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

[00:00:06] Speaker A: This is the AST SpaceMobile Podcast.
[00:00:09] Speaker B: It will just basically come to your phone and be seamless regardless of where you are. We don't want the user even to know that it's connected by satellite. Listen, the opportunity that we have is very, very, very large.
[00:00:28] Speaker C: Good evening, everyone. I don't know if people are just watching that game. Holy crap, 2 missed kicks. It's why I would never want to be a kicker. It just seems like all downside. So tonight, you know, I don't like to think independently, so I think we're just going to talk about Redwire since we should all just sell ASTS because it went up yesterday or on Friday. And so the year is done. Everyone made 15% on a risk-adjusted basis when using the CAPM, as Kevin Mack would say, we've already achieved our alpha. So actually we'll talk about certificates of deposit tonight and where to find the best deal for your money to lock in the rest of 2026. So actually we're not going to do that. We're going to talk about FCC letters that confirm that FM1 is going well. So what I like to see is confirmation that our satellite did not explode in orbit. Among many things in terms of my fundamental process, the ability to not become orbital debris is very important in my fundamental analysis. And so it's nice to see that the company is, quote, completed launch and early orbit phase operations. So as you might imagine, a lot of people did a lot of work to figure out what that means. L-E-O-P, launch and early orbit phase. So it's a critical period of a satellite's mission after it launches from the launch vehicle. And it means that the satellite basically transformed from being a brick to being an independent functioning spacecraft. So it's talking back to Earth.
[00:02:12] Speaker B: Yeah.
[00:02:12] Speaker C: It's generating power. It's generally detumbling. These are all good things. So this is different, sadly for us, from the commissioning phase. So commissioning is where the satellite unfurls, and that is something that is tested over and over again. It's one of the key intellectual property moats of the company is the unfurling process. That's where the big phased array pops out. There's lots of pictures of this in the DD document for anyone that's new to the company and wants to check out what that looks like. It's super cool. We're tracking this pretty carefully using orbital data, and it actually reminds me to go check the orbital data while I talk to you guys. And last I checked, there just wasn't a lot of data, so you really couldn't tell. Let me just check that real quick. Um, I have a program that does this. Um, FM1, I gotta run and load the Python script. But anyway, um, we'll, we'll probably know when this unfurls, uh, before the company announces it. And trust me, I will tweet it out just to be that guy. Um, separately, while we wait for— let me just run all. Um, while we wait for FM1, we got some updates with FM2. So FM-2 arrived safely in Cape Canaveral. And so this is now in the payload processing facility of a launch vehicle provider. Now, we don't know who the launch vehicle provider is, but we can guess. And, um, you know, it's, it's not the space shuttle. So it's going to be one of the couple other providers that one might use. And I think that Tanner put out a pretty good piece today that pieces some of the various— I'm getting an error on my script, of course. God, I hate coding. But I'll do the birdwatching after this. Tanner did some good work that shows that there's some variations between the prior satellites we launched with SpaceX and this one in terms of which FCC approvals we got or not, the implication is that it might not be launching with SpaceX, which leaves really only one rocket, which is New Glenn. And I'm sure we'll all find out about that shortly, and that would be very exciting. And so this brings us to the SDA tests. And so the SDA, the Space Development Authority, I think, is our initial sort of sponsor of FM1 and FM2. And they also are maturing up other launch vehicles because they're going to need a lot of redundancy. I think as they found out earlier, you do not want to have a SpaceX-only launch capacity for the country, especially something as vitally important as space, as we find out each day. One can only imagine the types of technologies that were deployed in the Venezuelan raid. One can only imagine the type of technologies that have been deployed in Iran and will be deployed in Iran, maybe tonight. It seems like the Ayatollah is soon to get a Russian passport. But what's interesting is Katzi starts to figure out why these 2 satellites, FM1 and FM2, are in the formation that we are observing through the orbital inclination. And so we have FM2 is at a 53-degree inclination flying at 520 kilometers, And we have FM-2 flying at 460 kilometers at 50 degrees. And so this staggers them a little bit. And so the slight differences in height and angle create an ongoing relative motion between the pair, which enables dynamic baselines and viewing angles that are perfect for radar signal geolocation and emitter analysis. This is spy stuff. So