're not just doing internet to home and business. We're actually focusing on creating a new mobile network operator that's going to compete globally, which to new investors, that's a massive TAM. So that affords you a high valuation multiple and you're able to raise money, additional money, and go pursue spectrum transactions and the like. But on the flip side, what that statement said in the market, the declaration of competition with all MNOs, it basically forced all of them. I mean, we already had, we meaning AST, already had 60 global network operators working with us, but that just pushed them even further into and increased the strategic importance of working with AST. And so yeah, it's great that we're seeing kind of all the dominoes, well, the puzzle pieces falling into place where we've been talking about this for, I guess, years now, but now it's coming into focus. And I think, and I've mentioned this before, back in September of 2022, when Starlink announced that they were getting into this market, I remember feeling pretty down about it. But If you had told me back then that Starlink entering into the market brought much more awareness and then accelerated, actually accelerated adoption of AST SpaceMobile as a strategic partner for MNOs, I would've been surprised. I couldn't have imagined where we ended up today and where we will be in, call it, 3, 4, or 5 years. But Starlink, Mobile has been the best thing to ever happen to AST. I can say that with full confidence because I think Scott mentioned this on the call before when he was talking about Sovereign Constellations, where he's like, everybody in the G20 is talking to us. That's a really strong statement. You're telling me that everyone in the G20 wants to have a Sovereign Constellation to varying degrees, right? They're willing to pay for it, and you're at the pole position because When people talk about sovereignty, the first name that does not come to mind is SpaceX. SpaceX is focused on itself, obviously, and it's a successful business. Starlink has been amazing, and so has their launch business, and they're putting their fingers into every single thing out there, it seems. But when it comes to their ambitions, sovereignty is not at the top of the list. It's actually at the bottom. Right? And so, I mean, we've seen this at the FCC and at the European Union where they are the biggest bullies from a regulatory standpoint. If you're an existing company that's competing with them, they resort to lawfare to try to take you out, right? They did that with EchoStar where they threatened to— at the FCC, they tried to threaten that they wanted their spectrum and they used lawfare Probably to some extent to pressure EchoStar finally into selling to them. And so if on a scale of 1 to 10, sovereignty being 10 and 1 being having interests that are well beyond sovereignty, SpaceX is probably at 0 or 1. But going back to what I was saying about Japan, I know some people have asked, and by the way, if you have questions or comments, feel free to drop them and I'll try to read them at the end of this space. But some people have asked, well, why is there no PR? It seems like Space Mob is the only one who's putting out news and the company is asleep. Like, they should be putting out more. Well, some of these things are not ripe, right? And so when it comes to the joint venture, and we've talked about this, I mean, on the one hand, AST did disclose for the last quarter and also in their latest financing, they did talk about the joint venture between Rakuten and AST for the J-LEO project. So they already have a definitive commercial agreement for direct-to-device service in Japan, but then this J-LEO project is much bigger, right? It's government-sponsored, it's got a billion of funding. That joint venture is still being negotiated, so it hasn't been formalized yet, right? And so that's going to take some time, and when it does get formalized, then they will PR it. And then for these regulatory filings, I mean, companies typically are not putting out PR. I mean, these are actually below-the-radar regulatory work that companies are doing, and you don't PR them. They're not material. They are part of a process, and when the end product, which is the formalization of the joint venture and maybe a big PR from the Japanese government, yeah, you would do it then. But These are just regulatory steps, and we just happen, whether it's through my research or others, we just happen to be lucky that we're able to pull this stuff out and share it with the community. And this is stuff that hedge funds do too. When I was working in the hedge fund industry, I would follow the FCC docket, the DOJ, FTC. I would talk to experts who are following cases. And so these are all things, depending on which sector you're in, there's various regulators, you would be doing this work and you would keep it to yourself. Whereas for retail investors like us, we actually share the research and it's actually quite heartening to see Berenberg Research, for example, who