248 Satellites vs 650: Why $ASTS Beats Starlink on Efficiency

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[00:00:55] Speaker C: It's truly a stochastic process. ASTS stock can go to a penny, it could go to a billion dollars a share, it could literally go anywhere. ASTS, 3 for 3. Starlink, 1 for 3. Okay, good evening everyone. I ran out, uh, to go for a quick surf. It was basically 1-foot waves, which are the best. It's been pretty big recently and there's just— my neck is all messed up. Turns out paddling in big waves when you're in middle age is not a good idea. So fun to go out and rip some 1 to 2 footers like a hero to, uh, end a fun weekend. So I hope everyone had a good time. I basically just hung out with my kids and what more can you ask for? So This last week, it was sort of the mask came off of what was causing this debacle. And, you know, like most things, it usually turns out the emperor is wearing no clothes. And some of you might be going, kook, could that perhaps be an ironic statement? But I feel like I've long ago taken off my clothes. I think I've been pretty transparent and I feel like now Corey's going to just make a banger of a meme on that. But I feel like I've been pretty transparent about my ups and downs. And most people have ups and downs. Not everyone is the second coming of Christ, as it turns out. And this Leo guy, Aschenbrenner, don't really know how to say his name, is an impressive person. I read his paper. and thought it was very prescient. You know, I really frankly regret not having read it sooner. I had been really good friends with one of his advisors that had actually worked in their office when I needed sort of office space for a while. So I was in this guy's general orbit and reading his paper was incredible and his returns were astonishing. I just never really thought to look into the Deep composition of his returns. I would see the things he was buying. I know Anpanman was following him really closely because he piled into, what is it, Sharon AI and T1 Energy and things like that. And you'd see these, you know, up 800% numbers. And I had no idea that this guy was running 4x levered. And so it just struck me as astounding to me that an AI researcher focused on a fundamental thesis would also be a financial engineer and a terrible one at that. And so when you actually look at his book, he was long AI and he was also long AI. And so on the short side of his book, he was short things like Adobe. So basically short AI losers. Well, that's just like being long AI. And so he was long AI on both sides of his book and holy shit, This is why you don't let 25-year-olds run money. And I mean, my God. And so when this happened, one of my buddies, he's a portfolio manager, called me and just was like, could you imagine the dumb shit we would've done if someone had given us $20 billion as 25-year-olds? And it's just, yeah, I know exactly what I would've done because I made those mistakes. I had portfolio managers over me, thank God. And those guys still made mistakes. But this is just a basic breakdown of factor risk management. And so anyone that works at one of the big platform shops would know that a book like that is long the momentum factor, it's long the AI factor, and it's absolutely ridiculous to think that the right hedge on all that was to short software stocks. Because what happens when people sour on AI? those AI stocks get murdered, but then also the software stocks you're short rip. So your book just acts as if you're 4x levered, whereas he might have thought for a hot moment that he was hedged on his beta. Who knows? My suspicion is this guy had just an absolute shit risk manager. And, you know, I don't— I didn't go through all the bios of these people, but it's really just wild. And so Ken Griffin, who I know well, is truly the best. He's one of the best business managers I've ever seen. I've been on the sharp end of his spear. And so it's like one of those things too, while you're being killed in the arena by the dominant gladiator, you respect the guy. It's like, well, if it's going to end this way, I'm glad that it's Maximus. And so Cannett is the best and would've snuffed this out somehow. I'm sure his team would've figured out the positioning. They would've popped this guy's book in the model, have seen what a clown it was in terms of risk management. And then it's not like there was manipulation. I know it's easy to get very conspiratorial, but you don't need an actual conspiracy for the conspiratorial outcome to in fact happen. Because all of a sudden there's this vortex. And so just like on option expiry, how stocks get pinned, people are going to know. And so these positions would've leaked out. The primes would've been talking. You know, people go home. New York's not a big place. And there just would've been some knowledge that, hey, someone's in trouble. And you could have guessed the type of trouble because you could see what's happening in the COSPI. And so if you know someone's going to blow up on a certain type of thing, even if you don't know who's going to blow up, which you probably did know, then you're going to just short those things because you know there's going to be a clearing event to cover into it. And then as we saw, quite sadly, these Wall Street dramas don't happen without normal victims. And so it's really heartbreaking when you see retail people get nuked alongside. And so Jacob, who I had DM'd before, I don't, Really remember knowing him very well, but seems like a really nice guy. He he also learned some hard lessons on portfolio management, unfortunately for him. And so the problem is you have these vortexes, which was really seemingly tripped off by Korea because again you can't have everyone in a country three times levered. Where's the incremental buyer? Ultimately someone sneezes and the whole thing comes undone. This type of stuff just cascades through, and of course it was summer. There was some re-rating of the yen, some re-rating of interest rates. All these things sort of conspire. And as people are degrossing, which means if you have a book that's levered, or said differently, if you have a certain amount of VAR, which is how a lot of the pod shops are going to