Kook's Weekly - 28 July

[00:00:00] Speaker A: Good evening, everyone. Thanks for joining. As always, what a busy week. I always look at my sleep patterns on the weekend. I couldn't even get out of bed today to surf. And I think, what must it be like to be Scott? I cannot imagine. And so let's start off with a funny story of how our group is perceived in the outside world. I was just walking with my son to dinner and I I wear all those Redrum shirts all day now. And he said, what? He was asking me about this shirt where he's like, there's King Tut on it. There's a farmer who's a cat. There's you. And then there's Sunburned Man. And I'm like, you know what? Anpanman is totally Sunburned Man. The guy needs to wear some sunscreen. It's all gold face. So that's our little space mom from the perspective of a small child. Farmer who was a cat, King Tut, Sunburned Man. Luckily to AT&T, we're slightly more serious. So let's kick off business with the thing that ultimately matters, which is that we have a functioning constellation. Now, a lot of us would probably go, you know what, I'm totally okay if the stock just goes to $250 and we call it there. But I think we're going to actually have to do some stuff. To have the stock go higher, so AT&T put out a really interesting group photo with of course the blood type A logo, which is their cat call to us, with a really interesting little message hidden in the upper left-hand corner. And it talks about let me just open it up talks about how they completed the first satellite call. Directly into their core network. This is a very important detail. The core network means that the phones don't know that it's a satellite. It is just simply another connection into the network, seamless, native, allowing any device to work with no software app, no patch. The phone will not know the difference from a tower. The MNOs own their cores and this gives them the control over the system. And as a new person that I just started following, I already forgot his name. Where was it? I want to give this person sufficient credit. Oh yeah, here we go. Rocket Tank 123. As they, as some of these very sophisticated people point out, That while WhatsApp and FaceTime will allow you to make a call, you cannot do a 911 call that way. And so the way ASTS is integrated means that it allows the telecoms to have all of the safety and functionality they expect over the normal network available through ASTS-based mobile. And another study in contrast is just very simply what happens when you use SpaceX. SpaceX is its own system. And so the phone is actively searching for a new network as opposed to staying on the same network. And so then as it flops back and forth from T-Mobile to SpaceX, the phone is frankly exhausted. It doesn't quite know where to look and it's looking in a different place all of the time. And then when it's connected to Starlink, it's going to be draining the battery because like E.T., it wants to phone home. It wants to find that T-Mobile network. Whereas with ASTS, you're all just going to be on the Verizon and the AT&T and the Vodafone core. Very important detail. This is why the telecoms love it because it is native to their own systems and they're control freaks. So all of this is lined up to be perfectly integrated, and that's what to me allows it to be very scalable, durable, unchallengeable, and valuable. Most important thing is that I still don't think any of these telecoms will ever really switch. If looking at ASTS like a AWS comparison. A key issue that Fortune 500 companies have with cloud vendors is lock-in. They're worried about getting locked in where they start using one and then they can never change. That's ASTS. Now, I hope they don't ever abuse their position to make anyone want to change, but I do not think that an MNO, once integrated with ASTS, will ever change. And that ends up being very valuable from a Market cap perspective, because that means that there's visibility on cash flows. People might say, what cash flows? I promise they're going to come. And so once we have these things called cash flows, which are receipts of money people pay to you, we, I don't think we'll lose those. And instead, I think we'll have a lot of what's called net expansion as we get more users. But also more importantly, I think that we're very quickly going to blow past this initial thesis of dead zones. And I think that the platform effect of AST SpaceMobile, where people build applications, build use cases on top of the ability to have access anywhere, is going to dramatically increase overall monetization. And so that's the equivalent, if you put your SaaS hat back on, that's the equivalent of seat expansion and upsell within the seats. And this is what drives valuation multiples. This is the path on why I think we could be pleasantly surprised where ASTS SpaceMobile could have a billion dollars of revenue, yet trade at a quarter of a trillion dollar market cap. I don't think that that is all out of the question. I don't think it's the base case, but that's the type of upside asymmetry that I want to expose myself to. a big investment of mine. So next we have Verizon. Verizon, it's already been well over a year since they announced the LOI, and we've been waiting for this DA to drop for a very long time. The passage of time could, could of course lead a FUDster to think, oh, something must have happened, they must have dropped. We know that's not true. We know that's not true because the FCC filings, we know that's not true because of LinkedIn postings where requirements for getting a job at ASTS is actually familiarity with the Verizon systems, things like that. I know that's not true just because I have a lot of contacts in the industry that are telling me that's not true, which is a pretty