Why SpaceX Secretly Fears $ASTS (Insider Call Leaked)

[00:00:02] Speaker A: Okay, thanks for joining. Sorry, I was running a little bit late. I went for a surf and sort of got rolled in the backwash, but then I had to put kids to bed before they go to school tomorrow. So anyway, that is why I am 10 minutes past our normal start time. So this last week seemed like it was gonna be pretty slow. It was kind of a question of what would What would change that? Because what I've been pretty surprised by, and it's almost been two years now since I started doing the weekly, I believe it was in 2024. Thinking this is when the velocity of news really picked up into I think it was block one, and thinking well gosh there's so much going on this week, you know I'll just condense everything into a weekly so people can really absorb it. But surely. this will die down in a couple of weeks and that'll be it. Here we are almost 100 weeks later, and even in the middle of August, there's still enough company-specific news with ASTS to justify a weekly newsletter and a Spaces. Hopefully it won't be a full hour. I'd love to go to bed, but I don't write the news, so ASTS kind of determines how long I talk. So the first thing to start with is just what's coming out of the government. And so there's a lot of things that the government can talk about. We can talk about all sorts of programs and initiatives and things like that. Well, what the White House did on August 20th is the National Space Transportation Policy. And so the government is really seeing this as a seminal opportunity to advance American technology. In there is some interesting details. First and foremost, this is about launch capacity and making sure that kind of the US is the leader in launch capacity. From launch capacity stems all other capabilities. You could have the most incredible beamforming technology in the world, but if there's no way to get your satellite into orbit, then you're really just stuck with putting it on top of a mountain, which we all know would be far more economic than launching satellites into space. But that really is a conversation for Hamad, Hamid, and I on another day. So we immediately had Brendan Carr chime in saying, boosting the space economy is a key pillar of our Build America agenda. I agree. And then what was neat about this is in the text was not only launch, launch, launch, which launch is cool, but also to support ubiquitous satellite-enabled communications for global broadband internet access. And so this is really, to me, one of those once-a-decade type of things that I tried to be more sensitive to. I was never really that smart in the capital S smart way when I was like 15. But in hindsight, when Bill Clinton was really putting the initial machinery behind the US housing market, really juicing Fannie Mae and Freddie Mac and things like that, that was something that a smart person could have observed. And I remember really clearly sitting in my kitchen I watched CNBC when I was a kid, explains a lot. But there was this guy that came on and said, this must have been in the late '90s or early 2000s, and said, China is going to be really big and they're going to use a lot of commodities. And I vividly remember this because the guy, the analyst was very humble. And this was in the middle of the internet bubble. And so literally the last thing people want to talk about is oil. And I remember this Jim Grant cartoon. Jim Grant is a really prolific writer. I don't know if people really follow him anymore, but he was an old Barron's writer. And then he started this newsletter called the Grant's Interest Rate Observer, which was really a must-read for all sorts of value investor event guys that I rolled with in New York at that time. And I remember this cartoon. He'd always have a cartoon every month of this guy and it says, who needs oil? We have the internet, which of course was satirical. And this was of course when oil was like $10, Exxon traded like death, and people really thought like, who needs this stuff? We have Global Crossing and we have the internet. And if you were really prescient, you would've realized that China entering the WTO was going to unleash this monster of capital investment and consumption. And sort of shame on me. I was in China in 1997 in Shanghai when at that point, there was the most cranes of anywhere in the world. And I was a teenager at the time, but you should have— you could have been able to put one and one together and realize their demand for aggregate, oil, steel, everything is going to be absolutely dwarfing anything we could have possibly thought about. And so a lot of times these groundworks are really set and they're in what we could call the tooling phase. And so very early where all of the signs are there if you're very focused on it, but the knock-on effects and the broad realization of what's happening has yet to come. And so the die was cast for Chinese oil consumption far, far in advance of Of even things like when Hurricane Katrina hit, which I remember vividly, and oil I think went to like $30 or something, and people were going crazy. Um, they think, you know, this isn't— you know, this is wild and unsustainable. And then sure enough, in 2007 or '08, when SemGroup blew up, you had oil go to like $148 or something. And, um, you know, the world just didn't have enough. And like Met Coal, things like that, the price impact came far later than what was visible in the tooling phase, which is