initiated coverage on AST last week. It seems like they're— I mean, I can't say definitively, but it seems like they're leveraging some of our research and putting out great updated notes, which I put out 2 today. one on the JLEO project and then also on the European venture. But yeah, that's why we're not gonna see PR from AST. And some of this, by the way, is sensitive, right? So some of the things can be working in the background that you may not want competitors to know what's going on. And so there's no need to, or there's no desire to formally PR some of this stuff until things become more baked and it's time to do it. But, um, and, you know, I think also part of the— part of this too is the fact that we've just finished summer, people are away, and so you might want to hold some of your PR until, um, the time when Wall Street gets back, which is this week. And so I think my guess is you'll probably see the company being more active, uh, with some, some updates. But, um, let's see. So moving on, uh, I did want to talk about the Bloomberg, uh, report. So, uh, on Friday after the close, Bloomberg— no, sorry, was it Friday? Let me just look at the headline here. Sorry, it was yesterday. So what am I saying? Bloomberg did report a— they had this article talking about Europeans, the top 4 European carriers in discussions around a venture. And so the top 4 are Vodafone, Deutsche Telekom, Orange, and Telefónica. For those that don't know, we've been working closely with Vodafone, Orange, and Telefonica. And then in early August, it was disclosed that AST started testing and integration work with Deutsche Telekom, which, hint hint, is the stuff you do before definitive agreement. And so in this Bloomberg article, it was reported that those 4 companies are in the talks to form a joint venture to pursue 2 GHz MSS spectrum to specifically counter Starlink. and to offer service. And so, as I mentioned before, there is currently 30 by 30 megahertz of 2 gigahertz S-band spectrum that's available in Europe. The 2 license holders are EchoStar and Viasat, and they have those licenses which expire in May of 2027. And then those licenses get put up for a process to get reallocated. And so the current thinking behind the EU is that there will be 3 10 by 10 blocks, 10 uplink, 10 hertz of uplink and 10 megahertz of downlink. There's gonna be 3 blocks. One block is gonna be dedicated to IRIS-2, which is the European solution to Starlink and maybe some direct-to-device connectivity. That's a consortium of a few European aerospace players. However, the MNOs, if you were to believe what they say, which I have no reason to believe why they'd be lying, some of the recent press over the last year has been them commenting very skeptically that IRIS-2 will ever be a viable player. But we'll see. But out of that process, so there's going to be an allocation for Iris 2. There's going to be an allocation of 10x10 to a European player, meaning a player that's based in Europe and has over 50% ownership in Europe. And so we did see an article from Bloomberg, I guess it was a few weeks ago, where it suggested that Satellite Connect Europe, which is the JV between Vodafone and AST SafeMobile, that they were well-positioned to receive or win that allocation. However, with today's article, it seems clear that now post-Elon and SpaceX going public and talking about competing with the MNOs, it looks like Deutsche Telekom is the new player in Satellite Connect Europe. So remember that Orange and Telefónica are also part of Satellite Connect Europe, but now it seems like Deutsche Telekom is coming over. And so they're probably looking to renegotiate that, or not renegotiate it, but make it in such a way that it's economically viable and attractive for all the players involved. And so this is really big news because there's not— well, obviously, this venture is not going to use Starlink because they're forming it to counter Starlink. But then also, all the players are currently working with AST. And so from some conversations, brief conversations I had with the company, it seems like AST is the partner, or not seems like it, AST is a partner that is working with these guys. And so that's the interesting, you know, now we've talked about awareness and the fact that most people don't even know about AST. I mean, what's funny is this Bloomberg article, when it came out, it did mention AST at the end, but then when you looked at Bloomberg, AST was not included, or you look under the current newsfeed for AST and the article didn't even show up. It actually took me to reach out to Bloomberg help desk and say, hey, your journalist wrote this article and talked about AST, but it's not even under the AST ticker when you search in Bloomberg Terminal. I think it's important here where awareness is going to spread because this is a really big deal. AST working with the top carriers, and I talked about this idea of getting 100% market share, That's looking increasingly more like a reality. And so those are the big 4. There's