helpful way to vindicate myself in my investment thesis. But then you could also just watch MSNBC where the Verizon CEO says That they already have their agreement in place with ASTS. So, you know, hearing it from the CEO of the company should be a pretty definitive thing. So then the question is, what is the hangup for the formal announcement? One at this point could say whether that's important or not for the stock price. I think common sense says that it is very important. I think it will be one of these jarring events. That is just another big domino falling for anyone on the sidelines. Someone's waiting to see that this is in fact gonna be the mobile broadband monopoly. That Verizon DA will remove all doubt because someone should look at this scenario and go, you really cannot have an economical constellation without the US. When ASTS has definitive agreements with AT&T and Verizon, then you own 2/3 of the US, you have a blocking position in the critical market you need to have any chance at success. If you have a blocking position in the critical market, no one should be able to actually launch a competing constellation. It should be economically infeasible to do that. And I think that that's going to flip the realization when people realize this is in fact chess, not checkers. And that Abel, Scott, and this very talented team have checkmate. This was also disclosed in the prospectus that was filed the other day with Convert. And so ASTS notes that they're expecting to sign an agreement with Verizon as well. Now, unpopular opinion, the benefit of being an anonymous account not affiliated with any credible firm whatsoever. Just literally a guy wearing some gym shorts that just chowed down on some oatmeal and I was drinking espresso. Those are my professional bona fides in this moment. So with that caveat of why not to listen to me, what I would say is that I suspect that there's something more complex going on here. And so on one hand, that complex thing is just simply the revenue share. And so I, I am of the belief that ASTS knows what they own, just like we know what we own, and they're not giving this away for cheap. This is their best idea. This is their Mark Zuckerberg philosophy of like, this is as good as it gets. Like, we're not going to have a better idea than this. And so they want to monetize it. I have a sneaking suspicion that there's also the potential for money to be associated with this DA. For a long time, we've been waiting for these very large prepayments to come in. And let's think about it from the telecoms perspective. These make a lot of sense because what ASTS is doing is basically financing spectrum and infrastructure buildout for the MNOs. Spectrum like Legato, but also fallow spectrum, that otherwise has no real value to the MNOs. And so whether it's a direct contribution of spectrum that ASTS owns that now the MNOs don't need to own, or lighting up spectrum that otherwise they'd either have to replace to buy some stuff that's more useful or assets that were just misallocated, one way or another, ASTS is an incredibly valuable proposition from a capital efficiency point of view. And so this was where I could see that the MNOs say, I'm all too happy to write these guys a quarter, you know, quarter of a billion, half a billion dollar check as a down payment against this CapEx arbitrage. And then that goes in tandem with a DA. That could be true. It could also not be true, and we'll find out. But I'm thinking that these DAs, now that they It really is the case that we can see the whites of their eyes. You know, this constellation is going to start being really visible within 6 to 9 months. We have all these other shoes that have dropped in our favor. You could really see it being the case that ASTS was in fact just playing the long game, not selling themselves short, not doing these DAs or agreements too soon, but waiting till the moment when everyone in the world goes, oh my God, they did it. That's when you're going to have the max value for something. And that's the type of situation that I think we might find ourselves in, and they'll monetize that with some of these prepayments and things like that. And the best way to get a prepayment is when you really don't need it. And we're going to get to ASTS's balance sheet in a second, but let's continue on the, I call it like the front-end fundamentals first. So you have front-end fundamentals, which is like, hey, do you have revenue? And then you have back-end fundamentals, which are, How are you financing this stuff? And let's stick on the front end for a second, 'cause that's ultimately what drives value. We also had some FirstNet updates. And so an account that I, again, really value a lot other than Cassie, of course, the cat who is a farmer, is Yield of Parth. Quiet is a good description for Yield of Parth, but lethal is another description of Yield of Parth. Yeah. This person clearly knows what they're doing, even though they deny it online and say, oh no, I'm just an amateur. This person has uncommon wisdom. And so we had an FCC filing about FirstNet. So the FirstNet spectrum was very interesting. It's allocated with first-use priority for emergency services. So think of in a natural disaster, you have police and fire departments and rescue crews Meaning to communicate, they have first dibs on the spectrum so they don't get knocked offline. This was obviously the problem with the 9/11 attacks is you had millions of people in New York all calling at the same time. And while it's important, of course, to call mom and say, hey, I'm okay, it's way more important for a fire crew to be able to coordinate as they're doing active search and rescue and recovery. Way more important. And so from this, I'm not sure if this is actually the direct reason why