really where the quote unquote experts would have picked up on something or people really focused on an early trend. And so people are like, Kook, you're talking too much, man. We're here to talk about AST. Here you talk about Metcalf. What the fuck is Metcalf? You know, it's like they're on the wrong call here. You know, I'm going somewhere, guys. And so When you have something like a presidential directive, this is something which philosophically I can actually disagree with. I really don't like it when government puts their thumb on the scale because it usually relates in a lot of distortions. But in many instances, the government wants a distortion. The government wants to have a crazy supply impact because there's something they want. They want something that is requiring more than a price price signal to get it done faster. And so here, similar to the US government wanting low mortgage rates, the US government is putting their thumb on the scale saying, we are going to make it an unfair fight to have more, not less space capacity. And it's interesting because we could easily sit here, or not us, because we're obviously all really into this stuff, but the general person could go like, well, space, I don't get it. Like, what's the space economy? You're really not seeing the bigger picture. And I was reading this book by Mark Pincus last week, and he also kind of said this, like, I never really understood the space opportunity with SpaceX and things like that. He's a consumer internet guy, and fair, he didn't see the bigger picture. And I was watching this movie when I was flying back from Europe, First Man, and it was a great movie, by the way, with Ryan Gosling, who was, I think he was Neil Armstrong chronicling the Apollo 11 mission. And you can kind of see all the— I wasn't alive in the '60s, but all the debate on like, is this the right use of government money? What are we doing? Just sending some bros up to space for what? And Ryan Gosling made the argument as an actor of, this really sets the stage of being able to see things we couldn't see before. This is a science project now, but this is going to have industrial unlock later. And look what happened down the line. The government program gave rise to and really enabled things like SpaceX and Blue Origin and all the others to come after. And we're only at the very, very beginning of the commercialization of space as we know it. I certainly am not a futurist capable of really understanding what will unfurl from this point on. But what I can see is really kind of what's out in front of me. I can see no further than the distance of my hand to my face. And what I can see is the telecommunication opportunity. That was always very clear. What's become more clear, although hazy, not clear eyesight looking out this far, is the AI data centers in space. Because to me, I go, well, look, right now space is kind of an electricity problem. And what is needing an electricity solution? Well, telecom, because You're creating RF signals, and then compute. Okay, those are 2 things that need a lot of electricity that can be solved in space.
[00:09:32] Speaker B: Great.
[00:09:33] Speaker A: But there's gonna be a lot of other things. I don't know that I'm on the camp of space pharmaceuticals and things like that. I just don't know. So when the government puts its finger on the scale like that, what's going to happen, if history is a guide, is it's gonna cause undue flows of liquidity. And this is really what's important, is to be ahead of the puck, so to speak, of where liquidity is going to go. Where is the price signal that is being created? Then get in front of it, because if the hot ball of money is going to slosh somewhere, be there, because it's awesome when that happens. And so that's exactly what happened in the financial crisis before it was a financial crisis, is the government put their thumb on the scale. artificially created a price signal around mortgage rates, and then more money than anyone could have possibly comprehended went into it. And let's skip over the resulting crash and stuff like that, but this is why the government pricing is really important. So let's see what I was going to talk about next. The next thing was some comments from a SpaceX expert call interview, which is actually interesting. There was a TIGAS call that came out. I thought it was fascinating. The person was very transparent. Um, the one kind of punchline is that SpaceX just systemically has dismissed ASTS as a competitor. Um, they just never thought or think that the company is going to get the manufacturing capabilities to get the constellation up. And so they sort of dismissed it as a cool science project, but surely no one can have the industrial capacity of SpaceX. Therefore, we're not gonna take them seriously. For, you know, for all we know, SpaceX could still be right. There's still a lot to prove by AST SpaceMobile, but it is interesting to see the ways in which ASTS is dismissed by its largest competitors. When you also then think about what type of competitive response they were planning and when they were planning it. And if it was sufficiently long enough ago to be a real challenge today or tomorrow. And I think the short answer is they did not anticipate ASTS, and the resultant response was inadequate. But they really kind of talk about how ASTS just all of a sudden, as they would say in Spanish, de repente. Burst onto the scene, and then all of a sudden they could do