run, all of a sudden the market gets way more volatile. So your VAR goes up, which means you have to sell given your risk limit. So it's one of these ironic things is risk picks up, you've got to get smaller, that causes things to go down. If it were things that people were long and they have to sell, they go down because you gotta sell. And that's what took down momentum stocks, including the space sector. Space sector definitely was not helped out by SpaceX getting just chopped. And so we'll see how this works out for the SpaceX shorts. I mean, it's like Elementary school level analysis of, hey, there's a lot of lockup expiry, we should sell SpaceX. I mean, that makes 99.9% sense to me as well, except the problem with is when everyone is positioned that way, who knows what's going to happen? And so certainly not a trade I would do. It's very low conviction for me, and I don't know what type of rabbit Elon's going to pull out of a hat. But having SpaceX trade terribly certainly took a lot of the wind out of the sails of the space sector. So then sure enough, ASTS has been dragging. It certainly demotivated me. I've just tried to not pay attention. And so I've been surfing a lot to the absolute detriment of my neck. And so I really hope the stock starts going up so I can physically recover. But this is what the stock does, and the key is just to stay alive. And I was thinking a lot about the leverage again, because I'm just absolutely astonished that Leo was running 4x leverage when the guy doesn't have a background in finance, which is probably why he was running 4x levered. But anyone that's been doing this long enough has either gone out of business or has the humility to realize that it's very difficult to run with leverage because stocks can go anywhere at any time. It is truly a stochastic process. ASTS stock can go to a penny. It could go to a billion dollars a share. It could literally go anywhere. Those, I would say, are very, very unlikely edge cases on a given day, but they can go anywhere. And so you really need to position your portfolio as such. You should not own these bullshit levered ETFs. These things have a massive amount of time decay. They're absolutely horrible instruments for anyone, for anyone, unless you're using it On a one or two day basis for a trade, and then you know that's that's how it goes. But what's interesting about the leverage as I was thinking about it, you know of course then my feed everyone is pious. You know all of a sudden you know everyone is is celibate monk in this world, which is also total load of crap. Like oh you shouldn't use leverage. You know blah blah blah. You know Hedgeye was coming out with stuff, and I'm thinking this douchebag like. Remind me of your risk management on your Playboy stock, which I think went to zero. And so this guy came out, you know, talking about #process in a really sanctimonious way. And of course, you know, the topic du jour of last week was everyone was a risk manager. You know, the week before that, everyone was an Iranian policy expert. And so, you know, meanwhile, Playboy, this stupid piece of crap, is $1.11. I remember my visceral anger at Playboy going to $40 when ASTS was trading below $10, thinking, how in the world did I own ASTS when I could have bought Playboy? And it just pissed me off. But I looked at Playboy and I was like, this is a shitty business. They're literally selling dildos or something. And so like, why is this hedge fund's top pick? Follow their stupid process. Thing went down 100% or 99%. So screw them. So everyone was really sanctimonious last week. And I've used leverage. You know, this is my guilty sin. Let's have a confessional. So yeah, I used a lot of leverage. And so in COVID, I was using an enormous amount of leverage. Why? Interest rates were 0% and there is a lot of asymmetry in SPACs. And so I bought a ton of SPACs that still had the floor. They were trading well. And because I could redeem those out at $10 and fund at 1%, That's a good trade. Where I went wrong is I got sloppy. And so I fell in love with my trades, which is what you're not supposed to do when it's something structured like that. And so I held those things. The NAV floor went away, they went down. I joined a community. I had to figure out why do I own this AST SpaceMobile, which I had done some reasonable work and thinking on, but certainly hadn't written a 300-page research paper on. And so then I found myself in COVID with a lot of leverage that was unintentional. That is not good. You don't want to have unintentional leverage. That is bad. I came close at periods to not having enough collateral in my account. Wasn't probably going to be a disaster. Wasn't going to get full liquidated on my equity, but I was going to start to get blown out of stuff. But I managed. I kind of made it through. ASTF stock, did, I can't exactly remember the entire sequencing of it, but what I do remember is that the stock started trading well in, I believe it was 2025. Although let me look it up, it's all a blur. And the first reaction was start selling some stock to blow down my leverage. Now guys like Stuart Taylor will say, oh, Cook has already secured generational wealth for his family and now he's just a pumper and he's already sold but telling you to buy. Go, someone go through all of my spaces and remind me when I've ever told anyone to buy, and remind me when I've ever told a story that's different from the one I'm telling now. And so in 2024, stock started ripping. I immediately started selling some stock to repay my debt, and then it was instant regret because of course the stock went to $40. I cursed Anpanman's name every single day. I blamed him entirely for me re. Repaying my debt because he'd be like, Cook, you should repay your margin. Loser. Go back to baking donuts, dude. You know, that was my attitude at the time. It was the right advice. I had unintentional leverage. When you make a mistake, you should fix it at the soonest opportunity. But then I had deliberate leverage. And so I chose to live by the sword and to die by the sword. And so I took out an enormous amount of non-recourse leverage in the form of LEAPS. And so when you buy a call, you're effectively borrowing the strike. So