FirstNet was born, but I'm pretty confident that it would've been. This is why FirstNet has its own spectrum. However, you're not using it all of the time. And so what's very valuable if you're AT&T is to be the provider of FirstNet. So you have this kind of capacity payment you're receiving to provide this sporadic service, but then you have second use rights on all that capacity, that spectrum to use for commercial purposes. And so what's so beautiful here is that ASTS has now proven they can operate all over continental US, which is called CONUS in these FCC filings, using the frequencies under its agreements with FirstNet. So this is a nationwide 20 megahertz block of spectrum that AT&T can monetize now with ASTS without having to hang a bunch of new towers and things like that. And so while the spectrum was always dual use, it always allowed for secondary commercial use. To use it that way, you'd have to go build out a bunch of stuff. Very expensive. ASTS allows you to light all that up in a very efficient way. Again, Alchemy. It's turning what was a CapEx commitment into revenue. And people wonder why the CEOs of these MNOs go on CNBC yapping about AST SpaceMobile. They see the value. They know how this is going to work. We, frankly, or I don't want to say we, I perhaps had a very rudimentary understanding of all this until I started watching a lot of these AT&T interviews with Chris Sambar and some of these other executives. where I learned about how ASTS could operate in the guard bands, be totally redundant network, not just dead spots. That's when I had this big aha moment to realize this. Again, I use this analogy a lot. This is the AWS to a telecom so that they can get away from on-prem. That's the big idea that I see. That's the path to hundreds of billions of dollars, hundreds of billions of dollars of enterprise value being created. And that's what I'm always looking for, right? I don't often find is a quote, you know, big idea trademark by Cook, because you only need one of those. If you get one of these right, you never have to get another one right. And that's what's kind of cool about this is I don't know if I'm a good investor or not, and it doesn't even matter if I get this right. I can claim a W. And you have to have really good visibility into something to see around the corners, to see something other people don't see. And that is an uncommon wisdom, which I don't know if I have. Let's see if this works out. But to have understood AWS with Amazon, which I in fact at the time did see people that understood that, to see people that understood Nvidia, to see people that understood Microsoft, and even think about people that understood Monster. I'm so amazed at that. company, not to go too much on a tangent. They totally created a category, got standoff agreements with Coca-Cola with a highly addictive product that they totally absolutely dominate with high repeat and customer satisfaction. Look at what they look like 25 years ago. It was the most spiffy thing you could have ever imagined. But if you really kind of dissected it in a simple way to see what the quote big idea is, That's the only stock you ever had to own. And so that's what I'm really trying to nail with AST SpaceMobile. Well, let's get back to FirstNet. Redrum had a good tweet just pointing out a quote that FirstNet put out, and it said that, quote, we're amending a contract. Oh no, I think he's actually giving us the definition of what amend means. But FirstNet did say in an FCC filing that it had amended its contract with AT&T. to authorize supplemental coverage from space, from AST SpaceMobile. So we know that FirstNet has said they've already signed a contract, uh, that came out a couple weeks ago, maybe a couple months ago. We know they're gonna have a deal with ASTS because they've already put the spectrum in the FCC filings. And it does look like now they're doing all the modifications they have back with AT&T, which are probably these back-to-back agreements. with AST SpaceMobile. And so when this stuff actually happens, anyone can really guess, but the telltales are there that it will happen. And then the materiality of it all is really the question. And so I think it's material. It's certainly a very important mosaic in this artwork creating. Which agreements are worth the stock going up 20 or 30% on a day? I don't know, but in total, all of them cumulatively have the impact of putting an economic machine together that should be able to be a very big company. Now let's get to the backend fundamentals, talking about that machine. And so we got a convertible bond issuance that was announced on Thursday evening, and we also got an update on the balance sheet. And so ASTS told us that there was $940 million of cash at quarter end. At that point, there was $100 million of existing convertible bonds and $43 million of secured debt. They terminated the ATM and the deal with the convert is going to generate $490 to $560 million depending on if it's upsized. It will be upsized. The bonds are already trading at $106, which is good. When you buy them at par, which is $100 million. And then on my calculations, when I take into account the ATM that they did so far in Q3, plus the bond proceeds, I'm coming out that they might actually have about $1.6 billion of cash right now before taking into account CapEx. They have about, at this point, actually, I don't even know, but they probably have $400 million. On the books. Let me see if I have this up right now. They had at Q1, they had $235 million of— doesn't seem right. $235 million of satellites in orbit. So that is right. And they had $226 million of Bluebird satellites on the books. And so these are works in progress. And so they might well have $400 million of satellites under construction on