it. And the telecoms had dismissed this, and then all of a sudden they could do it. But then they were like, "Whoa, whoa, whoa, whoa, whoa! Is this a threat or an opportunity?" And as they kind of waffled on that, all of a sudden SpaceX rose their hand and said, "Call on me, call on me." And the MNOs called on SpaceX. "All right, SpaceX, what do you have to say for yourself?" SpaceX stands up in the crowded room and goes. I'm a threat. And the M&Os went, oh, STS, what do you want to say? And STS is like, well, we actually have technology that works. It's way better and seamless, and we're going to work with you and be super friendly and not hold you hostage with massive upfront payments. And we created the category. It's going to be huge, and we're not going to disrupt your business. Pretty cool. So a category creator But then the acceleration of the category adoption was because the most threatening company that could possibly enter the scene, SpaceX, then overtly went and told all of the would-be customers that no, in fact, they will not partner with the would-be customers. They are in fact going to challenge and disrupt them, which then promptly causes every MNO to throw all of their weight behind ASTS, massively facilitating rapid adoption. But more importantly, or equally importantly, These are the same MNOs that control all of the spectrum standards. So guess which spectrum standards they are going to support by consensus, and guess which ones they are going to try, try to stymie. ASTS has an easy pass, and SpaceX is going to be paying with pennies on an I-95 toll booth in a storm. That's kind of funny. And so the chessboard here Really kind of is summarized by what Ampanman has said, and he just went, you know, funny enough, the best thing that ever happened to ASTS was SpaceX entering as a competitor because that move on the chessboard totally changed the behavior of the MNOs. It created urgency. It created consensus. It resulted in action. And so that competitive chessboard is funny, is the thing that caused most people the most anxiety, in fact, was the accelerant that ultimately likely is going to be the cause of the company's success. And You really couldn't have ever anticipated that, if we're being honest, but that's sort of my current thinking. And so then we got some more tidbits with this. And so really at the end of the day, ASTS is a friend with benefits to the MNOs, whereas SpaceX is just an overt jerk. And so SpaceX is used to having monopoly power. The funny thing about monopolists is they don't transition very well into non-monopoly markets because they know, like a bully, only one course of action. And so you always need to understand an opponent that only really has one playbook. And I'm trying to think, because I do remember in my repertoire of memories, which seem to fade every day, Some CEOs I've dealt with, at first, they really beat you up and they outmaneuver you. And then as you go through cycles with them, this happens in private markets where there's truly no escape, like you're stuck with them, that you realize they only have one playbook, sort of histrionics, ultimatum, fake ultimatums, just blah, blah, blah, whatever the playbook is. But sometimes you can realize that someone only has one MO. It becomes very easy to beat someone when you realize that they have one playbook, but no fallback. SpaceX has one playbook, which is, we're SpaceX. This is what we want. Who the hell are you? Not only are we going to disintermediate you and we're going to tell you we're going to do that, but in the interim, give us all your money. And the SpaceX guy literally said that. And so he said, that is what they do. And SpaceX was evaluated by Verizon, AT&T, and Vodafone. They talked to all of them and they went with ASTS because, quote, ASTS has a much more friendly approach in the revenue share models and seems to be more of a partner than a competitive threat. Gwynne and Elon talking in their earnings call about going after MNO customers proves that out. Now SpaceX is seen as a threat. It, I think, makes it harder for SpaceX to enter these partnerships agreements with the MNOs. Now go figure, when the $2 trillion market cap company says they're going to go after and starts to make fun of the legacy incumbents, do you think those legacy incumbents are so stupid to then hand over their businesses to SpaceX? No, of course not. And so the The path from here gets really exciting because we know that our competitive position, this isn't just about technology, it's about commercial moats. We know that our commercial moat is very resilient because these MNOs are probably going to really do anything in their power to not partner with SpaceX. So absent that, who else do they have but ASTS? No one. So this reiterates, and we'll get to it in a minute, this reiterates why my very, very strong belief is that T-Mobile is going to drop SpaceX and go to ASTS. And that's sort of the pressure release. I really, A, have absolutely no idea when that will happen, but B, when it happens, I have no idea what the stock price response is going to be. But I really hope it's one of those days where the stock is up like 50% to 70%. just so that we can all do a trade parade and be really happy on the internet for a brief moment in time. And so partnering with ASTS is the logical choice. And so I really recommend people reading all the things that Anpanman and some other people have shared in the last week, which I've linked