I had non-recourse leverage and a lot of it because I was as sure as I could be on my thesis of ASTS. It was something that I'd done a lot of work on. I'm not 25, and so it was one of those times where I decided I was going to bet on myself. if I wasn't going to bet on myself, it was going to be a, for me, it was going to be an issue of self-respect. I had done the work, I was sure. And the thing that made me sure is they'd promoted Scott to president and Shanti to COO. It was that. And I started to get, you know, really because of Katzi and some others, some really high conviction on Block.one coming to fruition because of the SEC filings, even though it had been delayed, delayed, delayed. felt like I knew that this was happening. And then when they promoted Scott, this is something where over the course of your career, you get different perspectives. So it's always very humbling to realize how much you don't know. It's scary to me just to think about what I don't know. And what I had not known earlier in my career is really how to understand org charts and to understand the importance of— it's not that I didn't understand the importance of people, but I really hadn't thought about it. As explicitly as I've come to think about it in my job that I currently have, where when you're building companies, you realize that if you have the wrong people or if you don't have people, stuff doesn't get built. And it's pretty obvious when you're a private equity person and you have a need for executives, if you don't have the right executive, stuff's not happening. And if you don't have the right executive, they're not recruiting the right people. It's very, very important. And so you certainly wouldn't have promoted Scott to president to set him out, to set him up for failure on Block 1 being a bust. So that was the moment I knew. That was the moment I distinctly remember. I went to, I was walking around a cool gritty part of the city I live in and I called Anpanman and I was like, dude, I'm thinking about this. And he actually egged me on. I was like, Kook, do it. And so I lifted the offer. Boom. But point is, I'm kind of rambling, That was a point-in-time deliberate strategy of leverage on my view of a discrete revaluation event that was going to happen because of a thing. And ASTS, when I bought this monstrous position, the stock was $12. It went to $40, and then it really stabilized in the $20s. I won. And then from there on out, I worked day in, day out, stressing myself out, to get rid of that leverage because leverage is not my long-term strategy. It was a point-in-time tactical solution. It was not a strategic solution. And that's where guys like Leo confuse me because as his portfolio kept going up, he was keeping constant leverage. So as the risk-return on his book changed massively, even though he had these crazy returns, his ability to get knocked out kept on resetting. So in the exact same way that if you're a portfolio manager at Millennium, you could have an awesome year, but your capital gets cut based on your high watermark. And so if you're up 5%, which is awesome for those guys, and then you draw down and you're only up 2.5%, well, you're still up 2.5% for the year, but from Millennium's point of view, you're down 2.5% from your all-time high. Your capital gets cut in half. And so Leo put himself in that position, which is nuts. And anyway, he learned a very valuable lesson. So that's a lot about leverage. And I would just say that if you're not an investment professional, if you haven't worked in a seat where you've learned about factor risk and had a real risk manager with different stress tests of your portfolio and things like that, all of these things that I've been through, that Anpanman has been through, If this isn't part of your experience, you should have a lot of humility to know that even the people that do have that experience still get their asses handed to them because the market is stochastic and is designed to blow you up. And so if you survive this latest turmoil and you had had an irresponsibly levered portfolio, maybe you're lucky and you can make amends for it. So I know there's some people that survive this latest bout, And they were sending me DMs like, "Hey, I made it, Cook. You know, thanks for the support, the advice, whatever." And my comment to them is: View yourself as an animal that was spared in the jungle to go warn other animals in the future. And so you were spared for a reason, and that reason is to help educate other people to avoid the near miss and the pain you went through. But really. Try not to put yourself in that position. It's just not worth it. Um, I did it tactically, so I'm trying to be consistent and not be one of these people that says, you know, do as I say, not as I do. That's exactly what I did, how I did it. I felt like I had a moment in time where I saw the ball more clearly than I've ever seen a ball in my life. And so I did the thing I did, and I hit the COVID off the ball, and now I will never do it again. I only had to do it once in my life.
[00:19:50] Speaker D: I did it.
[00:19:50] Speaker C: I'm done. Never again. And so the people that are running constant leverage, especially when the market is at all-time highs, that's wild. If someone were to come to me and say, hey, Kook, you know, I've done all this research on ASTS, and it's their own research, it's not my research, it's not, you know, them listening to my Spaces, it's them doing their own work and their own conviction, and they, you know, see the stock down 70%, this would theoretically be the time to be levered. not when it's 130, not constant leverage. So you want to be smart about it. When everyone else is delevering, intuitively, that's probably, you know, the time to do the opposite and lever. But more broadly, if you don't have a background in all this, you should really just own your shares paid out. So let's get to the fundamentals. Batch 2 is ready to go. This is exciting stuff. The cadence of this company, is now really picking up. So it looks like we're going to have launch over launch in about a month and a half. And then batch 3, which is '14, '15, '16, to follow, quote, right after. Not after, not far after, right after.