the books. So when you think about that, or how I would think about that is you have $1.6 billion of cash. So electrons that have yet to be converted into microns, cash into satellite parts. In other words, sometimes I can be too cute, my stupid little sayings, but $1.6 billion plus maybe $400 million of work in progress. So that's $2 billion of Things that are presently or will become satellites. That's a lot of things that will become satellites. We're on the path. The company now has a very significant degree of control over its destiny to execute without asking for permission. Now, if I'm right that we get some prepayments, I believe we're also gonna get Exim. We're also going to start to get revenue, which is going to be wild. I really pray that we get a taste of that in the Q2 update because I think that's what's going to blow people's socks off is when they realize this thing's actually generating a bunch of revenue before anyone's actually used it as a consumer. There is a point where the market connects the dots and goes, we can now extrapolate really in a straight line. To what a full constellation looks like in that straight line, I think people really quickly go, yeah, billions of dollars of revenue with upside, because it's going to be a linear extrapolation. And I believe, like the topic we'll get to in a second, convertible bonds, I believe it has convexity to it. And so then when you have convexity, that should lead to a higher trading multiple. And this is where there is the potential, especially in what's a very hot market right now, to have some somewhat stupendous valuation outcomes on our favorite little stock. And the pieces look to be there. They have to execute, but the pieces are there. So now let's talk about this convertible bond, something that's near and dear to my heart. I love the convertible bond market. It's what I used to do. Ironically, I would make the joke that if I ever retire, I'd want to go back and trade converts. And then I actually met a convert fund looking to hire, and I was like, so funny story, I might be able to retire because of AST SpaceMobile. And so now maybe I'll just go trade convertible bonds. And then I realized I don't want to wake up that early for now at least, because I'd miss every single AM surfing session. But let's look at these old bonds. So fair value of these bonds was $262 relative to a $100 par, and the market price was $242. So these bonds were cheap, but converts always trade cheap. That's the entire point of the industry. is that long-dated vol trades at a discount to the vol you see in the options market. So if you model a convert, this is kind of a little crash course on convertible bonds if people are interested. But if you model a convert, you can look at this little Bloomberg output I put in there. The flat 2-year implied vol is 90. So if you plug that in a model with a 400-credit spread, people could argue about this all day. I'm noticing here the borrow cost was plugged in at zero. That's not right. But that pumps out a valuation for a convertible bond. Now, I would never use a 90 vol assumption for a convert. I would kind of cap these things at, I don't know, 40, 50, something like that, because that's the whole point is you're supposed to arb the vol. And so as long as this thing realizes at 90 and you bought an instrument that's priced at 50, then if the stock moves around a lot, you adjust your hedges, which we'll get to in a second. So you buy this bond, For every bond, you're going to short a certain amount of stock. In this instance, you are, for every $100 of bonds, you're shorting 3.7 shares, and then that's on a delta. And so you just move that around. But now this is basically on 100 delta. The theoretical delta of these bonds is 94. And so from the company's perspective, why do you want to get rid of these things? Well, these things basically act as stock, so you really just have additional equity outstanding, but in this instance, you're paying a coupon on it. Ooh, that's like a mandatory dividend. You cannot miss it. So if you're a company, would you rather have straight common stock outstanding, or would you rather have straight common stock outstanding that you also have to pay Forget the coupon. 4.25. Yeah, 4.25 fixed. And if all hell breaks loose, then you have all this debt that's going to come knock on your door. No way. You want to get rid of this stuff. It served its purpose. And so that's why they're flushing these things. They're giving these convert holders the stock underlying the bond plus a kiss to make up for the premium that's left in the bond to get rid of 'em. And the company's actively trading its capital structure, which which is a reasonable and smart thing to do. So this new bond, and now we know actually why they— I still couldn't quite figure out that flush the other day. It's weird for the company to pay that premium out like that, but I thought what was going on is because the stock loan market had gone crazy. You know, if I'm the company, let's put it this way, if I'm a sophisticated executive, which I think I would be, I would understand that having my cost to borrow at 13% is not good. It's not funny. I know everyone would be tweeting about, you know, the mother of all short squeezes and things like that. I'm looking at a capital structure that's no longer efficient and it's going to deprive me of things down the line. Because if I wanted to go issue another convert, convert holders seeing my stock with a cost to borrow of 13% are going to say, fuck you, no way. It breaks down the entire ability to have a convertible bond outstanding. And so they totally destroyed the short interest in June. They flushed the bonds, which released a bunch of stock and somehow got a bunch of shorts to cover. Basically, the cost