also, and some people might ask if you understand the European markets, well, what about Telecom Italia? What happened to them? Well, I would just point out that Telecom Italia TIM Brazil, so their Brazilian subsidiary, already works with AST. It's controlled by Telecom Italia. And so I think you can pretty much assume that AST is talking to Telecom Italia, and perhaps they haven't got there on a deal yet, but eventually they will. So Big 4, Big 5, I think they'll all be working with AST. And so this article is very explicit in that they are forming this venture to counter Starlink. And so it's almost like the movie Lord of War. It's like the arms dealer is AST, and they're going to be providing the satellites, the service around it, the infrastructure, and then it's going to be a sovereign solution for Europe, which then when it's outside of Europe, it can be used as part of the federated network. So again, this kind of goes back to the example— actually, this mirrors what's happening in the US around the telecom JV, where US— sorry, yeah, T-Mobile is being added to Verizon and AT&T, are working with AST. And so you're seeing basically the same thing happening in Europe where people see Starlink as a threat and the last holdout, Deutsche Telekom, is like, hey, you know what? Hey guys, I'm sorry. I picked the wrong guys. I picked Starlink before. I want to work with you and AST. And so that's the path that they're pursuing. And so it's kind of funny because when you look at mainstream media, When they report, and research analysts, when they report on the telecom JV here in the US, which is AT&T, Verizon, and T-Mobile, research reports, it's all about Starlink being a huge competitive threat, although not a near-term threat. It's going to take many years. And then of course, they've got to figure out their low-band spectrum solution to compete. But the research reports that I've seen talk about AT&T and Verizon being in a tough spot, and there's no talk about the counter. What are they doing? All the reports are written like, these guys are in big trouble competitively, not near-term, but longer-term, because they've got to compete against SpaceX, and then end of story. Their multiples will get degraded, they might lose subs, but there's no discussion of the fact that, oh, they actually are not working with Starlink because they have something to counter them. this player who offers true broadband, can utilize low-band spectrum, has been working with them for years, actually created the category. No one talks about that. But the same thing is going to happen in Europe, right, where that's unfolding. And I think based off of Space Mob due diligence and discussion, the same thing is unfolding in Brazil, where AST has received a 10 by 10 megahertz allocation of S-band. We're already working with the top carriers in Brazil. Maybe there becomes a joint venture, and again, maybe it's to counter Starlink. So this is a recurring theme. This is why I talk about sovereignty being absolutely critical, where Starlink could talk a big game, but their architecture is just diametrically opposed to what the MNOs want, and ultimately what the countries want. So the market is going to the right, and they're locked in to the path on the left and they continue to go down it. Not to say that they won't be successful. I'm sure they will be to a degree, but for a company like AST with a $25 billion market cap and a tremendous amount of opportunity ahead of it, as the de facto technology provider, especially to compete against Starlink, that's a really good place to be. And so what is that worth in terms of enterprise value you can generate over the next 5, 10, 20 years? Yeah, it's very significant. So yeah, so we're seeing that unfold in Europe, which is unfolding here in the US. No one has really put a number around it. I think Berenberg talked about how their current estimates don't into account Deutsche Telekom. However, it was interesting in their initiation of coverage report. By the way, my hat's off to Berenberg. This research analyst totally gets the story. He understands the strategic importance of AST to MNOs and to countries. It's kind of weird to say that, but AST is now important to countries. Unlike other research analyst reports that I read where they talk about Starlink being a competitive issue for carriers and that They also assume that carriers will just work with Starlink anyway. This guy understands the business model, where AST is a strategic partner of choice and that the market is heading their way. So in one of the reports, which I thought was really cool, he does talk about the change to the thesis if T-Mobile were to select AST. So I tweeted about this earlier and I think SPAC Bobby did as well. Here, they talk about a base case scenario, or he talks about a base case scenario where T-Mobile, if they were to select AST for direct-to-device satellite operations, that would bring an additional $1.1 billion of EBITDA in 2030. So if you apply a conservative 15 times EBITDA