Why the Street Has No Clue About AST SpaceMobile's Biggest Catalyst Yet

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[00:00:55] Speaker C: This is the AST SpaceMobile Podcast.
[00:01:06] Speaker D: We just basically want the phone to 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. Hey everyone, thanks for joining. I'm in my car. I decided to start up a space just given how bad sentiment is out there and just wanted to take this time and remind people of, yes, the markets suck, macro sucks, Trump is back in Iran. Apparently we are now the enforcer in the Strait of Hormuz and are gonna charge a fee for ships going through there. Which is, I guess, you know, on one hand, Iran's not charging a fee, replacing one fee taker with another, although I think we're charging fees only to folks who want to conduct business with Iran. But anyway, at least, at least there won't be attacks, random attacks. But yeah, I guess this is the tough thing about the whole situation in Iran where there's a compete complete leadership vacuum. And, and so when you're negotiating with somebody, you don't really know if that's the right person who to negotiate with versus somebody who has access to military options and may not want that peace. So, um, pretty tough spot to be in. Of course, oil is up, uh, rates are pushing up because the expectation is that perhaps inflation is going to be higher. And then you've got a rate decision with Fed's job, you know, the Fed governors jawboning about potentially raising rates, which is something that you would expect them to do, um, because it's always good to try to talk inflation down before you actually have to raise rates to bring inflation down. But that's what the market is dealing with. So an insurmountable wall of, of worry, and, um, and that's been hitting all risk assets. And so, um, yeah, this is just kind of par for the course. I think anybody who's been invested in AST for 5, 6 years, you understand the ups and downs of being invested in a large TAM, high-risk opportunity. Although the risk has been, for the most part, a lot of the risk has been taken out and now we're at the stage of execution. But, but yeah, this is just part and parcel of being an investor. But I think it's important, you know, as I looked at social media and people's reactions, Candidly, I think most people are taking it pretty well, which I think is a good sign that folks are not overleveraged, are not in margin, which I always recommend not doing. Because if you ever get extended on margin, it works in the good times. But as Korean investors have learned in Korea, during the bad times, you can get not only your capital cut, you could get completely wiped out. I think there was some kind of statistic overnight that said I think it was like 350,000 retail accounts that were on margin went to zero overnight. And so that's a lot of people levered up on these memory names. And, and so, you know, I think Hynix going public here in the US, maybe that perhaps is a top near-term top for the memory. I mean, good for the company to raise funds and squirrel that away. order to build out new fabs, which over the long run, of course, more, more supply is gonna, is gonna constrain the ability to price. Um, and so that should alleviate some of the pressures. But anyway, all this stuff is kind of intertwined. I mean, I think the market sentiment has been pretty bad for space stocks. Um, they're, you know, we've been going lower on an almost daily but weekly grind since the end of May. And so it's just been With little reprieve here and there, it's just been a straight line down. As Cook mentioned over the weekend, the SpaceX guys who are shorting, I do think, and I'll mention this briefly, I do think there's a decent amount of people who were pre-IPO shareholders who shorted a basket of space stocks or AST as part of that basket to hedge heading into an August unlock. But then I do believe there were these 2 articles out from Bloomberg about 2 pods out of Millennium, which is a multi-strategy hedge fund. 2 index relative value desks made, I think it was like almost $4 billion, which is pretty nuts. And so those desks actually played some of the NASDAQ 100 and SpaceX rebalancing events. And so I do think those desks probably were, probably, yeah, they were a decent chunk of the short interest that has been evaporating recently. But they probably made quite a bit of money on being short the space sector. And so, 'cause you don't, for relative value index rebalance, you don't really make those kind of eye-popping numbers unless you are using significant leverage and you get ahead of the game and are able to actually game the system to make that type of return. Or of course, you know, if you look at where space stocks have traded relative to their peak in the end of May, it seems—
[00:06:22] Speaker A: Yeah.