to borrow went from 13% to, I think it's like 60 basis points now. And they also just showed to the market that they're not going to let their capital structure break to the detriment of people who Gave money to the company. And so if I were a convertible bond trader, I'd be looking at this and go, you know what, these guys just kind of showed that they're not going to let me just get destroyed because my cost to borrow, a stock going special like this ruins a convertible bond arbitrage's P&L. And so for them to go protect those guys was smart because it means that, A, they got past being a first-time issuer and people have had a good experience with them, made a lot of money. but they showed that they're professional and that it's a safe company to lend to, especially in the convertible bond market. They're smart and now they're a repeat issuer. These bonds are oversubscribed like crazy. Still in my mind, super cheap. These bonds are, to me, you know, for a guy that has his entire net worth in the stock, these bonds are really exciting. And for a couple reasons beyond just a positive view of the stock is I think I think the vol's going to be crazy. And these were only issued up 20%. That seems really light to me. I haven't done a study of where this has been lately, but at least when I was doing this, a lot of bonds were like 0% coupon up 35, things like that. These were 2 3/8 up 20. That seems cheap to me. And it seems cheap to the market too, because the bonds traded up 6 points. And I didn't even look at what the bonds traded up to on a hedge basis, but because these were priced against a $60 stock price, so they're up even more than that when looking at the bonds against a $54.33 closing price. And so these bonds give you the benefit of 2 3/8 interest versus 4 1/4. So that's a 200 basis point reduction In interest costs over 6 months. That's quite a tightening. The same premium. So the premium is the difference between the price of the stock at the pricing of the convertible bond and the strike price of the bond. And so the last bonds were struck at, I think, $27 roughly, and these bonds are struck at $72. And then the company did the same thing with the cap call. And so the dilution doesn't actually kick in at $792 because the company bought a call spread on itself. So the dilution, which is the boogeyman of all retail, kicks in at $120, which is very similar to the structure they did last time. So the company's doing everything possible to minimize dilution. And Kevin Mack will disagree with this. Well, no, I think he actually did agree with it. What I'm about to say, The company is trading their capital structure in a way that shows that they are bullish. But as Kevin would say, it does not indicate that they know the stock price is going to $120, but they think it might. And they're definitely not treating their capital structure as indicative that they think things are going to go very, very poorly. And so they've been doing everything to protect the interests of Abel. First and foremost, who owns 78 million shares of stock, and the company's doing everything possible to make sure that he has the highest percentage ownership possible in light of what is a capital-intensive exercise to build the company. So now first, let's look what happened last time they did a convert. So the stock got clubbed 16%, of course, but it took only 8 days for that price impact to be cleaned up and to go to new highs. And so this time we're only down, I think we were down 8%, 10% at the close. So we're already, it was absorbed better on a larger issue. Firms are better. And I think that there's a lot more certainty around this company now than there was back in January. And so it is Possible. You know, it's impossible to predict the future, but it certainly seems like we could actually have new highs this week because this is a technical decline. The issue of the issuance of the convert is not a, you know, oh my God, the stock's down 10% because of Elon or whatever. It is down simply because convertible bond ARBs have to short the stock against those bonds. They're buying something. They're buying a call option on the company. So the convertible bondholders are generally positioned bullishly, and then they have to short the stock to hedge the option. That's it. That's why the stock went down. And then just how long that takes to clear is just supply demand. Kevin Mack did a nice little write-up that I linked out, which he says, I don't know, who cares, but You know, he's an academic, he's doing his thing. And then we have Anpanman's tweet that, or sorry, he did a Spaces, which I'm sure was great. I didn't listen to it, but I linked that out as well. And I'm sure he was just talking about some of these things that I probably have covered, probably did a better job than I did. So listen to his Spaces as well. So then the question is, why raise all this money? And I know retail's perpetually really confused by this. You know, dilution. Ah, is the dilution in the room with us right now? And that's kind of the title of my weekly is imagine the ASTS had had zero dilution, predict the stock price. And the person's like, well, I think the stock price would be zero. Yeah, it would be because it'd be bankrupt. The whole point of being public is to raise money. Even if they weren't public, they'd be raising money in private markets. This is about inducting new partners into our company to help us fund growth. We're trying to allow those partners to join at prices that minimize how much of the pie we give those partners. But those partners are holding the intention and trying to get the most of the pie, because they also want to make money. But we have to share this pie right now to grow because we have an expensive thing to build. And And this is