[00:21:00] Speaker A: This episode is brought to you by Accenture. When your advertising operations fall out of sync, everything else follows. Spotify and Accenture are working together to reinvent the rhythm of ad sales using automation, analytics, and smarter workflows to simplify campaign delivery and access better data across the business. The result? Less time spent on operations, more time connecting brands with the moments and fandoms that matter most. Learn more at accenture.com/spotify.
[00:21:32] Speaker C: So read into that. Production advancing through Bluebird 42. It's a lot of Bluebirds. So there's some really exciting things in Midland. And as we've talked over and over and over again, the hard part with ASTS was building the prototype and then around that prototype, building the machine that builds the machines. And so building a factory, as we all have— Tesla is a great recent example of just how difficult it is in production hell. We know what that looks like. And so Elon sleeping on the floor to get Model 3 going, it's not easy, but once you have it, you've got an incredible moat. And so we really do see the signs of ASTS having beaten production hell, and now we're seeing the fruits of that, which is a lot of launches. We're going from beyond a concept stock, you know, a show-me-tomorrow stock, To they're delivering now, which is really exciting. And they talk about having the beta service later this year. That's another statement in terms of how many satellites that we can expect to have, to have up. And so launch is going to be getting pretty crazy. And so we have— And Panman did a cool summary of what kind of a graphic of just what it looks like to stack 3 of these Bluebirds. And then what it looks to stack 8 of them. It's going to be really wild. And when you do the math of just the size of the square footage of arrays, when you start to launch 3 to 5 to 8, 6, it's, it's incredible. And so size really matters. And so we got to think a little bit about how much launches there are going to be this year. We might learn more on the earnings call on next Monday. Maybe they're going to come out swinging and say, well, you know, we did this convert, we listened to shareholders, you know, the Muppet, oh no, no, no, and we booked a bunch of Falcon 9 launches. Maybe they'll say that. Not quite sure. I'm very confident they're going to give some more clarity on the launch cadence. But Scott is saying they're positioned for beta services later this year. That implies more launches this year, which I think is somewhat obvious, seeing as they're doing batch 3. And what's interesting, if you look at this tweet by @SubaruWRX0219, uh, title, you know, obviously an academic, his handle is Absurd Idiot. There's a lot of humility among the, uh, space mob. He posts just what we all know, which is the globe showing The Bluebirds we have with the, with the beam radius that's projected. And you can see just with 3 satellites in a row, you basically have continental US covered. It really doesn't take a lot of satellites to cover the world. This is happening quickly. And so we believe that they're going to have a bunch of these Falcon 9s launches slotted in the near term, and that's going to then dovetail in 2027 with a more diverse set of launch vehicles. And as Kevin Chen points out, when we have Margarita de la Valle, the CEO of Vodafone, saying that they're going to have 45 satellites at the beginning of 2027, well, she probably has some visibility into that. At this point, all this data coming out suggests that we are not going to just have satellites sitting in Midland. And as Tanner pointed out as well, the satellites are already among us. And so there are already fixed cells over the continental US being provided for the MNOs and OEMs to test and do network integration. So it's pretty crazy is You know, you live your day right now. Not only are the satellites overhead, but they're beamforming on you. And pretty soon your phone is going to hiccup. It's not going to hiccup, it's going to hook up. And you will all of a sudden have service if you are unconnected and you will have service if you are underconnected, which is really the big deal. And underconnected, and I could be wrong here, but my Simple view, and I guess I could clob this a little bit more, is that when you have a fully integrated network that's seamless, where your phone is not roaming, but in fact pulling from different bands of spectrum that are all integrated under an MNO. And in fact, I actually don't need to research this because I actually know this. When the network is set up like that, which is how ASTS is set up, your phone, if you are underconnected, will just simply go to the satellite slices.
[00:26:26] Speaker A: Mm-hmm.
[00:26:26] Speaker C: This is different from how Starlink works. Starlink is roaming. It's, it's on-off.