[00:06:23] Speaker D: 1 1 2. It seems like they were probably involved on the short side of that trade while being long SpaceX, which then once they've closed out that position, by being long SpaceX, they probably— by being short space stocks and being long SpaceX, they probably unwound some of the SpaceX over the last few weeks. And now we're seeing SpaceX get to where it is probably going to start settling, which is near the IPO price. It's hard to believe that. I mean, granted, this SpaceX float was only, only 5% was offered to the public. But, uh, the fact that I remember for periods of time it was over $200 or $210, um, which was kind of crazy. I'm assuming that those, those Millennium desks, those two probably unwound there. Um, and so just, I guess, for people who don't know, index arbitrage, what used to be a very profitable trade, And so you had like sell-side research firms give a sense of what they thought Russell, S&P, and all these indexes would do in terms of who was going to get deleted and who would get added. And, and those, those, um, moves could cause pretty significant, you know, depending on, on trading volumes and, and, and how much is either going to be bought or sold in these names. And so, um, arbitrage desks of banks and also hedge funds would, would go into these trades trying to position, you know, once a company got announced. You know, there was one trade which is like when a company gets announced, it's either added or removed. You would make money, you know, on that move. Maybe it's 5, 10%, even as high as, you know, if it's a highly shorted stock and gets added to S&P, for example, it could be, could be a 20% move. But then, um, over the next few weeks, you would have index ARBs buying the stock that's getting added, and then, and then also people shorting stocks that are getting deleted. But over time, as that trade became crowded, it was much harder to make money. And so I used to do some level of index ARB. And so very, for very specific situations, you could make some money, but for the most part, that, that whole business like kind of went away. But then I think for these desks who have significant amounts of capital, they probably are doing slightly different trades. So not necessarily the straight-up index, but adding some directionality. And of course, because they're pushing so much capital around, they can actually influence how stocks trade. And so they probably helped influence the space sector to move up prior to the SpaceX IPO and index movements, and then they shorted on the way down and vice versa. But anyway, that's my speculation. But, but at least that portion of the trade, the, all the index stuff is gone, I think. Um, and now we're, we're left with the pre-IPO SpaceX shareholders who are still, you know, hedged in, in AST. But we are off the highs, as Cook mentioned. I think real-time short interest as of this morning was kind of in the low 70s, whereas, um, I think we had peaked in the 80s. So, um, So anyway, but yeah, I thought I'd mention that real quick. But going back to Space Mobile, so as the headline of this space suggests, you know, the markets are in turmoil, but the fundamentals for AST couldn't be any better. And so I think it's important to remember these things. And it was a reminder, I haven't done a space in a while to talk about AST. And it was a reminder because our favorite short seller hedge fund guy, bottom signal. Um, Kiryu Onada, who has this like war criminal as his profile picture, he's one of these hedge fund guys who at the right time he'll do like a touchdown dance that the stock is down. And then inevitably that, that's, that is the signal to go long, which he, he came out of the, he came out of the closet and, and kind of reminded people that AST was down today. And so I, my, my theory on this guy, by the way, is that, um, he's probably, he probably is an analyst. Junior analyst at one of these pod shops. And on days like this where AST is down, it just so happens that his long side of the book is probably getting clobbered. And so he's not happy. And so he's got to, he's got to give grief to somebody. And just so people know, and this is just kind of a macro view of how hedge funds have performed, but there's this, there's an index that you can track on Bloomberg. It's Goldman Sachs Hedge