confirms— well, we already know it's not a controversial point at this juncture that there is non-communication use cases for these satellites. This used to be a controversial issue. People would laugh off of us off of Twitter when we said these things 2 years ago, but now the company's won the actual studies and the awards, and we know that they're working on 10 programs of records for non-communication use cases. And so this is an example of the testing of the capabilities In what is a try before you buy situation for the government. So before they order a constellation, they want to make sure everything's working and see the capabilities. Other people that are seeing the capabilities include AT&T. So Jack Jeff McElvish, who's the COO, so a powerful guy at AT&T, went over and signed the. Bluebird 7 FM2 ahead of it being shipped. And so again, it's really important to see the highest of the higher-ups of the MNO partners taking the time to go visit the company and the facility. This isn't an ancillary sort of low-level project. This is all the way up to the tops of the companies. And that's also very important. We try to think about what is the magnitude of this? What is the importance of this technology? Is it a fungible technology or are they reliant on a special provider of the technology? And I like to see the CEOs of the world's largest telecom companies in the clean room, which is what exactly what we saw. And so AT&T is really gearing up to go. They are saying that the milestones are now really within sight and that they're going to launch beta service. Interestingly, in first half of 2026. So that tell— and that could of course be delayed. I mean, who knows? But that's what they're saying. And at this point, you would think that they have pretty good visibility. So what would Jeff McElreish have seen when he went to Midland? He would've seen 2 dozen other satellites in varying degrees of completion, more likely than not seeing 6 that are basically done. which is batch 1 and batch 2. And this is what would give them the visibility that they can start beta testing. And so I believe that what they saw would give them an extreme degree of conviction in the timing of the constellation. Timing is what had been the biggest risk that we lived through in 2025. As we know, FM1 was delayed for reasons we could spend an entire Spaces on, uh, in terms of conjecture on the delays. But that was 9 months of slip. And so the company previously, as they ironed everything out, was subject to really high slippage periods. My firm belief is that at this point, especially with finishing the larger control sat for the next generation satellite, which is based on FM1, FM2, that all, all of those critical path items are now wired By the company, the next integration issue they'll have is the ASIC, but that's going to be done within this quarter. And so I do think that AT&T really sees the light at the end of the tunnel. And then they also started to give us some other hints. The first hint was SpaceX going crazy with all sorts of announcements. And so you almost don't need to follow you know the the hashtag ASTS. All you really got to do is look for SpaceX. News releases, and whenever they start releasing a bunch of news, then you know that ASTS is about to have a big event. And so last week they went crazy with news, which means that we're probably going to announce something tomorrow. I'm starting to get suspicions that there's some golden dome type thing, and I have absolutely no idea if that's right or not, but it would fit the timing. And I really don't know what to expect. All I know is to expect the unexpected when it comes to Golden dome and how that would work. But FirstNet is the other thing to expect. And so FirstNet just actually tweeted out exactly what's happening. A strategic investment from FirstNet is upgrading the FirstNet network, blah, blah, blah, to include capabilities beyond standard communication networks. Once available, these solutions will complement and extend the reach in remote and hard-to-access areas. And they're very specific, to support future public safety-focused satellite-to-device features, including push-to-talk. So this is us. This is AST SpaceMobile that they're talking about. And so FirstNet is coming. And we also had someone actually think that they saw an advertisement for FirstNet push-to-talk capabilities from satellite, which I've linked out in the tweet. And then we also have something that was kind of interesting from ASTS Investors, the Twitter account, about 11,000 IoT devices that will be coming out through Beware, which is a publicly traded company. It's very small. It's really a channel partner for Bell Canada. And this is being offered to FirstNet clients.
[00:11:36] Speaker A: Okay.
[00:11:36] Speaker C: And so AT&T will launch the ASTS D2D offering to FirstNet clients, an existing beware distribution channel with over 11,000 devices already deployed. So I don't know how we're supposed to read that. Did they already deploy the 11,000 devices? I don't know. But in any respect, there's a lot of business that's going to come out of FirstNet that's going to come to us.
[00:12:00] Speaker B: Yeah.