multiple, which I'd argue it should be higher than that, that's roughly about $29 per share. So it's about 50% of the current company's stock price, which is insane. And that's just one carrier. Obviously T-Mobile is a big carrier and a very profitable one at that, but that's just one carrier in one market. And so if you kind of— let's add Deutsche Telekom or we add a few carriers here and there, it all starts to add up quite significantly. And so I think I think the market is underestimating. I mean, clearly the market doesn't believe that T-Mobile is going to join AST nor Deutsche Telekom, but sometimes we joke, is it priced in? I don't think it is. I don't think either one are priced in, not even close. And so if you're telling me that the market is pricing that AST is going to get T-Mobile on its side and that $29 per share is already priced in, then you're out of your mind. But Anyway, but I did, moving on, I did want to talk about, or I guess I have been talking about Berenberg Research. I think hopefully this guy, I mean, he seems to be very up to date on current events and understands the business well. And so yeah, it's just refreshing to see someone who actually understands the story and is writing thoughtfully about it. Because I think unlike other reports that I've seen, I don't think anyone truly grasps the strategic implications of what AST means for the MNOs. and how Starlink and SpaceX has completely alienated them. Not only, again, not just the MNOs, but countries as well. Let's see. So I did— I think that's most of the stuff that I wanted to cover. I don't have any new updates on Bluebird's 14 through 16 shipment just yet, but we do know that there's probably 4 to 5 shipping boxes in Midland. And so once the next batches— my guess is that it's not going to be one batch that gets completed, but it's going to be like 2 batches that get completed in short order where they'll need more boxes than just 3 to make sure that they get to launch on time. But that's, you know, there's no new update there, but I think we're probably going to hear something pretty soon. And as I mentioned before, I think it's important that during August, during this brutal drawdown, which Cook talked about yesterday how it's been rough to go through this drawdown. And I just remind people that someone last night or today had said, well, I think AST stock price has suffered because they haven't shipped their latest batch of satellites. And then my response was, well, I guess the entire space sector has been waiting for us to ship our satellites because everything is down a ton. It's been the momentum factor that's gotten completely squashed. I think maybe perhaps we're seeing a bit of a turnaround in that today. But yeah, man, this stuff, it takes time. I think for people who obsess about the things that are happening near-term, just zoom out. I mean, think about all the things that just happened over the weekend in regards to Japan and Europe. That's kind of the big picture that you have to focus on. Now, obviously, We want to see them ship more satellites, launch more satellites, but I think you've got to also take a bit of— the company has executed and it's just a matter of time. Like we saw, Adrianas Izneros, she bought a big chunk of stock last week. This is the board member that has the longest time with Abel. I think they're personal friends. Her father was basically one of the seed investors of the company. So I think that purchase is just a showing of confidence of what's on the come. It was kind of funny, somebody had— the market will— people always want company insiders to buy stock, and then once they buy stock, then you have those people or some subset of them and say, well, oh my God, if they bought stock, that means that there's nothing positive that's coming because it would be material nonpublic information. So you're damned if you do or damned if you don't. But I would just say that there's various levels of materiality. So you could be on the cusp of doing a lot of positive things and the board may not be privy to those, or they may not rise to a level of materiality. But if you're talking about like, oh yeah, the company's in the process of selling itself and then board of directors buy stock ahead of an announcement, then yeah, they can't do that. But if you're having strategic discussions with Deutsche Telekom and they are not at a point of reaching materiality, like they're not going to be announcing it this week, but you have high confidence, but they could be announced in 2 to 3 weeks, then that would be okay to buy stock because it's not to a point of materiality where you have a definitive agreement that just is about to be signed. It could be in negotiations, and you feel pretty good about it, and you can buy stock. And then of course, those negotiations could go south, and then it's not as if you had inside information at that point. But I think zooming out, having a board member like Adriana who understands the business, is close with management for her to buy