[00:26:31] Speaker B: It—
[00:26:32] Speaker C: you're roaming onto that network and your phone is trying to get off it. So if it sees T-Mobile with 1 bar, it's going to go to the 1 bar because that's home. If it has no service, it's jumping, it's screaming into space, shouting to try to connect to a SpaceX satellite, but it doesn't want to be there. It's not happy there. ASTS is fundamentally a different network architecture, and this is one of the beautiful things that allows this underconnected part to be part of the narrative. And so Joe Madden, who is a very tenured network consultant or mobile consultant, has done a lot of due diligence on ASTS. And what's cool Is he summarizes what we already know is that the TAM for ASTS is much larger than that for Starlink because it works indoors because of the link budget. The ASTS service works indoors, which is the killer app to be able to use your phone where you are. You're not always in the middle of an open field. Sometimes you are, but you're not always in the middle of an open field. You don't always have line of sight. Which means if you want it to work anywhere, including inside, you're going to need to be using low-band spectrum, which propagates better. You're going to need a beam that has power to connect to your phone. That results in TAM. If you have a higher link margin, you have more TAM because people can use it. And so ASTS can close the link budget in a car. Starlink cannot. ASTS can close the link budget indoors. Starlink cannot. ASTS can close the link budget outdoors. Starlink can. ASTS, 3 for 3. Starlink, 1 for 3. Choose your fighter. And the MNOs are confirming that this whole thing was not a waste of time. Thank God. You know, I literally wake up every day and I'm thinking, okay, I don't really know how to check Margarita's tweets because I was always fearful I was going to wake up and one day on LinkedIn she's like, well, I would like to announce to the world that ASTS was a waste of time. That would be a bad day for El Cuco. That would be no, no bueno. Or kook. I would just start a new life in Baja California. Me, lobsters, a longboard, probably a Glock just to protect myself. This is kind of the plan B if Margarita were to write that ASTS was a waste of time on LinkedIn. So imagine my relief when Margarita says, quote, it definitely is worth us working on. Thank God. Sometimes they just tell you like it is. This wasn't a waste of time, folks, because that would have been an epic, epic fail by yours truly, um, if it had been a waste of time. So why was it not a waste of time? Well, size matters, you know. So that's what— that's what she said. And so Size matters. Everyone's filing these constellations from 3,000 satellites to, you know, of course Elon, 1 million satellites. That's a lot of satellites. Let's talk about space junk, right? Well, ASTS can do the same thing with 248 satellites, and when they're going gangbusters and doing secret military operations to save the free world, they're using 500 satellites. And so this is a big deal. MNOs care. It also makes the constellation fundamentally more manageable. I haven't really even delved into the issues of how they do the fleet operation when you have 5,000 satellites with all the beamforming craziness. Who knows? Not our problem. 248, and we got our full constellation because we have these big arrays. And as a result of having this incredibly efficient system, Katzi, who's developed some really good first principle kind of ideas for us, which we're all eternally grateful for, has always said Spectrum will find the most efficient solution. Smart. Katzi's smart. And so what we see each day are other people with Spectrum, whether it's Sirius Satellite Radio, whether it's grain management, Whether it's Legato, now NexNav, which has some spectrum they're using for utilities. All of these guys are filing with the FCC to allow, to try to allow their spectrum to be used for supplemental coverage for space. All these guys with low-band spectrum, so far, and to our knowledge, there is only one solution that can accommodate this low-band spectrum. Which implies that they have a rabbit up their hat or that they're trying to join the bandwagon of getting their spectrum leased to ASTS because it is the highest value use for that spectrum and provides them with a pathway for most efficiently utilizing their asset. Spectrum will find the most efficient system. And going back to size mattering, Anpanman did some really cool calculations. And so Globalstar's 25-satellite constellation, which gives you the SOS service, that's 400 square feet of array. That is 0.17 ASTS satellites. Their entire constellation is the equivalent of less than one-fifth of one of our satellites. Iridium's constellation, which cost them over $3 billion Almost 30 years ago is 3,450 square feet of array. That's 1.4 of our satellites. Pretty incredible. Starlink with their D2C service, 650 satellites, which is 43,450 square feet. That's 18 of our satellites. Pretty crazy. That's why we're so efficient. We don't even know that those other systems will really actually work because you start to deal with how you coordinate the handoff with all those satellites. And I think that the view is, because ASTS was originally going to do this, when you are trying to actually create this swarm of satellites and coordinate small arrays to form effectively what looks like a big array— When I was talking to the ASTS engineers, they said, It just doesn't work. That's why they abandoned it. So joke's on those guys. You know, they're going to get there and find out there's no there there. Meanwhile, S-band globally, more spectrum finding our way for free. SafariCom authorizes ASTS SpaceMobile to use 20 by 20 megahertz spectrum for direct-to-device services. Pretty cool. Free. Better than free—they're getting paid—and so the spectrum is finding its way. And the key observation that many had—we originally called this the Scotia Bank thesis before we decided to excommunicate Scotia Bank for the thought crime of working for short-biased hedge funds and then manipulating our stock. So from now on, Scotia Bank is dead to us. But what was previously called the Scotia Bank thesis. Is the idea that it's about capital efficiency for the MNOs. It's not even necessarily primarily about dead