Fund VIP, meaning the top mostly held popular hedge fund long names, and then comparing that performance to the most shorted stocks index, which are typically the hedge funds who are long that VIP basket are typically short these crowded names. And so that index is actually pretty close to its, let's see, 1, 2, 3, 3-year bottom. And so these guys actually were doing quite well into May of last year. Uh, that index was like around 350, 360, and now it's come back down to 236. And so it's basically, yeah, it's off by well over a third. And so we're at these levels where it— we have not— I guess the index was last at these levels in 2023. And so obviously hedge funds are hurting pretty bad. And so when you have guys like Kiryu Onoda coming out and trying to make himself feel better and point out AST is down to, you know, whatever, $67, $68. Um, I think it's important to remind the audience that this guy was short, uh, AST, I think around, um, I think it was around $18 or $20, and then he, he literally covered at like $35. And so that, that started the romance of AST Space Mob with this guy where, um, he's always been a reliable indicator of bottoms. And then, then that's the only time he, he comes out. Obviously he doesn't He doesn't come out when the stock is performing well, but him and Pivotal Capital, they truly are real alpha generators. And so he came out today. So his post, as well as Cook posting the white surrender flag, that made me decide to come out of this camp that I was observing for my kids and come into the car and just do a space. But Anyway, moving on. So I think it's important to, you know, in days like this, remind yourself of the improving outlook and fundamentals of the company. One thing that I posted heavily on last week, which I never talked about live because I didn't have the time, was the fact that Chris Hambar, who was the former president of network at AT&T, he recently joined T-Mobile. And this is huge news. The timing of this is all interesting, just given that the Starlink exclusivity ends this month. I think it ends in about maybe it's 10 days, 10 to 12 days. And so this guy joining T-Mobile, who's— he's now chief of enterprise, is a huge deal, right? So chief enterprise officer, he's focused on the enterprise portion of the T-Mobile business, but he's also being put in charge of innovation, which direct-to-device from satellite is obviously a key part of innovation and narrative now of Wall Street. And so this guy joining happens to be just after AT&T and Verizon announced the joint venture, which also invited T-Mobile on board. And so as I've mentioned in my tweets before, if you're T-Mobile entering into this joint venture with these 2 other competitors who've been working with AST for now, what, over 2 years, you probably need someone who knows what they're doing, who not only that, but they understand AST SpaceMobile's technology architecture, the players involved, obviously someone who's allied with Bell. And so lo and behold, T-Mobile hires this guy. They hire this guy in a very senior role after he left AT&T approximately just a little under 2 years ago. And so Now that his non-compete has expired and he, you know, he had a brief, let's call it an internship at Public Storage as the COO, he's now joined T-Mobile. And so you couldn't ask for a more positive and connected advocate for AST SpaceMobile than Chris Ambar. I mean, truly, aside from maybe if Scott Wisniewski was hired at T-Mobile or if Abel joined T-Mobile himself. But outside of those 2, like, you couldn't ask for a better ally and advocate. And so the fact that this guy's going over to T-Mobile and the timing of it all is very positive, right? And so for what it's worth, I actually reached out to the company briefly and just asked if there was— if I could get any feedback on this, and I got no response whatsoever, which is not surprising. But I took that as very positive because I think I think there's probably some sensitivities around communication of this or views or any of that stuff, 'cause maybe there's more stuff to come, which I, well, I'm not saying maybe, I'm pretty certain there's more stuff to come. But yeah, so just so people know, Chris Sambar was the president of network at AT&T. He was responsible for designing and deploying 5G.
[00:15:47] Speaker A: Yeah.