stock, and it wasn't programmatic. It wasn't like a predetermined plan. She just bought in the open market. I think that should tell you something in terms of her confidence and where she sees value in the stock and the prospects going forward. So yeah, just keep that in mind. But as I was saying before, August is over. Now people, institutions, portfolio managers, analysts, they're all back to work. And so August is in general kind of a slow month, but now that we're back, I would expect, and I would think, I think the company is going to have some additional announcements, whether that's related to shipping for launch, any number of whether it's JLEO, European venture, maybe some progress on T-Mobile, grain management comes to mind. Also, Scott talked about the ability to talk about the latest military awards, which we had, what, 3 awards for $125 million over the course of a year, which I did talk about this before in a previous space, but when the company does talk about these awards and they disclose them, first of all, the company did not PR them. They just talked about it in the Q2 call. This is their culture, their DNA. They tend to be somewhat more conservative. They don't PR all these different product things or wins. They'll talk about it once it reaches a level of materiality. So when talking about those 3 awards, they didn't talk about the potential ceilings or options. They just said, well, we got these 3. It's worth $125 million. and it's over the next year, right? But I do expect them to provide more details around those, which Scott alluded to on the Q2 call. So hopefully we'll get some more information about that. That's kind of mostly what I had. Oh, also something to keep in mind, the US M&Os. And so I put these on my calendar. So on Wednesday, you've got Verizon, T-Mobile, who are speaking at Citigroup, and then Verizon speaking at Goldman Sachs later in the afternoon. And then on Thursday, AT&T speaking at Citi, then T-Mobile will be— sorry, yeah, T-Mobile will be at Goldman, and then AT&T's at Bank of America. So we might hear something from them in regards to their work with AST or how they're thinking about Starlink competitive threat. I mean, It'll depend if some of the analysts there ask them the question, which I assume they will, because on every recent earnings call, it's pretty much like the only thing, or not the only thing, but it's definitely the topic du jour of research analysts. How are you viewing satellite connectivity and what is Starlink? How are you going to counter them? And so hopefully we'll hear some additional color from those guys on Wednesday and Thursday, which starts tomorrow. Let's see here. That's pretty much all I had. I did want to talk about, I guess in closing, and then I'll see if there's any questions or comments. I did want to talk about noise, right? And so during this latest drawdown, there's been a lot of noise from people, whether it's trolls or haters or whoever it is, right? People who want to sow doubt. And I did see some counters where someone was saying, if you want to be a good investor, you shouldn't block or mute people because then you won't have the other side of things. And that's a fine— if that's how you view investing, then that's fine. I get it. And that makes some sense to a degree. But for people who are just trolls or looking to put out rage bait or engagement bait, For me personally, and this is just me, but I was a professional investor for more than a decade. For me personally, I can handle uncertainty, volatility, risk. When people tend to be pretty down, whether it's AST or other stocks, especially with growth companies, you have an inevitable drawdown. I'm able to compartmentalize it and be okay with it because in my mind, it's like, okay, yeah, this sucks, but clinically, looking at risk-reward and where we are in development and all those things, like has anything changed competitively? I'm able to ride that pretty well. And so you don't see me going out on X and talking about being stressed and like, oh, the world is ending and it's all the company's fault, that type of thing. If anything, and I've talked about this before, Yeah, I'm a perma-bull on AST. I've never hidden that fact. So I'm going to put forward that narrative because that's something that I've done for the last 5 to 6 years. If anything, some people, I know people in the past have said, well, you're too bullish. You're not being critical enough of the company. It's like, well, from my perspective, I have been critical, when, in my mind, when it was, when it counted or when there were times where you should be critical. But also, if you just look at X or before there was such a large space mob, that's all there was. There was only the bearish perspective of people who were, whether they were SpaceX Starlink fanboys or people, industry, legacy industry consultants, or industry operators were all so negative on AST. I mean, I remember this guy from Loft Orbital, he's one of the co-founders. I mean, this was one of the first