[00:12:02] Speaker C: So with all this positive news, what to do? So I know a lot of us were shaken to our core to find out that Space Investor had sold all of his ASTS and Rocket Lab position because they went up a lot on Friday. Say what you will, that's just one person and who knows, but it does give rise to the natural question of, are we all idiots for owning a stock like this? Period. Are we all idiots for owning a stock like this after it's gone up so much, period? Or are we just all idiots in general? The answer to that last question, probably. But the answer to the first 2 questions, I really wish I knew, because if I knew for sure that the stock was going to go up 200% to 300% this year, well, I wouldn't have to hold Spaces. I would just tell you all that and we'd check back in in December of 2026. But because we don't know that, we have to do an incredible amount of due diligence, create weekly digests and do weekly podcasts to hear yourself talk out loud and make sure it all makes sense to yourself and to others. And in the meantime, we attract lots of bears. So I've been really trying hard to get one of these bears to come to the Spaces. It's hard. They tend to just shirk away. And so Pivotal Capital never responded. He just goes back to kind of taking potshots from afar. Stone Fox Capital wouldn't do it. He claims he's too famous because of his enormous AUM and his prolific following on Seeking Alpha. What a loser. And, you know, whatever. But then this guy Valuations came out of the blue. So this is a holier-than-thou individual for sure, thinking we're all just a bunch of idiots. But that said, he's entitled to his opinion and, you know, Granted, you know, if you have a handle like The Kook Report and tweet Calvin and Hobbes cartoons, I could see at first pass how he's arriving at his conclusion. And then obviously when he interacts with Anpanman, his conviction that we're idiots is all but certain because— do I need to say more? But he did actually— I guess he goes to bed early— but he did actually respond with some points after reading the write-up. So I actually appreciate that the guy took the time to do the write-up. And he has been viscerally attacked on Twitter. So I can also appreciate how he's like, you guys are a bunch of jerks and you're only solidifying my belief that this is a rabid community that I want to short.
[00:14:27] Speaker B: Fine.
[00:14:27] Speaker C: But he does actually give us some points. So for the benefit of everyone, he says, I read your write-up and appreciate the thoroughness.
[00:14:35] Speaker B: Great.
[00:14:35] Speaker C: But he has pushback. Fair, as anyone should. And so he says the wholesale model is not great. MNOs own the spectrum and the customers and thus have all the leverage in future negotiations. It's a free option for them and all the risk and CapEx is on ASTS.
[00:14:50] Speaker B: Okay.
[00:14:52] Speaker C: Well, uh, where to start? So wholesale model is the only model. Um, so whether it's great or not, let's put that on the side. It is the only model because if you went direct, ASTS would be bankrupt because that means that they would have to go acquire all the customers for people, and I don't know how that would even work. Um, you'd presumably still have to make it work with MNOs, so I'm not going to go drop AT&T to become a SpaceMobile customer anytime soon. I can't imagine. And so without a partnership with the MNO, this is kind of dead on arrival because it just looks like Iridium, and clearly you're not going to go reinvent the Iridium model just with space-based Broadband and then go advertise on NFL games of like, hey, you know, become a— you get Ryan Reynolds to start hawking mobile plans. Tough. So because the direct model, in my view, just doesn't work, that leaves the wholesale model. So then the question is whether it's great or not. Well, time will tell. What's— what is great about it is the reach. It allows us to access through channel partners 3 billion customers. Costlessly. And then someone like Valuations will point out, well, it's not actually costless, Kook. And he would be right. And so the cost comes in the revenue share. That is our CAC, customer acquisition cost, C-A-C. Very, very important concept to anyone that's not coming from a financial background. It is, it is the most important concept of really anything I'll ever talk about because CAC is really the unit economic driver that determines whether your business is viable or not. And so because we have revenue share, our CAC on our own balance, our own income statement is zero because the customers are acquired by our MNOs. That's a vital thing. So then it comes down to, well, the MNOs own the customer. That's super important. They own the spectrum. That is super important. And so yeah, the MNOs actually have a lot of value they're bringing to the table. But what they don't have is the technology to deliver the service, and they don't have the prospects to ever make it work economically. And why is that? Is because this is a multi-client economies of scale business. AT&T, in their own words, they've actually said this in their Analyst Day, it makes no sense for them to do this because they would only be able to use it in the US. And then you would have a constellation that's flying over the rest of the world that's Dead, not monetizing. Doesn't make sense to do it. Makes sense to have a third party, a Switzerland, do it so that that company can also spread the fixed costs over other customers across the world. That's exactly what happens. So