[00:15:48] Speaker D: He was also responsible for developing and deploying FirstNet. And that FirstNet was the whole reason why Abel met Chris Sambhar at AT&T. Abel went to go pitch AST SpaceMobile's satellite service to Chris Sambhar in the context of FirstNet. And Chris Sambhar didn't know Abel at the time, but he was told by former colleagues at AT&T who had worked with Abel when Abel was at EMC, hey, you should go meet with this guy. He's really smart and he knows what he's doing. He's doing something interesting that can be relevant to you. And so Chris met with him and was sold on the idea. He had worked closely with Abel in, you know, because back in 2019 and 2020, and, you know, from that point on, AT&T engineers were involved with AST as well as Vodafone and Rakuten. And so it's not as if AST could develop this technology on their own. They had to work with engineers from the various MNO partners. And so AT&T was a very close partner because of that first introduction and relationship. And over the years, Chris Sambar grew to respect Abel. And so fast forward, you know, when BlueWalker 3 was tested and was successful, you know, and Chris has said this in interviews, he was surprised at how well it performed and that at that point in time they were getting, I think it was 21 megabits per second. download speeds. But fast forward to 2022, you know, he talks about how the relationship with AST was kind of a skunkwork project where it was Chris and then also the former CTO at the time had only known about their close work with AST. And so in 2022, when, when there was some noise around Elon trying to launch a competing product, that's when they took the wraps off of the partnership with AST and they brought John Stankey and said, hey, we know Elon's doing this. And so we wanted to let you know we've actually been working with this company called AST for the last, call it, 5 years, 4 years. And then John Stankey's response was, why didn't you tell me sooner? This is great. And so, and of course, you know, the relationship came much more formal at that time where I think, as people remember, John Stankey in a number of interviews, the first being with the Wall Street Journal, talked about AST SpaceMobile, that relationship and how the technology was, I think in his words, 5 to 10 years ahead of where Starlink was, which is actually true. And so it is interesting that now he's at T-Mobile and T-Mobile knows all his background, obviously. And you can go back and look anywhere on the web about Chris Sambhar's views on AST's technology and then his views on Starlink, which are very, if you think, T-Mobile CFO did a number dressing down Starlink. Chris Ambar, there was an interview where someone had asked, well, what's AST's competition? And Chris Ambar's like, AST has no competition. Like Starlink, like he, in an interview, he talked about how Starlink was grafting on technology to its existing satellites and it was suboptimal. Grafting meaning putting on swarm technologies, you know, swarm, swarm, the company that they acquired, Swarm, which was, I think, in 2021, but grafting that technology on their existing Starlink satellites and how, you know, Chris even knew about the interference issues and all these things, right? And so, yeah, this was a huge— this is a huge win. This is a key aspect of the puzzle, which I think I'll talk a little bit shortly about how the Street just doesn't get it or willfully ignores what I— under what mandate and what reason, I have no idea. You would think that Wall Street wants to make money, but sometimes politics plays a role. But yeah, this guy, you know, as a reminder, Chris Ambar, he's not just an advocate for AST. This guy sat on the board of AST SpaceMobile. He was intimately familiar with and, you know, friends with, familiar with the company, the technology, to the point he sat on the board. Friends with Abel, friends with Scott, friends with, you know, everyone at AST. They went to present, they went to conferences together, they presented together. And then this, this guy, for people that don't remember, he also sat on the subcommittee. So, so on the board of AST SpaceMobile, there's a committee for network and spectrum. And so this guy and Johan Weiberg, and I forget who else sits on that committee, he was on there as well. And so he has intimate knowledge of AST's, you know, plans, and the future, the roadmap, all that stuff, right? And so for this guy to be hired at T-Mobile is huge. I mean, it just kind of pieces together everything that we've been saying for the last, I guess since 2023, that eventually T-Mobile is going to come over, right? And so, I mean, I started working on a post where it just kind of outlining the timeline of T-Mobile's initial partnership with Starlink, but then all of those executives one by one getting pushed out the door. The most recent one was Mike Katz. He got pushed out the door. He was responsible for positioning and marketing Starlink at T-Mobile. And so imagine, like, if you're the executive who's in charge of that and truly believed in