spots, not necessarily primarily about connecting the underconnected. It's not that it's not those things, but from the MNOs' perspective, it's about capital efficiency and capital budgets. And so if ASTS can drop the buildout costs because they can deploy spectrum more quickly, especially in areas that are less populated, then they don't have to build incremental towers to light up that spectrum, especially the time to monetization. And so some spectrum is just not as profitable. You just don't have enough people in a given area. And so you can get your spectrum monetized by deploying it with ASTS, And there's a point where in rural areas, there's just, the towers are too distant from each other to benefit users in a given area. And so ultimately, when MNOs realize that they can decommission towers, it's a different game. The MNOs are going to fall in love with capital efficiency. Think about how CEOs fall in love with the concept of repurchasing stock. Things like this. They realize, well, oh my gosh, my EPS just goes up. What do you think is going to happen when the MNOs realize that they can deploy spectrum without capital outlay and reduce their CapEx budgets, which allows them to then do things like repurchase stock? It frees up capital. It's a capital allocation enabler. What do you think happens? I think it's obvious they get hooked on, hooked on the crack of ASTS. They're going to get a hit of ASTS and they are going to like it. And that's, I think, going to happen pretty soon. So what else is going to happen soon? Well, I've come to realize that ASTS has a specialty of having unannounced announcements. And so basically it's almost like Scott enjoys making people disciplined in terms of not buying short-term options, because you might think you know what's going to happen. And so Scott will then go, I'm going to have an unannounced announcement. So the thing that we think is going to happen will happen by all accounts, but you will not get an announced announcement. So therefore your option will expire worthless because he's just trying to actually help you be a better investor. That's what he's trying to do because he knows it's good for you, this short-term pain. And so let's talk about some unannounced announcements. Again, the specialty of ASTS. These guys are the opposite of pumpers. They are the unpumpers. And so we have J. Leo, which is by all accounts announced. Alas, it is not. And so we have our European correspondent somehow has now also become our Japanese correspondent. Um, I guess, you know, when you're, when you're European, you're really a man of— you're a global citizen. And so he reports that in late June, things we already knew, Japan's Ministry of Internal Affairs and Communications selected a joint venture with Rakuten and ASTS, and so it's actually been disclosed in the fine print of the ASTS convertible bond offering document. Pretty wild. By all accounts announced, we have no idea when it's going to be formally announced. Katzi over the weekend was finding some FCC documents that showed that. Testing had commenced in Japan, so maybe that means something. Maybe it doesn't. We've seen some recent hires for business development in the APAC region. We've had a hire of a partner technical lead focused on Japan, and that's reported by one one one one one one want me some of these screen names for God's sake. One is in the number. Yuan as in the currency, and then Juan as in Super John. Good luck to whoever married this guy. He's probably a super annoying husband, but shares my sense of humor. But he reports that there was another technical lead for Japan. All of these things lead us to a confidence interval of things that are likely to happen. We just don't know when. And what we definitely don't know is what the stock price reaction's going to be. ASTS is one of those joker stocks where we always assume they're going to announce, you know, a deal with anyone awesome, and the stock will find a way to go down 5% in the morning and then up 15% by the close. Who knows? But we know we're going to win because the design, the first principles of the system are sovereign first. And it's a thing a lot of us have come to really appreciate is the sovereign nature of these systems in terms of how countries are thinking about it. And so let's do a quick review of some of the cool thought leadership we had. So Cathie was highlighting some work that was brought by Rocket Tank 123, going through some of the documents in Canada where they talk about the sovereignty and control. Pretty cool stuff. And so we've seen this echoed across really all of these deals. And we have Anpanman also retweeting this, and it's, you know, I think just some Rocket Tank research. So someone with a deep understanding of this shows us all these countries are effectively working the same way. I think Rocket Tank, or it might have been one other, Smith, last week was doing some work in the Bahamas, seeing some of the bid documents highlighting these issues. We've seen this with Satellite Connect Europe. We've seen this with JLEO, certainly seen this with the US. And so why do we expect these unannounced announcements to come to us? Because the end customer cares about the sovereignty of the system, and we are largely the only people that can accommodate that. So it should come to us. This week we also had some additional information come out about Amazon's system. I started to read it. I honestly had a hard time getting through it. I didn't critically read it, so I'll be the first to disclaim that. But what I did see, what struck out to me is that they're really only looking for approval in the L and the S band. And so, you know, nothing that starts to get threatening to ASTS with respect to low band, still not obvious how Amazon is going to have A path to market for its service. Mega Constellations was concluding that Viasat has been basically Trotsky'd in this, meaning that their Aquatis JV is likely dead. So some other things I need to get smart on. I'm gonna be carefully reading other people's analysis of this to make sure I don't get blindsided by anything. But Amazon, again, dropping a really big constellation looks to be more of a problem for SpaceX. But then we also have some interesting stuff coming from the US government with respect to its launch capacity