where we're starting to see the company really show what they're made of. So now that the market is cooperating, which it wasn't a year ago, we're seeing that they're very smart and they are very active at managing their capital structure. They're being very adroit at using the ATM. Everyone freaked out about the ATM back in May. You know, how's it going, loser? You sold your stock in the 20s because you didn't understand the company needed money and now it's 60. I hope people kind of reflect on this because there's probably going to be another ATM filing. Don't be the idiot that freaks out over that. What would you rather have? An overnight offering where the stock goes down 10% and you have to do it all at once? Or would you rather the company raise money more slowly and dollar-cost average up, and then people kind of even forget about it because they start to look at the fundamentals and realize, Even with the ATM, let's say they announce another $500 million ATM, let's say a billion, it's just 5% dilution spread out over 3 months. If that's impacting your assessment of the future value of this company, then good luck. So I think they're doing a great job. I like the fact they have this huge balance sheet. This is a $20 billion company. This is a huge percentage of my net worth. When I think about how I'm gonna make money on this investment, financial leverage is not how I wanna make it. I do not want financial leverage on this company. I do not want financial risk. Why? Because that's more of a binary bet where if they're wrong, then I can lose all of the fundamental value that would've been created had they been more prudent. So I wanna make money on technology risk. I want the tech to be best in class to create a market that creates a really interesting business model. And then I want to take execution risk because you have to, because if you have a chance to have this beautiful business model, then you actually have to execute into it. That comes with the territory. And then the third risk is financial risk. That's what I don't want to do. There's no point in trying to spare 5, 10% dilution but then have a risk of if the market shuts down or something goes wrong, run outta money. And then like a candle being doused in water, that flame of value creation goes out forever. I don't want that risk. Company does not want that risk. I feel much better about them having $1.5 billion. It's not even a statement I should make as if there's a comparison. I feel good about them having $1.5 billion. I would like them to have $2 billion. under no circumstance do I want them to have a cash balance less than a billion until such time we are so quickly ramping revenue and cash flow that it's very obvious that we are well past the investment phase. And let's cross that bridge when we get there, but I like the capital raise. And so then let's think about some of the reasons why they're doing this other than being prudent. Kasey has some really interesting discoveries this week about What did he have an interesting discovery of? How do I say this? About the order of satellites. And so after FM2, we are now doing orbital raise up to 690 kilometers with a 3rd satellite. So for a normal consumer application, higher is better, higher field of view, lower deorbiting, just more economical. Yeah. to do for that purpose. Yet there is this 520-kilometer, or he says 500-kilometer, I thought it was 520, but there's this 500-kilometer shell as well that we initially thought were going to be kind of the next 20 in the series. We thought that that was because they were going to iterate, work on the orbital boost stuff, add complexity later. I don't know. We could rationalize whatever they say to us, of course, because we're clueless. But now what it looks like is that the next 18 are going up for overall raise. All of a sudden, this is just like one of these things I'm reading and it's like, God, it's so obvious. If you would just spend 20 hours a day, 7 days a week reading FCC filings, it's so obvious. The cat who is a farmer. So let's remember the Halo contract. So for those of us who studied what the SDA, Satellite Development Authority, put out with this HALO deal, it was about buying 2 satellites up front for testing. And then there was a bunch of stuff coming after. It's starting to look pretty clear that FM-1 and FM-2 are the HALO birds, which is to say they are the DOD birds. Which is further to say, are they the golden dome birds? But then the next 20 that are in that shell, that 500-kilometer shell, from what I understand, doesn't really have a very good use for commercial coverage. It's just not what you would do. So then why are they doing it out of order? Why are they going back after launching this 690-kilometer shell? Why are they going back? To do the 500-kilometer shell? Department of Defense. I think it's that simple. And that, I think, is what we had speculated for quite a while, is that we're going to have multiple shells. We're going to have Blackbird shell. We're going to have low-band shell, mid-band shell. Then Cassie, we'll get to in a second, discovered that we might also just have laser weapon from space shell as well. A lot of shells. Yeah. There's a lot of satellites going up. There's a lot more than I think we had originally envisioned. And it's not because our system is inefficient and our CapEx is spiraling. It's because there's more opportunity than any of us really thought of. And that's what you want to see is when the TAM starts to go straight up with a stock. And that again is the path. I just, I make up these numbers, so don't hold me to 'em, but that, yeah, I use it roughly for kind of impact, but That's how you get to these quarter of a trillion dollar type opportunities for a company, which is 10x from here, which