it and helped make that decision, and all of a sudden you shift to AST SpaceMobile, it's gonna be hard for you to stick around, right? Because you're quoted in these articles to saying how Starlink is great, and then all of a sudden you're gonna be quoted in articles saying AST SpaceMobile is great. That, that That doesn't work. And so we know Mike Siever got put out to pasture. I mean, there's a whole host of executives that got shown the door. And so not only did they get shown the door, then you get this AST SpaceMobile champion, he gets brought in to— As a key business unit leader, or not even business unit leader, he's in charge of enterprise business and innovation. But this guy's there. So, um, so that's huge. And, and this is something that the market doesn't quite understand. And, you know, sometimes when I would talk about that, people probably are like, well, how do you know that? You're, you're— that seems too, too much of an ephemeral thing. Like, where's the tangible evidence? And so today I posted some of that. It's like, um, I think it was July 7th, UBS put out this deep dive, 47-page deep dive on, uh, satellites' impact on European telecoms, right? And in there, in that research, the only named satellite provider they talk about is Starlink. And they talk very specifically about direct-to-device, how that's— what impact that's going to have. They talk about fixed wireless, how that's going to impact, you know, the internet to your home against the European telcos. They downgrade Vodafone stock as part of that. And so— and nowhere in that deep dive research do they show— they talk about Satellite Connect Europe. Or AST Space Mobile, or the fact that you know coming up in May 2027, the you know Starlink's EchoStar spectrum, it may not be theirs anymore, right? Because that may get that two gigahertz may get reallocated, and part of that probably gets allocated to Satellite Connect of Europe, which is an AST joint venture. And so people are willfully ignorant of this stuff. Bernstein, who I respect— I actually used Bernstein when I was in my hedge fund days. They're an independent research firm. They don't really do banking, so they solely rely on hard fees, direct fees that you pay them directly for research, or you pay them soft dollars through trading. But they downgraded the entire telecom sector, meaning the wireless carriers and then also the cable companies, Charter and Spectrum. Comcast, I mean. And so they downgraded the entire telecom sector because of Starlink, that Starlink is going to be a competitive issue, especially on the wireless side for mobile. And in that report, there's no mention of AST SpaceMobile. And so I think the evidence is abundantly clear. And this is where you can draw a conclusion that the Street really doesn't get it. Research analysts, they're not— so the sell-side research analysts, they're not cutting-edge thinkers, right? Oftentimes because they sit in a seat of privilege, um, because they're in the flows, right? Like they talk to traders, they talk to hedge funds, they talk to mutual funds, um, they're kind of the center of everything. And so on the one hand, people will often criticize them that they're not— they don't ever come up with original thought, um, or they don't add any value. Well, one of their key values is that they talk about flows, or one of the key questions I would ask when I talk to research analysts who's covering a name that I'm interested in is, what are other investors thinking? What are other investors asking? What are their concerns? Because you want to know what is consensus like. If it's related to SpaceX, you know, are people— I might ask the research analyst that's covering SpaceX, you know, after you initiated coverage, what are people focused on? Do they think like orbital compute's going to be big? Are they, um, are they concerned about the fact that the company's gonna be spending a lot of CapEx on on AI data centers like on-demand, which is what, you know, they're releasing out compute power to Relative AI and who is it? Anthropic and Google. Like, is that something, are people concerned that they're moving away from their space roots and they're becoming a data center company? Like, these are some of the questions I would ask sell-side analysts. And so that's the value that they bring. And in that context, When they write research, oftentimes it's not their own insights unless the company is telling them very directly, which oftentimes does happen. But a lot of the things they write about are concerns of investors. And so Bernstein, when they put out a note and they downgrade the telecom sector, it's not because they had this aha moment in their head. Typically, it's not that. It's because of all the conversations they have with investors and traders, that work on their desk and they see the flows and, you know, they're talking with, with the other traders at other funds. It's a culmination of that. So they're seeing where, where the puck is going. They're like, oh, we should downgrade the sector because everybody's concerned about