times where this executive came out and said, AST, if I— he was like, if I was managing money right now, I would short it because it's going to zero. That was just day-to-day conversations with people on X. And so Yeah, if you wanted the negative, hedge funds, anonymous accounts who were throwing, or Carasdale, Tim Ferriss, any number of people, if you wanted the negative narrative, you could easily see it because it was just all over X. It was all, every hedge fund idea dinner, pods, all that shit, all those guys were negative. So for me, over the years, for me to actually have conviction and hold a stock, I believed what I was investing in, and that's my perspective. And so recently there's been people who have criticized me about AST, of course, when the stock is down, because that's just human psychology, but that's fine. You're more than welcome to, and you can troll me and you can say whatever you want, but at the end of the day, it's my It's my account, right? And for me, the way that I live life is I have a pretty simple philosophy. It's I hang out with people that I like and I remove the noise, right? And so blocking or muting people just allows me to cut through the noise. And so for some people, they want to have that negativity. And yes, it is helpful because there is a sentiment factor, right? Where Cook talked about this yesterday where all the negative sentiment that comes out and the bears, that gives you a really good indication of a bottom. And on the flip side, when there's a ton of euphoria and stock is doing well, and this is one of the indicators, when people start talking about doing a trip to Vegas with friends, you know that that's pretty much the top. And that's always— I remember in 2021, 2022, I mean, just any, you pick any market cycle, when people start talking about that, like they're counting their winnings and they feel like they're unbeatable, it's just never going to end, that's when you should probably start pulling back risk, like taking some chips off the table. But yeah, for me, if there's people that I mute or block, it's just to remove the noise because There is a mental— and sometimes people are like, well, I want to engage with ragebaiting and I want to counter. And there was a time, like, I guess it was like 2, 3 years ago, where I would studiously respond to every reply. And if people had an argument about AST or any number of names, I would reply back and try to speak with them in a civil way. But then I got burned out. Like there's so many, especially if you have an account where, you know, if there's like 56,000 people following you, not, I mean, obviously not all of them are engaged and there's probably like a ton of bots there. Right. But it's hard. It's hard to engage with everybody. And when people are trolls or they're just looking to egg you on, it's like, I don't need that. And I'm at a point in age and where I am in life where I just try to simplify things because the mental tax. I've got a family and I've got things that are beyond just investing, but it's thinking about the kids' wellbeing and their futures and all this stuff. It's like, I don't want to deal with some troll who is spewing negative comments about me or making some insinuations about what I'm doing. Just for example, there was this one person who said these things about me. I had this back and forth with them in private. I was like, I don't appreciate these things. So I do this, by the way, I share information because I just enjoy community and I'm invested in these names. If things don't work out, which if you're an investor and you bet 51%, you're a genius. And as long as that 51% is sized bigger than your losers. If you bat 60% or 70%, you're at god level. And so you're going to get some stuff wrong, and timing has a lot to do with it too. For some of the things that I'm invested in, they're moonshots, and there's going to be risk, and people need to understand that. And I think one of the One of the interesting phrases that I heard during this past drawdown was conviction cannot be borrowed. You've got to do your own work. When I view X, I see an open form of ideas, investment ideas, but then it's up to you to go dig into it. So whether it's for a, oh my God, this could be a quick trade because everybody's behind it and it just has momentum, that could be an idea. Or it could be something that is a good short, like it's overvalued or something's going to give in this company's thesis and it's going to cause it to go down. And so you've got to be the determinant. You have to have full responsibility of your own portfolio and your own decision-making. No one's putting a gun to your head to pull the trigger and to get in or to get out at whatever time. There may be an idea that you bought and it doubles or triples and then it goes down 80% or whatever. It sounds like I'm talking about a crypto company. But yeah, you had the opportunity to exit, to enter, or do whatever you wanted. You could have shorted too. So I think it's important that folks take