that in itself creates leverage because ASTS, all else equal, should be able to create a constellation, an effective constellation over a single country or MNO area. That is many, many, many times, as multiples times cheaper than it would be to build your own constellation. And so, for example, from AT&T's perspective, to build a constellation for $3 billion, they're only monetizing their 100 million subs. ASTS can build it, same $3 billion, assuming AT&T had the capability to build an and operate a constellation, which they do not, is not their core competency. So it's really a hypothetical here, but then ASTS can charge that same price for an indifference point for AT&T for the 100 million subs, but then they get the rest of the world for free. So then what ends up happening? ASTS is going to offer AT&T a deal, split the difference. So AT&T is way better off than doing it by themselves, even if they could. And then ASTS is way better off too, because they get to also monetize the rest of the world. So the wholesale model to me is actually the commercial innovation here that makes— is the only reason I own the stock is because they identified the wholesale model. So interestingly enough, his whole point, his first point of the wholesale model not being great is actually the entire reason I own the stock. So it's an interesting line in the sand here where I, I have a view that I think is really well supported. He has a view, which I'm not going to take away from whether he thinks it's supported or not, but that is his view and you should have your own view on it. And then he goes, the if and unless section underestimates execution risk. They've got a very long way to go before it's safe to assume this tech will work. I also doubt the 7-year replacement estimates. So on the 7-year replacement estimate, I think that that's just math. And so Because they're launching at higher orbital altitudes. I believe that's in the ODAR and the Orbital Debris Assessment Report. And I don't think that's a controversial thing. I generally, my brain just used 5 years anyway, but let's not die on the depreciation hill. This is not Michael Burry's AI short yet, although that will be freaking lit if Michael Burry is short of the stock at some point. I look forward to that day actually. So then he talks about the execution risk. I agree with him. I don't know if I underestimate it. I feel like I've lost years of my life living the execution risk. So I personally believe the bid-ask spread on this second bullet point is what I started off the call with, is AT&T has seen that now they've been able to shake down the production line. And this is the constellation constipation concept I've talked about really in my own kind of Henry Clay way of using the oratory skills I was gifted with by relating things to bowel movements. But I do think that it is a mistake for someone to look at how hard it has been for this company to launch satellites over the past 4 years and extrapolate that forward. Now that's on us. And so there is a lot of execution risk. And if they, if ASTS messes it up, we're cooked on the stock. So from his perspective, shorting this execution risk is actually a pretty rational thing to do because most companies blow up on this. And we've done a lot of work to suggest that, oh God, am I going to say this? This time it's different. This is where I'm probably just going to jump out the window for actually saying that. But it is actually, this time isn't different. Actually, I don't want to say this time is different because that's bad juju. This time is not different. This company almost went bankrupt. This company is years behind schedule. They burned way more capital than they thought, than we thought, because execution risk is high, was high, and the realization of that risk actually occurred. And so had it not occurred, our share count would've been 200 million shares. So I think we already lived through it. Is my personal perspective. We lived through it, we experienced it, we ate it, and it sucked. And so what's interesting is the shorts who actually had that thesis were right. The execution risk was high and the company did take it on the chin, and yet the stock is damn near at all-time highs. So that's the thing that I'm always surprised by is if I were short, I'd be really humble to that of like, I was right on all of these things. Like the company was delayed, they diluted more. And yet I'm getting my ass handed to me on this stock. What am I missing? That's what I'd be asking if I'm a short. So the next thing he says is Golden Dome stuff is all hopium. Shouldn't factor into a model as of today. Pure speculation. Fair. I think we might get it tomorrow, but I've also thought that for many mañanas. I am the land of mañana when it comes to Golden Dome. And so I could be wrong. Maybe we don't get anything from Golden Dome. Maybe it comes in a way that is unrecognizable to us. Golden Dome was not even in our mindset a year ago, and now it's obviously something that is better than coin toss that we get. So I would just say, fine, take it out of the equation. This investment does not depend on Golden Dome, period. So we'll concede that point. Golden Dome is hopium, even though I think we get it. And then underestimating the threat of SpaceX. ASTS is paying SpaceX for the privilege to exist. Well, I don't, I mean, what? And so, yeah, sure. SpaceX can't just raise prices. So that's anti-competitive behavior and they'll have an FTC problem real fast. And it's proven out. SpaceX does make launch capacity