with a small upstart named SpaceX. And so there was an additional task order, so 2 task orders with the US government for 18 launches before the end of 2027. These are for launches related to space-based sensing and tracking. And they're out of Vandenberg. And so Tanner asks, why 2 task orders? We already knew that there was one with Sierra and L3Harris, but those weren't slated to launch until 2028 and 2029. And then the other Golden Dome contracts haven't been awarded yet, just aside from the one with SpaceX. So our question, and frankly, our hopium, let's just say it out loud. We like to hope and dream. You know what, Tim Ferriss? Tough shit. That's how we roll. So our hopium is that this is a smoke signal to us that ASTS might be getting finally a Golden Dome deal because we do know that we filed for 2 What are called SSO shells. SSO stands for Sun Synchronous Orbit, and that means following the sun. It involves covering the poles. Poles are important because missiles go over the poles, and you launch into SSO from Vandenberg. We have 28 satellites planned in those shells, which is approximately 9 Falcons. Interesting. Half the Falcons the government just awarded. So hope springs eternal. It's what Space Mom does best. Can't stop us. That's why we're anonymous parody accounts. And we'll see. But yet another little tea leaf. This falls a little bit further in immaturity on our unannounced announcements. JLeo seems Just about like a sure thing. This, in my view, seems pretty sure. I certainly don't have a lot of doubt about it, but I can accept that other people can push back and say this has some more uncertainty to it. But things keep progressing. Pretty exciting stuff. Meanwhile, SpaceX is just going for it. These guys need to create TAM. Their stock is under pressure. Elon needs this to go do a gazillion dollars and So now he just keeps talking. And so they're trying to figure out a way to have full-service wireless network. Now they're not going to go hang a bunch of terrestrial towers, or I'd be shocked if they do. It would just be wild to me that SpaceX is going to move into a business that is valued at around 3 times revenue when they're being valued at quite a lot more than 3 times revenue. And so, you know, here they are. And I was making the point, like, they're starting to To create rumors that they're buying Verizon. I mean, never say never, but sounds like, as the NPA man said, sounds like they're just trying to create a lot of pressure and noise to get an MVNO deal, a mobile virtual network operator deal, which is kind of like what Charter has, what Cox has. Boost Mobile, I think, is an MVNO. I'm not quite sure. And so that's what SpaceX really wants is to be able to get a commercial agreement to access Verizon's network and then resell it as SpaceX phone and have the SpaceX phone also use their satellites wherever they can. That's what their plan is. They want to go direct to consumer. That's how they're going to drive the perception of TAM in the market. And so we keep, we keep seeing them. make this position. And they do have this interesting way to sell it to the market with potentially using Starlink fixed broadband as these wireless hotspots to sort of mesh everything together. It's kind of cool when you think about it, but there's a lot of distance between that idea and a viable solution and how reliable is it gonna be? I don't think people have a whole lot of appetite for a Wild West system. So interesting to see SpaceX sort of clamor under the pressure. I suspect that they're ultimately gonna just hard commit to the AI data center in space, Tam. That's where they have a bona fide lead and something that's a little bit more of a clean story. But we'll see. They're keeping up the pressure. And then lastly, we have this really great list of things by Katzi of all of the FUD that the FUDsters FUDded when the FUDsters would FUD FUD. And so it's a really long tweet. You might think it was written by Bill Ackman, but nope, it's really actually just that much FUD. And you could read this tweet, which I retweeted, called FUD Review. If you're newer to Space Mob, which is an unofficial affiliation of nut jobs, you might wonder, well, are these people ever right? And so you can look at this list of things that we believe to be true that the Fuzz Through says were not true, and you can see that we got to a certain place today and that we were right about a lot of things. And it's just interesting to do a gut check. I'm, I'm thinking about this all day, every day, because what I don't want to do is be wrong. Uh, going back to Leo Aschenbrenner, Yeah, you see what happened to this guy. He seems like a nice enough guy, you know. I don't, I don't think they're— no pun intended, but I don't think there was like real schadenfreude. It's the one German word I know about a German. Look at me now. And so I don't, I don't know why there should be that much schadenfreude with this guy. He seemed like a reasonable guy. It was, you know, but you know, the world was just so happy to see him go down. And as I would just read tweets, the thing is like the guy was monstrously right on AI, and I still think he is. I think some of the pacing of AI can change as you see token prices are going down. None of this stuff goes up in a straight line. This is generally the path of these big fixed investment buildouts. And so I'm constantly always worrying, you know, I never want to look at a guy like Leo going down and whistle past the graveyard and then find myself being the next Leo that went down. So surely everyone can do basic math and realize that my net worth is down 50% in the past 2 months. So, you know, whatever, that sucks, but I'm still here and I don't have leverage. And so I didn't have to sell my portfolio to Ken Griffin, which would be quite an eye-opening experience if that were to ever happen to me. And so I can just basically decide to go paddle out and chase some 2-foot waves like a hero, whereas Leo has the entire world laughing at him. But point is, I've got an incredible amount of angst and self-doubt to constantly be questioning if I'm missing something and really separating how much of this is just a simple market correction, which in my view is really all it is. Versus is there any other type of price signal that should make me