this. And so in their note, they write like, well, this is not a near-term concern, but it's obviously weighing on the sector. And eventually SpaceX is going to get there and become a competitive constraint to the industry. And so as a result of that, Because it's an amalgamation of all this stuff. It's funny, like that UBS report, Stan for Bernstein, there's no mention of AST SpaceMobile because people, like, maybe it's something novel that they've read about and they're just not focused on it. Or the, but the bigger thing is that the SpaceX and Starlink narrative is just too strong, right? It's hard to ignore. It's like, who's gonna go up against them? And then people would be like, in these, like, the IPO perspectives for SpaceX, they're trying to control the narrative, of course. They're like, our competitors are Link, blah, blah, blah, blah, blah, blah, and AST SpaceMobile. It's like the fact that they throw Link in there just shows like, yeah, it's a throwaway. They're not, they're not really acknowledging competition. And so the fact that the Street doesn't really understand that AST is working with over 60 carriers, is working with AT&T and Verizon, is going to sign T-Mobile shortly. I mean, no one, no one has a clue that that's even possible, right? Like, probably in, in, in this emergency report, they talk about how T-Mobile is probably the best of the worst because like they have this partnership with Starlink. So yes, they're going to lose subs, but they're going to gain some level of, of wholesale usage because they're partnered with Starlink. And it's like, no, they're going to drop the— they're going to drop Starlink like a bad habit. Like, it's not— And, and, you know, Morgan Stanley, perhaps like they're a bit smarter. their initiation of coverage for SpaceX, they talk about how Starlink is only going to get 1% of the mobile market in the US. And yeah, it's because these other carriers have an alternative that actually happens to be better in terms of performance and is purpose-built. And so yeah, that's going to be hard. And so yeah, there will be some people who retail, individual investors who are Tesla, SpaceX, you know, fanboys who try out that, try out Starlink Mobile. But because of all the technical issues that we've talked about ad nauseam, uh, it's not going to be even close to as good of a service as you get through your wireless carrier. And then that carrier is going to be augmented by AST SpaceMobile. But that's what I'm talking about. The street has no clue. And so I'm okay. Like, yes, the stock sucks. The stock being down sucks. And there's not much I can do about it. You know, it's at $67.57 as we speak, and, and it just happens to be down with the rest of the sector. Some are down more, some are down less, but, um, it is what it is. However, uh, I, I was about to post this. Um, you know, I feel fully— I feel comfortable because I'm, number one, I'm not in margin. I have a large AST position. It's the largest position I have in my portfolio by far. And I know that, you know, what happens when we sign T-Mobile? What happens when the AT&T, Verizon, T-Mobile joint venture goes definitive, which it hasn't yet, but it will? And then people start actually piecing this stuff together. What happens, right? And so the other things I was gonna talk about, like J-LEO, the Japanese J-LEO program, we should get a formal grant and that project will actually start. It will get funded and start. as early as mid-July, right? So that's what, in 2 days at the earliest? And then maybe it could take a few more days. But at the end of the day, like, I don't care. I don't care if the market doesn't care, because that's $900 to $1 billion of funding, government funding, non-dilutive funding that comes through the door that we did not have yesterday. We did not have, you know, a week ago. By tomorrow, or whatever the day when it becomes formal, we will have it. And that $900 million to $1 billion Once that goes to JV and you get, you know, guaranteed government cash flow, then you can go to a bank. You can go to Sumitomo and say, hey, we got funding from the Japanese government. I want to raise an equal amount of debt against that, against that. And then Sumitomo will say, okay, yeah, we'll give you $900 million of non-dilutive funding and it'll be at some ridiculously low interest rate because it's Japan. And so we're going to double our dollars, right? And that money is going to go towards purchasing launch from Mitsubishi and SpaceX and whoever else, and it's going to go towards purchasing satellites, right? And that, that's money that, um, I think when Scott mentioned that we're not planning to raise additional convertible, convertible bond funding, or, um, you know, there obviously there's no ATM in place right now, uh, where he talked about tipping the scales more towards, um, commercial prepayments, um, I guess he forgot to mention that there's also government prepayments, which is what J. Leo is. And so that's coming. Um, and so that's clearly something that the market is not focused on. I mean, there's