available to them. And I don't know that they have unlimited capital because they raise capital and, you know, so I think we actually might have more cash. And I don't know that anyone's really underestimated the threat of SpaceX. I think that's one of the things we've focused on the most. It's fair. That is a big threat. And, you know, there's lots of ways that that threat will manifest itself. And certainly it's the thing that if you were to say, hey, what is the most obvious risk to ASTS? It is probably other than the risk is itself. The risk is SpaceX. So I think that he's fair to say that. I don't think we're paying SpaceX for the privilege to exist. We have other launch providers. SpaceX is a commodity launch provider, launches for everyone, including Kuiper, which is Amazon and Blue Origin. So it's mortal enemies. So I don't know that we're paying to exist, but SpaceX is a big competitive threat when looking at it in simple terms. When you peel back the onion and think about how the spectrum relationships work, how many MNOs have already signed up MOUs or DAs with ASTS, the SpaceX threat dissipates very quickly for those of us that have spent a lot of time analyzing it. But his point notwithstanding, it's a fair one to bring up. Then he goes, I think the 10% penetration and $5 ARPU in developed markets should be the bull case. And that's assuming the thing works, fair. He just fundamentally doesn't believe there's demand. Good bear case. If this ends up being a niche product, if the attachment rate is very low, if there's really crappy pricing, then the economics on the constellation is not going to be good. And so is, would I own ASTS if I thought this was going to be sort of like a 5% return on asset business? No, I would not. That would be— it would be terrible. It would not trade that well, and I would not own it. So if he's right that there's going to be a low attach rate and that the average revenue per user is low, then this will not be a good business. I'm using, uh, $2 effectively of ARPU. And, um, so I think I'm pretty good at my assumptions, but yeah, this has to be— this this has to be proven out. So I, I'm glad that he engaged. Um, he took the time to, to read the write-up, which is generous of him. Well, it should be obligatory of him to understand what the bull case is if he's short the stock. And, um, and I want more bears to, to chime in if they have actually, um, you know, opinions that they want to express in good faith. So I appreciate that he did that, and, uh, I'm going to be nice to him on Twitter. For now, uh, to encourage that, uh, type of dialogue. Next we have Stone Fox. So Stone Fox would, would not show up on the, uh, Spaces. He declined his, his cherished invitation. I actually haven't invited a lot of people. Like, I don't invite, uh, Ant-Pan Man to speak, et cetera. He just crashes it from time to time. But, um, I did really want to get Stone Fox on here because he didn't. And now because we have AI, which is a crazy thing, I just trained an AI on him and because Grok has access to everyone's tweets and to Seeking Alpha. And so I just asked Grok to write a speech by Stone Fox in an unbiased way that is true to his opinion. So didn't prompt it to be a jerk. And you can read it. It's, I was going to actually have an AI voice read it, but I think that would've been too hard. And so really his thing is that delays, delays, delays. They hadn't launched any satellites until FM1, and he's worried about future dilution. What else? Competition and then valuation. He thinks it's a high price. And so does that other guy at Valuations. They think this is priced for perfection and That's a fair comment too. You know, $40 billion market cap, that ain't nothing. That is not being priced as a binary option at this point. That is the market saying, we believe, we still have more we want to see, but we believe. And so the risk, I don't want to say risk return because that's taking a position on what this could be worth. And obviously the risk return In theory of a stock that's at $80 versus $2 is different. But that's an interesting thing I just said, if I could say so myself, because the risk at $2 was extreme because it was going to go bankrupt. The financial risk of this company at $80 is very, very low because they have $3 billion of cash. I don't want to say zero, but it's effectively zero now because they could just go raise another billion dollars tomorrow if they wanted. And so then we start to think about, well, what's the return too? So the risk has gone down quite a lot, but if you held return constant, then you'd say this is a materially worse investment, all else equal, than, you know, just a couple weeks ago. And certainly it is because the return profile hasn't changed a lot in the past couple weeks. But I, in my humble belief, we have what could be a real platform stock. And so a platform is a stock where there's a very difficult way to understand what something's actually worth. And that's a concept I've really become humble to. When I started my career, it's usually like, well, figure out what something's worth, you know, what, you know, NAV, and like close the gap to NAV because everything is fixed and static and it's really all just rate of return driven. And then what I realized is there are a lot of people that would own stocks and the upside of that stock would just go up and up And up, and because the company itself changed. And I think that Tut one time said something interesting. He went, you know, Jeff Bezos didn't look at a target price