responsibility, and at the end of the day, if you feel— and this is important— if you feel mentally strained from all the noise that's on X, then just simplify. Because I think I've talked about this before where one of the most brutal experiences was in AST where a decent number of us had a high level of conviction and we rode it all the way down to $2. And there were people, the noise got worse and worse as it went down. There are people on here who are still on the platform and some who actually own AST now who were negative on it and Those people in particular, by the way, I will never forgive. But there was a lot of bullying. It's like, oh, you're a bag holder. It's going to go down even more and you're going to end up with nothing. And of course, you've got the legacy guys like Tim Ferriss and others who were negative on the company. And there were people, unfortunately, who sold at the bottom, or when it rallied to $3 or $4 or $5, They were like, oh, thank God, and they sold out. So that was tough. That was a really tough period of time where it was hard. It was hard to hold. I think for the people that were focused on the noise in the near term, they got carried out, unfortunately. That was a tough lesson. So I think, obviously, a thesis can change and your own financial situation can change too. So if you're older and you need to retire or you have a family and you've got to pay for things that are coming up, being on margin on a high-beta stock in concentration, a concentrated position is probably not a good recipe for you to pursue. You probably want to have a smaller bet, definitely not be on margin. And so every situation is different where I think And this is one of the issues with X. I think the platform in general can be very toxic and people just get pulled into doing bad things, whether it's to themselves or there's always this tit-for-tat where I need to prove that I'm somehow a better investor than you. It's like, well, everyone's situation is different. I see people who trade stocks around, they're like, oh my God, I scalped 5 or 10%. And so these AST bag holders, are down, what, 50% from the highs? And it's like, well, my cost basis is much lower. And yeah, our situation is different. Yes, you scalped 5%, 10%, but if that's a victory to you, then great, right? But there's no need to shame people. And yeah, there's like, I don't know, with the AST community, by the way, It's just there's a few people that have become so toxic, um, and they've blamed me for being too neutral. And it's like, I don't give a shit. I really don't care. Like, I'm here for the enjoyment of, of researching, you know, AST in particular, but also other names, and just sharing my ideas. And I don't have an agenda. It's like, um, I'm doing this for fun, and the day it stops being fun, then I'm not going to do it anymore. I'll move on and do something else. But, um, Anyway, that's pretty much all I had. Let me just, I'll just see if there's any questions here.
[00:59:42] Speaker A: This episode is brought to you by Google Chrome. You think you know a browser, but Gemini in Chrome, that's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration blog, or finally break down that long article you've had open for weeks. Gemini in Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses, set up required compatibility and availability varies. 18+.
[01:00:14] Speaker B: Let's see. So someone's asking, first one is asking, how are they going to use the capacity of the satellites when they are not in the field of vision of Japan? Are they potentially going to sell the capacity to another sovereign nation or MNO? And so this is the beauty of the sovereign model. Japan will own those satellites and they will be flagged out of Japan. However, when they fly over other regions and countries, AST will be a— just simplify it, but AST will be leasing them and they'll be able to connect to the ground stations elsewhere and AST will then be selling capacity to another MNO. That's how it would work. Let's see. Someone's asking if for the JLEO or SATCO, Europe. AST is essentially selling the satellites to the nation or consortium. Does that reduce the possible revenue generation, or do you believe the agreement would still include revenue share? Yes. So will the economics— I think the likelihood is that the economic split will go down, but then you're going to more than multiples make up for it in terms of the actual share If you have the 4 largest MNOs in Europe and the 3 largest, or the only 3 largest, the only 3 MNOs in the US, and instead of getting 50/50, you ultimately— and for AST, by the way, they have guaranteed contractual minimums for 50, or they're at 50/50 with AT&T and Verizon. That lasts until their definitive agreements are over. For Vodafone, that lasts for 10 years. But then, do those numbers go down? Do they go down to 30% or 40%? Possibly. But again, you would be more than happy to get 100% of a market with 30% of the economics versus a third of the market with 50% of the economics. Let's