a bunch of like crazy social media accounts called Space Mob with a red A in their name. They're writing like all these harebrained theories about this J. Leo program, which I guess maybe the company got. Um, but no one's paying attention to all the riffraff, right? Which is us. They're all focused on the macro. Uh, and no one cares. No one, no one cares until they're forced to care. And what I mean by that is When the sell-side research analyst— no one has written about JLEO. No one has written any updates. And, and, you know, on the Rakuten side, I think there might have been 1 or 2 research reports written, but not really, because it's not formalized yet. But when that's— once that program becomes formalized and the funds, you know, you start collecting funds to build out the sovereign network, which then also becomes part of the fungible federated network of the constellation of Bluebirds, then people are going to focus, right? And, and so the funny thing about, um, going back to the telecom sector, you've got billions and billions of dollars of market cap completely erased from AT&T, Verizon, T-Mobile. And, you know, if you're in this sector— and that goes for the cable companies too— if you're in this sector, you have all these telecom analysts who, um, who cover it for, for their funds, um, they're getting their asses handed to them, right? I mean, maybe they're short the stocks, but they have no idea about AST SpaceMobile, which is kind of mind-blowing. Or I guess if they do, the automatic reprise is to just say, well, it's Starlink, so they're going to just crush everybody, which I guess is fair. It's fair to kind of think that way if you haven't done enough work, but that will change. That will eventually change. And there's this Tim Ferriss perspective of Of the JV being formed so that it could more effectively negotiate with Starlink? No, it's not. None of those players are interested in negotiating with Starlink. AT&T, Verizon, T-Mobile—none of them are interested in negotiating with them. None of them are interested in working with them because it is a big problem, right? It's a—it's—and this is the the appeal of AST Space Mobile. But in the context of Starlink, Starlink could build a global. Communications, or it is building a global communications network. And so as an MNO who is more regional, that's a real competitive threat, right? Because then in an ideal world, if Starlink can get to their goals, they can tell people, hey, you don't have just a US plan, you have a global plan. Here's your price, you can roam anywhere. Um, and that's, that's the ultimate goal of what they have, right? Um, but then from a regulatory standpoint, in terms of sovereignty and a whole host of other issues like That's almost a pie-in-the-sky utopia that's not going to happen. Whereas AST is going to be the competitive response, right? And I remember some guy today, I wrote about AST and he wrote, hey, don't listen to this Yahoo. You should just go all in on SpaceX. Trust me. And then I've been looking at his posts and it's like sad faces of SpaceX. I guess he invested it in the $200s or $190s or something. It's been going all the way down. It's like, okay, sure. Trust me, bro. But, but yeah, I think the— once people— the switch flips for institutional investors that, oh, you know what, I can invest in AST SpaceMobile. It's a pure play. It's gonna be the largest wireless network in the world in terms of subscribers. And it's a pure play way to invest in global coverage that is working in partnership with these incumbents who have all the spectrum, you know, IMT, or what we call cellular spectrum, but then we'll overlay MSS spectrum on top of that. Like, this is a much better way to play it versus like, oh, I'm going to invest in SpaceX, which is a politically charged entity that's competing with everybody on all fronts and trades at a very rich premium valuation. Which way do you want to go? And so, yeah, I think When looking at where we are today, the stock price doesn't reflect it, and I'm totally fine with it because I actually bought some more today. But just like distressed investors, I mean, obviously you don't want big drawdowns, but when they happen, if you're a value investor, which I'm not saying AST is a value stock, but these are days when you are rubbing your hands together like, oh, I can add more, unless you've already obviously added all you can. But, uh, and another, you know, important point, don't, don't be on margin. But, um, but yeah, with all these catalysts ahead, I mean, again, you know, I think you've got to ask yourself the question, like, what happens when T-Mobile does sign with AST SpaceMobile? Or— and because that's definitely not priced in based off everything that I've seen, sell-side research, no one's talking about that. No one's even contemplating that possibility. If anything, um, their Starlink is just a negative net restraint on all of telecom, and there's no, there's no counter to it. There's no such thing as AST space bubble. It doesn't exist according to the Street. And so, um, so