is pretty exciting, especially where there's serial correlation of if you start to get right on a lot of this stuff, the probability of having that type of big bang starts to become really an issue of time and continued execution. And that's what's exciting to me is capturing that, you know, if it's X, then it's Y. So if it's worth $20 billion, then the balance of probability says it's worth $200 billion because it's all line of sight continuing of what they're doing. So speaking of continuing what they're doing, it would be really nice if they would launch an effing satellite. And so we have FM1 coming. At some point FM1 will launch. And so what we know is that the gating factor for this is this stupid NASA project that lost a lot of money that it got delayed. And so the NISAR project is supposed to be launching July 30th. As I look at my calendar, it's July 27th. So boy, that's going to happen soon. So this week, let's see if that happens. And then we have the Bluebird now being posted by ISRO Spaceflight account, which covers it pretty carefully. say in August. And then the prospectus of the convertible bond deal also said we'll be shipping in August, which is this week, late, late this week, next week. We have pictures of the ISRO cargo, the NISAR satellite being encapsulated in the payload. So that one's happening. Pretty exciting. And then we're going to get the FM-2 soon. And I've been a little bit confused. I started to hear some rumors that it might not be a Falcon 9, but then it also could be the case, and this is going to be surprising, is it might be the case that we have FM-3++ being launched maybe sooner than we've thought because they haven't really drawn attention to it. So I just flagged people in the Space Mob that are doing some really deep diligence as to whether or not FM-2 is a Falcon, but maybe FM3, FM4 is actually happening a little faster than we anticipate, and maybe on a rocket that has a feather on it. And so that's what we want to be on the lookout for because this disclosure we've gotten from the company shows that they have a lot of satellites nearing completion. A lot of them. And we have to ask ourselves the question, congratulations on what? Maybe it was some early launches. We'll find out. So let's look at what happens in the stock, to the stock into launch season. So Kasey put out a little friendly reminder that, uh, it was actually really cool 'cause he comps the stock price that we have of ASTS in 2025 to the stock price in 2024. This is just voodoo math. Obviously the base effect of it's a lot easier for the stock to have gone up in the past 'cause it was Smaller base, but it just shows that, you know, for what is still going to be an October— sorry, August launch, and here we are in July, the run-up into launch still might have a ways to go. And I know a lot of the TA people are seeing that the chart looks like it's going to go straight to the 70s or 80s. I hope they're right. That would be cool. And what's neat this time is that we're not going to have that, the launch hangover. Supposing everything goes successful, because we're going to have so many other launches coming. Then we're also going to have these Blue Origin flights, which I'm really excited to see. I really hope those guys can consistently make orbit in all their launches, whether the boosters return or not. That's kind of Bezos's problem, but having them make orbit is great. And that's just going to give more visibility on, on really high velocity launch cadences. So now let's get to Golden Dome. So Golden Dome seems to have a lot of momentum. Katzie, again, as always, was redlining the public solicitation for Golden Dome and found out that there were some changes. Boy, this stuff is nuanced. Some changes that seemed to allow much more flexibility for the DOD to buy things that could include services. And I, interpreted it to be opening the aperture up for Anduril, which is what Katzi concluded as well, but also potentially for us selling our technology as a service as opposed to selling satellites themselves. But in any respect, Golden Dome seems to be happening. And then I also, what did I do? I tweeted out or I linked out a Breaking Defense article. And it quotes General Gitline. I don't know how to say his last name, but he's the Pentagon Golden Domes czar. And he speaks about the technical challenge of Golden Dome. And what I find interesting about this is you got to see the threat. And he's also focused Am I gonna have the industrial base to build these satellites fast enough? Now, which company do we know that seems to be rapidly expanding their capacity in 2 states, perhaps expanding it beyond what would be necessary for a 95-satellite commercial fleet? A lot of things seem to be pointing toward everything lining up quite nicely. For ASTS and Golden Dome, but most importantly together. And then another key threshold also passed this week, which is the confirmation of Ariel Roth to lead the NTIA. And so the NTIA, for those who don't know, is a very important executive advisory agency that helps coordinate spectrum with the FCC. So for example, with Legato, the NTIA will be, I believe, effectively representing the DOD and the government in making sure that the spectrum usage is okay when getting the FCC approval for ASTS to consummate the Legato deal. It's my belief that any prudent bankruptcy judge would have checked on this before Ruling that the plan was in fact feasible. We'll find out. But in other news, Roth is also championing satellite usage for the BEAD program, which is a $42 billion program. And we've also had interaction between public interaction between AST SpaceMobile and the NTIA with the photos. Again, congratulations on what? And this is where I think that they've been doing some. meetings and