out. It just gives you a better picture of what it's like from the MNOs to deal with SpaceX, being asked to do upfront payments, to give guaranteed payment per sub, things like that. Versus ASTS, never mind the technology differences, but ASTS doing revenue shares. So it's really kind of like a free option for the MNO. It's not being held hostage. And so then what happens? Of course, Vodafone Portugal announces pioneering agreement with Satellite Connect Europe to launch satellite mobile connections in Portugal. The dominoes are falling. ASTS is getting all the deals. And so did the stock move on the Vodafone Portugal announcement? No, of course not. That would be too logical. And so this is life as an ASTS investor. All good news makes the stock go down because we repent. We are stuck in purgatory. But at a future point in time, undetermined, all of this wiring, the tooling phase as I call it, this will burst onto the scene. The tooling phase is currently what we're seeing. The wiring, the hooking up, what will result in this massive revenue generation down the line. That part is now. That part's not very visible. If you are covering 40 stocks, living your life as one of these pod guys in New York, it's just very unlikely you're going to have the mental space to be thinking about all this and having the right sort of spirit vision toward how this results. It's very hard to have that type of clarity. And it's something you always want to reach. I've tried to have it. I remember when I was looking at Joby, for example, I was driving out to the mountains and all of a sudden, I had a fleeting spirit vision where I was like, okay, I think I get it. I started to see some similarities to build out of Tesla, but then my spirit vision disappeared because then I really couldn't really figure out how the unit economics were going to scale. Maybe that works, maybe it doesn't, but I was really struggling to get that vision. I had it for a moment on Joby and then I lost it. I don't own it. I tried to do the same thing with Merlin, I don't know yet. Maybe it's interesting, maybe it's not, but haven't had the vision, don't own it. And it's very rare to connect with a stock where you really see what the future can look like and how that tooling phase will result in the big bang kind of megalodon hunting phase. It's easy to see how many stocks are in a tooling phase because a lot of companies are trying to build out the exciting things they're doing, But then the end result of how that will translate into an economic opportunity, that's the hard part. Sorry, coughing. The nuances of TAM are part of this manifestation of a vision. I just saw an article on KTLA about, tragically, a French tourist was in Death Valley, and there's this brutal heat wave in California right now. Needless to say, Death Valley is not where you want to be in a heat wave. And they had a breakdown or they got stuck in the mud or something. So there's no cell phone service, of course, like a bad movie. And, you know, fast forward, person's dead. This shouldn't happen in this day and age in the United States of America. And by next year, hopefully it won't ever happen again. But that's the easy thing people get like, oh, you're stuck in Death Valley. But then people go, well, it's not a big market, you know, blah, blah, blah. The the gray zone is this is it's called a not spot as opposed to a dead zone, and so where you don't have good service and you can boost the service. This is the really big opportunity for people. How many people sometimes you look at your phone and you're like, what does 5E mean? I have three bars, but it's 5E. Like why don't I have any data? Come on, like internet sucks. These sorts of gaps drive people crazy. They drive me crazy. And this is where the grain 7x7 MHz spectrum could come into play because you have this nationwide spectrum, not a huge fat channel, but 7 MHz is okay when you pair that with the technology ASTS has. And so this can provide a ubiquitous blanket for gray zone coverage across the entire country without interference questions. This is the type of thing that I don't—I haven't done the math of dialing this directly into translating to TAM, but you know that that's worth a lot. And in the meantime, we have Spectrum—sorry, Legato chugging along. And so Justin keeps doing a great job. Just Bar 23 does a really good job of staying on top of the dockets. And you can see that this is still moving forward. Legato is this cursed asset. And so a lot of people, a lot of the smartest people in the world over the past 20 years have been chasing the dream of Legato Spectrum. All of the big dogs have, and all of the big dogs have been buried by it. Legato is truly telecoms Afghanistan. It is the graveyard of empires, and so you don't want to get too cocky about anything when it comes to trying to conquer Legato because it's the same thing as trying to march into Afghanistan. But having said that, it looks promising, and the docket is active, and I'm very optimistic that with the imperative of this White House, with the imperative of this FCC. of all of the things that they should approve, Legato should be top. And so when we think about grain, which is the 7x7 slug of spectrum, which I don't think ASTS needs, but I think it would be a nice to have, the question is, well, who should have it? Well, initially Because Bloomberg is a struggling company, they're trying to just do clickbait. And so Bloomberg ran an article, SpaceX AST