when he was selling books. He wasn't looking at a target price when he started selling electronics. He wasn't looking at a target price when he invented AWS. He just had his head down and he was cooking. And so they just created more value by expanding the business. And so to me, an interesting concept is to think about just the platform and whether or not as a partner of a company you continue to expand your business opportunity over time. Because then that's where a stock really— there's no price to sell. Like Microsoft keeps expanding its business opportunity over time. Google expands its business opportunity over time. There's a lot of stocks that have basically just gone up forever and What was the target price? Well, there was none. The right time to sell many stocks was never. And I'm not saying that that's true for ASTS, but it really complicates the idea of what it's worth because I didn't understand the ability to have guard bands utilized for ASTS, effectively a national redundant network. I didn't understand the non-communication use cases of this company. I didn't understand Golden Dome. It didn't frankly exist. There's a lot of business opportunities that I either didn't understand or did not exist at the time that have since evolved, which expands the TAM. The entire government business wasn't contemplated during the SPAC merger. That's all found value. So that shifts everything up and to the right, and that's what makes kind of target price Stuff very difficult. I've kind of resigned to just thinking about big numbers. And so it's like target, sort of like what are really successful things worth? Well, really, really successful things are now worth, you know, a couple trillion dollars. Pretty successful things that could still be stocks that people don't even know exist are in the $50 to $100 to $200 billion range. That's kind of my intermediate stop on ASTS to reevaluate, the upside. And those are still pretty big numbers. We're talking $250 to $500 per share. And if I didn't think that, I wouldn't own the stock. And so it doesn't mean I'm right, it just means I wouldn't own the stock. So let's get back to fundamentals. That's talking about the bears. I might have rambled on for a little bit of time, but I'm going to keep inviting these people on and maybe one of them will take me up on time to kind of present to the group. And I know a lot of people really want to hear that. So we have in Australia, actually where I just was, is mandating D2C. And it's bringing an interesting issue because in the regulatory dockets, the other MNOs are highlighting that they cannot do it. And so Telstra, which is one of the really big providers, is reporting that they actually can't meet the mandate. Unless they add new spectrum to the standards. And it ends up being a pretty interesting issue because when ASTS is up and running, all these MNOs could then meet the mandate just by being customers of ASTS. My belief is that's probably what will happen. I think the MNOs are going to go, well, we need to solve a regulatory fix fast. This company can do it. Let's just go with them. And so that's what I believe is going to happen. And then I also just screenshotted as we kind of explored with Grok what this means. And so what they're asking for, what the other MNOs are asking for is NR NTN, which is a different type of 5G technology. But the issue is that it's not adopted yet. And so it requires all the global players to adopt it for compatibility, costs money with R&D for chipsets. You got to upgrade satellites. Got to integrate into the network, billions of dollars of investments. But then it would help them handle voice over the SpaceX system. Well, you could just do voice over our systems. That's what I believe will happen. But it is interesting where the regulatory regime actually raced ahead to a capability that only one company can apparently meet. And when I was in New Zealand, I was just amazed. Like, well, I'm not amazed. Turns out when you're in a country where 30% of it is set aside for government land reserves, they don't have cell phone towers. And so most of that country, when I was there on the South Island, there was no cell phone service. And it's a place you really want cell phone service because if your car breaks down, you're kind of screwed. And Australia, same thing, obviously, once you're out of the big cities. So next we get to some patents that ASTS filed. Again, I included a summary of Kat C's very long thread to try to simplify it a little bit. But the crux of it is that ASTS solves an issue of how to basically make the satellites compensate for the complexity of having something flying around at 17,000 miles an hour oscillating through extreme heats. And so this is a way to calibrate. the satellites so that the radio frequencies are actually accurate. And you can explore, this is some complex stuff and you can explore it for yourself in that tweet, which is titled The ASTS Patent Moat. Katsia is at the conclusion this is an extreme technology moat. I have no reason to believe he's wrong and let's hope he's right. So next we have the SDA. We talked about the SDA earlier. This is the onboarding ramp for Golden Dome, among other programs. And this is where TUF4R starts to chime in and talks about some of the things we could expect from FM1 and FM2. And so the milestones that you need to achieve are, you know, having it actually work. And so being on orbit, well, we have that checked now. then you have to demo it, show the data, blah, blah, blah, and then they close out