think and wonder? And I had a friend over this weekend who's a very senior guy at a big hedge fund and knows my position, one, but also knows a lot about my position because he's a TMT guy. And so we were kind of walking through all the horror cases and things like that. He does a lot of bankruptcies. All he knows is horror, no way to live. He's a very negative guy. So, you know, you look at guys like Leo and there's a cautionary tale. It makes you think, makes you appreciate that that didn't happen to you, but should double our resolve to make sure it doesn't happen, which is why always be researching, always be testing the thesis, be skeptical and make sure we don't miss anything. So this week we have launch on the 5th. I was going to go just because I'm so neurotic. I felt like if I ever miss a launch, I couldn't self-respect. I just have a brutal travel schedule over the next 3 weeks. And so I started to realize doing an all-nighter in Florida would really be imprudent of me, especially given how much work I'm missing. So it's also a little bit disrespectful to my firm for me to miss that much time at the office. So I want to make sure I'm doing right by my firm, to which I'm still very loyal. And so I'm going to be watching on YouTube. And what I thought I would do is I'll do an extended podcast. I might do it on YouTube and basically filibuster the launch and just go through my 300-page research document as people pass time. Because I know sometimes when we're waiting for these launches, there's not a whole lot to do. So I would try to make sure everyone could get a nap before launch by listening to me for 2 or 3 hours read my presentation. Then When launch is about to happen, I'll scream into the microphone and wake everyone up again, fulfilling a useful public service for everyone. So that was my general plan. I cannot wait for Wednesday at 3:00 AM or whatever time it is. Really excited to see batch 2. I'm holding my mission patch from batch 1 in my hand right now. Super cool of the company to have sent all this stuff. I really do appreciate it. If for some reason Scott or anyone from the company's listening, Means a lot to me to get these things. It makes me feel part of it, uh, makes me feel valued and makes me understand that the company views us as partners. So even though this patch, I don't know what it costs for them to do this, but, but I do value it a lot. So I will definitely be spending, staying up all night to, to be there with everyone. So I hope everyone has a wonderful evening. And I think August is going to be a nice break from what we saw in July. No promises, as anyone could easily see. I have no ability to forecast security prices at all, but I have thought that once you have this incredible tail risk occur, which July was, I mean, this, I don't know how many standard deviations off normal July was, but it was unbelievable when I just look at my own models. When you have something like that happen, everything I've seen is that the forward performance of the market is usually incredibly strong because you've had a clearing event. You had so many people de-risk, get knocked out. The wall of worry is unbelievable. There was pure panic. We have war, we have oil prices going crazy. We have— what else do we have? Just Really everything terrible all at once. And then we have the hero of the year blow up.
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[00:53:29] Speaker C: That's usually a sign that from here there's some good powder on the slopes. And so I don't ski, so I don't know if that analogy really is the right one, but I'm pretty optimistic that we are all here tonight. I'm optimistic that now that it's August that we're going to reverse. So I'm certainly kind of anticipating us having one hell of a 2-month ride. And, um, you know, maybe don't go and spend it all at once until it happens, but I'm feeling really good now that we've survived July and what a nasty month it was. Certainly not everyone survived in Space Mob. And so let's always take stock of that. There's some people we feel really bad of and who are going through some really shitty life experiences because of this. And it's, you know, it's a shame, but let's all endeavor, if you can, to make sure it doesn't happen to you going forward and learn from the experiences of people who've had some really tragic portfolio misfires and try to learn from it. Try to make sure it doesn't happen to you. At the end of the day, the whole point for me to be doing this, and I think I can speak for people like Anpanman, is to try to share— first of all, we enjoy it. Second of all, try to share our experiences as a form of help in an unofficial way, to just talk out loud, share experiences, hope some people can learn from it. And if it spares some people from making some mistakes, then it's great. But by all accounts, the last thing anyone wants to do is drive people to make a mistake or to drive someone to do something they otherwise wouldn't have done. So just be prudent, try to learn, and if you are in a precarious position in your portfolio, try to get it right as soon as possible, even if that might entail taking some pain. The market has a funny way of being pretty unforgiving to people who are relying on hope. So I'm gonna end it there, and thank you for joining.
[00:55:34] Speaker F: Hi, it's Redrum here. Before we wrap up, I want to hear from you. I've left a pinned comment down below asking, could those 18 SpaceX Falcon 9 launches secretly be tied to an unannounced AST's Golden Dome deal? Head down to the comments and drop your take. I'll be reading through all your replies.
[00:56:14] Speaker D: Thanks for listening to the AST Space Rover Podcast. If you enjoyed this episode and you'd like to help support. 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.
[00:56:40] Speaker C: Listen. Mmm, waffles.
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[00:57:13] Speaker C: 1-800-CONTACTS. I'm not giving up. I am selling the building. Only love.
[00:57:22] Speaker B: The final season of FX's The Bear.
[00:57:24] Speaker C: The restaurant is flooded. Everything's either gonna be okay— Nope, stop! —or not. We are outgunned and we are outmanned, but we have each other.
[00:57:39] Speaker B: FX's The Bear, the final season. All episodes now streaming on Disney+.