said seeking to buy spectrum valued at $6 billion. Well, immediately Elon Musk says this is fake news. SpaceX isn't after it. So it's interesting that he would come out. I actually love Elon for this. He just has this first principle toward the truth as it exists in his mind. I know a lot of people really don't like him. and disagree with his truths. But the truths that occur to Elon as true are things he believes in and he is seemingly very transparent about. And he said that the deal to acquire the spectrum is not true. So there you have it. Takes a little bit of the guesswork out of it. But part of the reason why this would be unattractive to SpaceX is they don't do low band. For one, their satellites can't handle it. This would be a lot of money to buy, and there's a very high risk you lose the spectrum if you do not light it up by, I believe, 2029. And Elon already made his spectrum bet, a big one, his biggest investment probably ever. And so I think he feels or should feel like he has the flexibility to do what he might want to do and But this spectrum seems to be inadequate for his needs, and so then the game theory of how Grain might think about this is pretty intriguing. The game theory would initially also say that Grain's bankers should leak to the press that SpaceX is interested in this spectrum, because while SpaceX would know that's not true, ASTS might not know. that it's a falsehood, which could cause ASTS to more aggressively bid, ironically, against itself. And so I've been in processes where on the sell side where we have had no other buyers for an asset. Pretty scary. A good banker is able to get one interested party to go through successive rounds of bidding Against itself, which is absolutely hysterical, except obviously not to the buyer who therefore more than they had to. But the risk honestly for all parties is if someone realizes that they're the only buyer, they might actually not bid at all because they may be like, well, what's wrong? When actually the thing they're buying does make a lot of sense for them and something is good and it's just a good banker is able to extract a higher price for it. doesn't make anyone a net loser in that equation. And so here, SpaceX, if they buy it, it's probably got to be for cash because Grain would be taking kind of an all-or-nothing bet. If SpaceX doesn't deploy it, that spectrum could revert back, and there'd be a lot of pressure for it to revert back, sort of the Charlie Ergen dilemma. ASTS could buy it. ASTS doesn't have $6 billion, which is the the number that was leaked as sort of the aspirational number. I don't know if ASTS wants to pay cash. They need their cash. They have a precedent for how they do it, an upfront payment with a revenue share and some equity. That's what Legato got. And that could be very attractive for GRAIN because if I were GRAIN, I would be looking at that as more likely than not something that I'm going to ultimately exchange back into ASTS shares at some point, which could end up being worth a lot. And it mitigates my risk for whether the spectrum has any value at all, because ASTS can deploy it. Now, the third option, which makes a lot of sense, is whether Verizon, T-Mobile, and AT&T lease it, or in conjunction with ASTS lease it. This makes the most sense to me because the certainty of deployment when you have the entirety of the US market behind it is having an elegant appeal. The problems, the use cases this spectrum can solve when deployed by the JV is somewhat incredible, solving all these gray spots. The benefit to the consumer in the US, to the public service is seemingly very high. And so the public interest element of this is great. And that's what you always want to see, really, if you're a regulator for sure. But all, like, all of us should want, uh, the thing that benefits the most people while also being very economic, because one should— doesn't always have to go hand in hand, but when they do go hand in hand, it's wonderful. So the thing that can cause the most benefit to society where that also results in the highest value, you people— people should be pretty happy with that outcome. And ASTS is the enabler of that. That I could see. The financial obligation going to the 3 MNOs would be really elegant, with then opening that up on a revenue share basis to ASTS. That would make a lot of sense. All parties would seem to have the highest benefit from that. And so That to me is where this is gonna go, and hopefully we'll find out. Seems like they wanna have this settled within September. So I think this would be, it's always hard to tell at this point what really is gonna massively drive the stock price because ASTS just kinda has this weird bite point on its own clutch. You just don't really know when this sucker is gonna get in gear. And when it does, it's like, holy crap, this goes to 9,000 RPM. Who knew? And then in the interim, you're like, this is a Yugo, this thing's crap, I might as well walk. That's where we are right now. And so does the JV with the MNOs coming to life, signing spectrum, handing it over in some way, shape, or form to ASTS at the exclusion of SpaceX, does that massively change the market's view of ASTS? Very easily could. It's one of these things, you just— it's so hard to know what's gonna again be the bite point on the ASTS clutch, and this could be one of those things. So don't sleep on it. But at the same time, I could see a deal happening. People are like, well, you know, it's