the assessment. And then that's really meeting the requirement for Halo, which then allows you to be kind of an accepted technology. And we believe this is the pathway to lots of interesting government business. Other government business we can expect, I believe, is the space AI stuff. And so New York Times put out an article just showing that This is really topical. I don't know that there was a whole lot in this article, but I pasted, thanks to some other space mobbers, they took screenshots of the physical paper because I don't subscribe to New York Times. But the title is AI in the Sky: Space is Seen as a Data Site. Well, this has obviously been a very contested discussion topic on X, people working through the math, this and that. I've kind of just simplified this, that there is a market segment that's willing to pay a pretty high price if you can do it. And we believe that ASTS can do it and should be able to do it most economically because it generates the most power. And so I've had some difficulty making the math work so it's more economic than a terrestrial data center. Some pretty smart people like Elon Musk think that it will be, and we'll find out. There's a lot of assumptions that go into that. And some of them look pretty convincing. But in the meantime, you could only imagine the US government and military applications are willing to pay a very different price for on-orbit compute. And that's something that ASTS is likely to be very well positioned for, especially with things like Golden Dome. Things that are not in a good place is Globalstar. And so they're In kind of an— I haven't really followed them frankly that closely, but they still haven't launched their new constellation, which is being paid for by Apple. And it's kind of unclear, we're reading through the lines here, it's kind of unclear whether Apple is trying to wiggle out because now they see all these other things coming. Do they really want to spend all this money for an inferior solution, this kind of stopgap? We'll find out. So the Globalstar saga, I don't think is over yet. And they have some spectrum. We'll see what happens to them. But the immediate fight for AST SpaceMobile is really just the back and forth with SpaceX that tries to FUD it in the FCC filings. I think all of this will be unsuccessful, and so I think it'll just be a walk in the park at the end of the day. To get the approvals that are needed for the ASTS constellation, but Cassie does a great job. It's linked out here. Just pointing out, you know, really what to make of these things. But it's interesting too is some of the inconsistencies of SpaceX's positions. SpaceX has also changed its position in not only the legal arena but the orbital arena, and so they are trying to change. their satellites, or they are lowering their satellites from 550 kilometers to 480 kilometers to help with their link budget. And so Elon is quick to say, this is great. It is greater than operating at higher orbits for them because their satellites don't have good power and bad beamforming capabilities. So it helps them actually have more functional satellites. Where it hurts them is orbital decay. So going back to the @valuations bear case on the 7-year life, when you're flying lower, your life is also lower and it's nonlinear because as orbital drag picks up, it's sort of like, yay, we're going, oh, we're crashing. If you're at a high orbit, you will stay up there for much longer. It's nonlinear because of the way drag works and gravity. As Sylvester Stallone famously said, gravity is a bitch and it always wins. And so they're having to fly lower and that has some problems. And so we've talked about this quite a lot. I've said maybe a year ago that this is going to be an issue that people really hone in on probably in 2027. So once you're past the sort of does it work phase, is there demand phase, and then the market is arguably sort of comparing 2 companies, there's going to be a big dispersion for one that has much higher free cash flow conversion than the other. And so what comes to mind for me is looking at SaaS companies, which I don't really do anymore, but back in the day you'd have a lot of companies with ARR, but some were just terribly inefficient. And so the CAC to LTV was not good. There's a tough sales cycle, something like that. And those would trade, you know, whatever, 3, 5 times sales even in the peak. And good ones would trade, you know, 15 to 20 times sales because ARR is not created equal. And satellite ARPU is also not created equal. If your satellites have to be replaced every 3 to 5 years and you need twice as many satellites, you are not capital efficient compared to the other guy who has to replace only 15% of their fleet per year. And can operate with a fraction of your satellites. So that's something that I think is a harder thing for people to appreciate right now. It's very abstract, but once we're starting to deal with operating cash flow and these dynamics, that's what I think people will hone in on because the business quality will matter. And that low orbital position of SpaceX is going to cost it. And that I do believe will matter. But in the meantime, we're still in the traction phase. And so SpaceX traction, never mind the orbital issue, is crushing, or as Tim Ferriss would say, is missing numbers. But the numbers are really, really high. And so Miss Schmiss, they have a lot of customers. And so I've pasted the progress report here. And by all accounts, SpaceX is doing pretty okay. 9 million customers, tons of airline