see. Agree sovereignty is critical, but what's truly stopping SpaceX from pivoting to offering sovereign-controlled Starlink shells? Architecturally, yes, they're regenerative, but is it a real deal breaker or do they still do it if they have to? Trying to understand the full picture. So that is a good question. It's always a possibility. Starlink could move to a bent pipe architecture and sell satellites to countries. So that's certainly possible. But I think the thing that torpedoes that idea is the fact that Starlink is pushing forward narrative to the street that they are a vertically integrated solution. And then on top of that, you have a founder who is politically heavily involved in these countries that have an issue. Elon Musk is a very active political person in Europe. And so I think that well has been poisoned. I don't know if there's ever a chance to go back on that unless of course Europe becomes far right, and then maybe that's possible. I'm not taking a political stance here. I'm just kind of stating the obvious. But yeah, it is a possibility. The biggest issue is that Starlink has already played its cards. People look at pattern recognition and they see Starlink, oh, okay. So these guys are working with MNOs, They signed on with T-Mobile, KDDI, and a few other carriers, and they're going to be in a partnership model. Then only a few quarters later, they say they're going to take on the MNOs and eat their lunch. So once the mask is off and you reveal that you're ultimately looking to commoditize everyone else and take their profit pools, it's hard to then go back and say, actually, I take that back. We're going to work in a more supportive role as a partner and we'll build satellites for you and then you guys can figure it out or control it. So I think it's tough. Someone's asking, do you anticipate a September launch? No, no, there is not going to be a September launch. I think there's going to be an October launch and possibly 2 October launches, but the time for a September launch due to the the Crew Dragon F9 launch, that passed. I think there was a possibility the company could have pulled off a September one, but as we all know, the satellites 14 through 16, 2 of them were finished, one I think had an issue, at least that's our speculation. And so September unfortunately is not a possibility. So I think that's it. Let me just See if there's any new questions. I think that's— yeah, I think that's it. So yeah, thanks everyone for joining. As I mentioned before, it's an exciting time because I think it's like having that moment of clarity where the market— so I tend to be long-winded, I guess. I'll just talk about this. There was a point in time a few years ago where when people talked about, for anyone who cared, which was basically nobody, when Abel talked about direct-to-device connectivity, providing satellite to your phone, broadband connectivity without any modification, people poo-pooed it. They're like, how are you going to connect an unmodified phone with its low power, small antenna to a satellite? Then how are you going to do broadband? Then even if you do all those things, no one's going to care. It's a niche market. No one cares. Then fast forward to today, direct-to-device is on the agenda of every country. The UK just talked about it today. It's a big strategic issue in Japan. It's Europe. It's not just about mobile phones. It's about IoT devices, drones, robots, everything. Everything needs to be connected at all times. It's the next leg. It's become the great disruptor, because Starlink Mobile is now claiming that it will go out and eat all carriers' lunch as being the first truly global mobile network operator. Interestingly, we've gone from niche market, it'll never happen, and you guys are a two-bit player, to the most important strategic partner of all the MNOs globally, putting forward this new broadband service that is going to be absolutely critical to connecting, whether it's AI devices that are connected to the network, I mean, any number of things. So it's crazy. Cook talked about how time moves slowly when the stock is down, but then time moves very quickly when the stock is up, but in the period of a short 5 to 6 years, we've seen the creation of a new market and something that's revolutionary that went from being an impossibility and something in the niche to now being a necessity, table stakes, as the T-Mobile CEO just said, where this is the most disruptive force in wireless connectivity. Satellite to device connectivity. So I'll end it with that. Thanks everyone for joining. And yeah, I'm looking forward to the next few weeks and months. I truly do think we're at the cusp of the market figuring it out, and it's gonna be exciting. But with that, I'll end it. Thanks everyone for joining, and we'll talk again soon. Bye.
[01:08:08] Speaker C: 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. To catch all the latest news, about AST SpaceMobile, make sure to subscribe. Thanks again, and I'll see you next time. Listen. Mmm, waffles.