only 7 MHz, who cares? I'm like, yeah, you're right, whatever. So hard to say, but worthwhile to follow anyway. And it's a good tell of the CATSI thesis of whether spectrum will find its most efficient use. That's sort of the CATSI theorem. And to see GRAIN go to ASTS one way or another would be a proof point behind the CATSI theorem, which is really integral to anyone that owns the stock. You want to make— because effectively it implies that you're the low-cost producer. that all the spectrum is going to flow to you. That's effectively what the Catseye theorem is predicting. And so we'll find out. We will get our test. And so one really interesting little insight about what is going on is something that, again, Justin Barrett, we're very lucky to have him, figured out, which is an FCC filing related to Grain's spectrum STA. And so the first filing had a clause that said all operations under this grant of STA must comply with all existing agreements between ASTS and T-Mobile. What? The obvious answer was, what agreements between ASTS and T-Mobile? And then A revised filing took that out. What happened? So could have been something that inadvertently revealed the existence of a contract that wasn't meant to be publicized. That's one read. Another is that the FCC filing did in fact reveal a contract that exists, but is no longer appropriately disclosed as such because the grain spectrum transaction has closed. And so complying with an agreement between ASTS and SpaceMobile— sorry, ASTS, SpaceMobile, and T-Mobile is now moot because T-Mobile is no longer the relevant counterparty. The existing agreement with T-Mobile is no longer the governing document of that because the spectrum is now Grain spectrum, and therefore ASTS must comply with the agreement with Grain. That's the read that I prefer, but the result is the same, which is that ASTS had been testing with T-Mobile on this spectrum. It is also can be true going to the next tweet, what I call the giveaway of then why um. McElfresh from AT&T, the AT&T COO, congratulated ASTS on the testing on that spectrum. Well, why in the hell would AT&T care about testing on someone else's spectrum? Why would, why would he care? So let's put the clues together. We know that ASTS had had an agreement to test on the spectrum with T-Mobile. Now that spectrum is owned by Grain. Nowhere here is there a nexus, to our knowledge, of AT&T. The only reason I can fathom why McElfresh cares about this is ultimately the testing on the spectrum relates to his spectrum. How could it be his spectrum? His spectrum by way of the JV. So to me, that's the giveaway of likely what's going to happen. And the knock-on effects are that the JV is partnered with ASTS. Again, doesn't take a rocket scientist if you are in the space mob where you saw that when the JV was announced, a nanosecond later ASTS had a press release saying, yay, JV. And then 8 hours later, SpaceX is like, where's the FTC? We have to sue. What the hell is this JV? Which is like, never had there been more clear indication that the JV was designed to block SpaceX from getting an MVNO agreement. And this is actually something else in the SpaceX call, that the MNO JV is really a mechanism to try to prevent SpaceX from bullying T-Mobile into getting an MVNO agreement. And so we already have all the evidence you'd, you'd really need to argue this case in court, but now we seem to have even more clues of a future world where more broadly, aside, you know, the 170 people on this call will understand that the JAV is predicated on ASTS's technology as the carrier-neutral platform that they're choosing to build everything around, really at the exclusion of SpaceX, where then they will be funneling as much spectrum as they need to enable a diverse set of products that can be launched on the satellite technology, including dead spots, gray zones, IoT, government, first responders, so on and so forth. That's sort of my summary argument to the jury on this. Then we end— sorry, we end with, again, the TAM. And so Goldman forecasts a $1.8 trillion space economy by 2035, the second space age. And that's what gets so exciting when you really take a step back and go, what are some of the historical parallels where there's sort of a decade-type shift, a platform shift, where the government is putting its thumb on the scale, which is going to drive liquidity and capital? And when that capital and liquidity hits the winners, big things happen. So I remind myself of this because when the stock is languishing in the 70s, I'm so bored, honestly. Just do something. And we do all this work on the stock and it's not paying right now. Bears are quick to point out, of course, people like me who have been in this a while have already done really well. But if this was all I thought it was capable of, I would just sell and move on. I would be doing weekly Spaces on something else. But I still truly believe that this is in the tooling phase and in the earliest days of its progress. And so whether it's ultimately worth $2,000, $1,000, or $500 really doesn't matter. It's trying to squint— well, it does matter. For me, it doesn't matter because it's just inconceivable at this point that I'll wait to $2,000. At some point, I'm just going to do something else in my life. But you want to make sure that there's a big opportunity. And I keep seeing this. I look at new stocks all the time, but this is the one where I see the platform shift, the monopolistic traits, the chessboard