customers, tons of cruise passengers. I mean, look at these numbers. So they have 21 million airline passengers served. They have 20 million cruise passengers served. So that airline number I think is going to skyrocket. We just think about that for a second, just the reach on cruise, which you would never think is a big market. It seems amazing. And I don't know what the right ARPU is to put on, you know, really the accounting principle of customers reached. So I don't know if that means that customers that actually signed on with the service, if you actually had to have people pay for the service, you know, what would that attach rate be? Way lower. Who knows? But you're actually starting to hit some massive numbers in what otherwise I think would be commonly believed to be niche markets. And so it's just showing to me, it just shows that there's a huge market here. And if you're able to reach people in the lowest friction way, I think that the numbers are going to be really big. And I hope they are because at, you know, the expectation of having a triple-digit stock that doesn't start with a 1, you need those numbers to be high. So lastly, Second, lastly, the penultimate tweet is a Bluegrass Capital overview. So for your reading pleasure, here's sort of a report that they wrote about the stock and their investment. You could just see if that matches up with yours. And then the last thing was there was a failed satellite launch, SpainSat NG. They had an anomaly. It was hit by a space particle. That is pretty unfortunate. But it was insured. And so they got $400 million back or will get for the loss of their satellite. Only reason I point that out here is one would think just the law of probability suggests that at some point ASTS will have an anomaly with a satellite. Depending on when that happens, it will either be a dramatic thing that we'll have to have, you know, 15 spaces hosted by NPMN to address, or if it's later in the constellation deployment, literally no one will care. But the way to solve that is simple. Just have a lot of satellites because then it's just really not that big of a deal. But as Scott has said, they do insure the first 15 minutes of a satellite's life, which is really from ground to orbit on launch. And so if then you get a bad launch or you get some anomaly in the initial separation, then you'll at least get your $20+ million back, which is Better than nothing. So that's what we have for this week. I hope everyone had a good New Year's week. It's all blurred to me. I'm still so jet-lagged. And I think that Scott will probably come out this week swinging. Maybe he'll wait till next week just so all the New Year's stuff can settle, but I am personally expecting him to come out in the next 2 weeks, I'll give myself some room, saying that they have reached satellite production capacity of 6 per month. And that makes sense now that I'm talking out loud. That makes sense to actually announce that when they actually ship batch 1, because that's the proof in the pudding. People are gonna be like, yeah, yeah, yeah, you're manufacturing 6 per month, yet you've shipped 2 satellites in the past 15 months. Yeah, give me a break. Um, but actually if batch 1 comes out the gate, that's when I would say, and now we're actually producing at 6 per month. Thank you very much. And that will be, I think, a very seminal moment for the company. What it does for the stock price, I don't know. I mean, stock price went up 15% on Friday, so maybe that was discounting that. Who knows? But that is really important. We're going to get a launch date for FM2 pretty soon, and I hope I can make it. That'll be really exciting. We're going to get the deployment of FM1 probably within the next month. cutting it. And FirstNet is making it pretty obvious that we're going to get a FirstNet deal. They really kind of said that explicitly. So there's a lot of interesting things to think about. You know, in the meantime, you know, who knows how the macro is going to evolve, you know, with regime change and things like that, which is actually pretty exciting when you, I guess, depending on your perspective of it. But I wish everyone a great week and keep all the research coming. I'll make sure to collect it. And if you ever see something, people already do this, but I think I would just be explicit. If you see something really cool about ASTS, just me so that it shows up in my comments and there's a higher probability of me finding it so that I can include it in the weekly. And I appreciate that. So everyone can have the benefit of it. Take care, everyone.
[00:46:21] Speaker B: Bye.
[00:46:21] Speaker A: Thanks for listening to the AST SpaceMobile Podcast. If you enjoyed this episode and you'd like to help support the podcast, please share it with others, post about it on social media, or leave a rating and review. To catch all the latest news about AST SpaceMobile, make sure to subscribe. Thanks again, and I'll see you next time.
[00:46:46] Speaker B: We're doing something very, very big, and I think with this technology we can really affect billion lives. Safety Space Mobile is the only company that has proven technology to deliver cellular broadband connectivity directly from space to the everyday smartphone. People will just basically turn on their phone and be seamless regardless of where you are. We don't want the user even to know that it's connected by satellite. Our role is to bring this into reality, always in partnership with the NMO.
[00:47:22] Speaker A: Listen.
[00:47:22] Speaker B: Mmm, waffles.