coordination for both Legato and Golden Dome. That's my own conjecture, could be wrong on that, but it really adds up. So it's important to see that the NTIA path is being cleared because at this point, it's not that the success of ASTS depends on the NTIA, but additional upside and potentially very significant upside does depend on a very creative NTIA that will help blast through the upside that we should realize on Legato. And potentially the application of Legato for Golden Dome, if Golden Dome isn't powered by additional spectrum, but is just literally given to ASTS because the government has a lot of spectrum. When you look at the spectrum charts, the federal allocations are huge. And so it's my belief, some people can correct me online if I'm wrong on this, but Golden Dome is very important. If this requires a certain type of spectrum, the government might just Give it for that use. Pretty cool. So we'll find out when we find out, but it is useful just to know that ASTS, their profession is peace. And so these satellites, and this, I'm on this, uh, Catseye tweet, the application of these satellites is absolutely mind-blowing. And so when you look at where our satellites can also work in this 1,200 to 2,400 megahertz frequency band, we start to have the ability to blow up other people's GPS systems, which is quite funny. And so we can start to take out and spoof GPS, BeiDou, which is the Chinese one, and GLONASS, which is the Russian one. And so all we do is just start spoof different waveforms. But what's beautiful is that We can just look like telecom satellites, you know, oh, shocks us, don't shoot us down with a space missile, and then flip a switch and cause certain theaters of war to go blind. All of a sudden, enemy radars don't work, the GPSs don't work, their missiles don't work, their drones don't work. The power of our system is over 50 decibel watts stronger than the signals of GPS at the Earth's surface. And so we can just totally drown them out and we never get tired. We don't run out of ammo. And so anyone that saw that article in the Journal this week about the missile interceptors, that's terrifying. The US ran out of missile interceptors on a 12-day war or nearly ran out. That's pretty scary. It shows how easily we can be overwhelmed. By a second wave and how our enemies could plan to do this. I got to believe the Pentagon is all over this and going, this cannot happen. And so one additional way to counter this threat is to make other people's missiles just simply not work. And that's what gets so exciting about the application of ASTS to these issues. And we're not shooting stuff. We're just shooting some waveforms down. So it's almost like a peaceful way to prevent a war or stop a war or frustrate a war. And I think that's what we're going to do. And you can see why that starts to become very big business with the DOD, which this rapidly evolving set of use cases. for 5G satellite technology, I think is really going to be the theme of the next 10, 20, 40 years. And I believe we're at the front and center of that, which is a great place to be. And then we also have a tweet from Dr. Mike on this point of spectrum that covers what Brendan Carr was saying, that the FCC will, quote, try to free up spectrum to make direct-to-cell Work more robustly everywhere. What more could you want? The chairman of the FCC saying we're trying to free up more spectrum so that ASTS can work better. This is like the U.S. government giving Exxon extra acreage for free. Like we need more oil. Let's just give Exxon the Gulf of America. Wouldn't happen. And so the fact that these things are being said, and let's see how this pans out in reality, but the political pendulum here is wild. You potentially have the NTIA and the FCC teaming up to give spectrum to enable these use cases because the value of these use cases is so vital to national security. And we'll see if there's an auction, but it potentially trumps the need for auction of this spectrum, which costs money. But even if there is an auction, just to have it available for you is a crucial component to creating value. And I can't say that I could fully put numbers around this, but this is the type of dance music you want to hear on the floor before you, you know, if you're estimating if you're going to have a good time, this is like a good beat. to dance to. And who's dancing? AT&T. So either their account got hacked with Anpanmans, or they're just super excited. But they're out there like trolling T-Mobile all day with waffle emojis and blood type A emojis, saying like, we're the lion, you're the, you know, kitten, asking people which color shirt they want to wear to what. What's the occasion? Something awesome? You know, women whispering in their ears with our hair standing up like the sad dog and the whimpering dog. They're going crazy. For what? Things are heating up. Makes you question, why are things heating up right when the Verizon CEO is going on tape saying they have a deal with ASTS? Is there about to be a big bang here? Is there about to be something larger happening in front of us all at the kickoff to the Block 2 launch cadence? With a rhetorical question like that, I wish everyone a wonderful weekend, and I'm sure we will have yet another very, very busy week next week. And so I'm looking forward to the stock price being cleaned up after the convert. I think it could happen sooner rather than later. I hope it does. I'm long the stock and I appreciate everyone's continued research on the stock, which I try to collect every week. It's just astounding the level of due diligence and the insight that the Space Mob puts together so that we can all understand this opportunity better so that we all know what we own. Thanks again, everyone. Talk soon. Have a great night.