very clearly, and then the resultant financial model that can drive shareholder accretion. And so I was giving This other guy, a space investor, a hard time today because he was like, my top 10 space stocks for the next 10 years are Redwire, Rocket Lab, and SpaceX. And so certainly, just pulling up their financials right now, certainly SpaceX is a real company. Rocket Lab has great ambitions, but we'll see. But you look at some of these other companies, not the— this is a company that already has real revenues. The business is somewhat already existing from what I can tell, doing dollars of revenue. What you got to look at with something like this is what the gross margin is. Gross margin is really the proxy of the value created in a service. Break rocks. Let's say someone really needed rocks to be broken. That would be valuable to rocks, but my gross margin for breaking rocks is going to be like 10%. This is not a high-margin business versus if I create a compound that cures cancer. Well, that is very valuable and I have patent protection. There's a real moat as to why I have pricing power. Margins matter. When you're doing engineered services, it's very difficult to scale profitably. Sure enough, Redwire has 5% gross margins in 2025. This is terrible. And though this is not what you look for in a great business, you have a theme and things like that. The stock's gonna have some volatility, maybe it'll go up, I don't know, but this is not a platform winner. And so you wanna focus on platform winners. It remains to be seen if ASTS will manifest this vision that I and others have for it, But the setup for it is there, the precedent for it is there, and certainly seeing the cards we have flip each week, this week included, support this. And so that's what makes it a very interesting investment for me, but it's not the only investment I have. And I look at other things all the time. It's fun, it keeps me active. I've been working on some crypto stuff. lately, that's going to cause a lot of people to probably lower their confidence in me. But with crypto, for example, like space, space easily dismissed. Crypto, my firm does a lot in crypto, so I just have a lot of good flow in it because we have a pretty big practice there. And so it's something I would've never really thought about a lot if I hadn't been forced to. And crypto's interesting because it's so easily dismissed with all these meme coins and all this other crap. that it's really easy to overlook the fact that some great businesses might actually be born from it, just like Web 1.0 had a lot of crappy stuff like Webvan and Pets.com, things like that. But from it became Amazon, eBay, things like that. And so you have the various cycles of crypto, but there are some really great businesses that can be built from it, Hyperliquid being one of them that I worked on, and that was Extremely interesting because I've really never seen a business with characteristics like that. And so in all the volatility of crypto, though, people are like, "What the hell do I own? It's called hyper liquid. What is this? Is it you know money laundering operation?" And you know I see something and goes, "Well, this kid could and might take down the CME." It's a big idea. And so there's another one I've been working on recently that Anpanman tweets about a lot, and. I see some interesting stuff there, but that's how I spend my time. I'm looking for these winners that can take advantage of a platform shift, and ASTS is the best one I found to date. It's also by an order of magnitude a larger investment than anything else I have. I kind of forget what the non sequitur on that was, but I'm still anxiously awaiting to be proven right on ASTS from a $70 starting point. So to take every week yapping about my investment from $3 is pretty stupid. So it's always me yapping about my investment from the current stock price is always important because I am a mark-to-market guy. I strongly believe in the Goldman Sachs ethos of marking to market. You own it every day. Every day you wake up, you're buying it. If you're not thinking that way, you're going to make a lot of mistakes. So anyway, I'm excited for next week. I think we're probably going to get a shipment announcement next week. It's high time. So shipping satellites is good right when, you know, we're nearing the end of August. People are kind of waking up again. Maybe that gets this thing back to life. Sprinkle it with some grain, grain spectrum. You know, if, if the gods are smiling upon us, a Legato approval would be good. And you know, we we know. Oh, we also have a J. Leo contract cut the background too. It's just Japan operates on a different time scale. So the handshake has happened, which is as good as a contract as far as I'm concerned. But the ultimate announcement is is forthcoming. Time undetermined, probably you know a month or two. So that's what we got. Thank you everyone for joining. Hope people found it useful and. I'm sure we'll have another exciting week next week because there is always something going on in the world of AST SpaceMobile.
[00:44:27] Speaker B: Thanks for listening to the AST SpaceMobile If you enjoyed this episode and you'd like to help support the podcast, please share it with others, post about it on social media, or leave a rating and review. To catch all the latest news about AST SpaceMobile, make sure to subscribe. Thanks again, and I'll see you next time. Listen.
[00:45:07] Speaker A: Mmm, waffles.