yeah, I'm, I'm just like sitting back and I'm just thinking about the time when Verizon joined AST, which was a complete shock to people, and it rerated the stock, um, you know, went from 5 to 39. That's, that's the type of response that you could have. Obviously, there's a lot due to a lot of large numbers, like it's not going to go it's not gonna have that multiple of impact. But, um, but will AST re-rate? Absolutely. Um, how high will it re-rate? I'm not sure, but it will. And then you've got, of course, like, uh, launch execution, production cadence. BB-12 and 13 will ship imminently. We've already got BB-11 on its way down to the Cape. So that August launch, um, is going to be, uh, I think the first week of August. And so, and then after that, you know, sometime from here to there, we probably have our next batch shipping soon. You've got the MLAs with, going back to the JLEO project, I would be shocked if we don't sign an MLA with Mitsubishi for the H3 rocket. And then my guess is that ULA, you'll get a multi-launch agreement with ULA soon. And then, you know, we can go into all these other things, military awards related to Golden Dome. We're still waiting on those. The FCC granted the, you know, we're waiting for an STA to be granted for the military testing in the 900 MHz band. I guess maybe people forgot that we did file that STA before. And then, you know, this grain management, which got approved, I guess it was on the last space I did, or the space before I did, where it got approved. I was doing the space. That grain management 800 MHz sits next to The AT&T and Verizon pulled spectrum at 850 MHz. We already know that AST is working closely with Grain in testing that spectrum. Grain is focused because they have a build-out requirement in 2 years, you know, in 1 year's time and then 2 years' time. And there's only 1 provider, AST SpaceMobile, that can help them meet that build-out requirement. It's not Starlink. Starlink doesn't have in its current roadmap— it hasn't hinted at anything. It has no satellites can use low-band spectrum. Maybe that will change. I don't know. But, you know, if they want to do that, then they'll have to come up with a new architecture in order to serve low-band spectrum. But according to Grain Management's timeline, we should hear who will win the ability to utilize that spectrum. And my guess is it'll be some type of partnership, and that spectrum will then get thrown into this joint venture with AT&T, Verizon, and T-Mobile. But that solicitation process and decision will end sometime before the end of November, right? But you could see, given that there's only one player that can utilize the spectrum, you'd probably hear about that sooner. But yeah, so I think it's important to, during days like this, just remind yourself, go through the thesis, think about what's coming up, and understand what you own. I know it's a very a cliché thing to say, of course, but, but it is true. Um, and so when you see Puke like, um, putting up the white flag, that— those are indicators. Or you have like some of these bears talking negatively, um, that's also a good signal. Anyway, I'm gonna go through some quick comments here. Let's see. What turmoil? The S&P is barely dropping. Uh, I'm talking about the turmoil in high-beta stocks, so they're or in our stock, or in space stocks, or in whatever— quantum, whatever you have it, right? I'm talking about high-risk names that are interest rate sensitive. Let's see, someone's saying it seems like when the next tranche of SpaceX stock is unlocked that there is likely to be selling pressure in SpaceX. Do you think the whole space basket gets dragged down with it? Um, that's a good question. I'm not sure, but by that time in August, you'll have these other events happening. But, but yeah, I, I don't really— just like Cook said, uh, I think it's hard to gauge what impact— obviously SpaceX in general has had a negative impact on the sector, um, but then going forward, as, as more supply of SpaceX stock comes on the market, I'm not sure like which institutional investors or retail investors are dying to sell their there any like Rocket Lab or AST to go buy more SpaceX. But, you know, maybe, maybe I'm ignorant, but it could have some impact. But then again, you know, as I've talked about here, there's quite a few big catalysts that are coming. So, so for me, whether it's the next few months or through the end of the year or next year, I'm bullish. I'm bullish regardless of what SpaceX lockup or what their insiders are doing. I, I really, I really could care less. Let's see, who is this guy? Okay, I won't even acknowledge this comment. It's kind of stupid, or it's very stupid. Um, let me look at these other comments. Let's see, what is your thought on manufacturing cadence? We were supposed to hit 6 per month by late '25, revised to first half. We're still around 3 in 7 weeks. We only added 1 BB-38 in manufacturing last few months. What? We only added 1 BB-38 in the last few months? Uh, but I think it's important. So let's do some simple math. So Bluebird 13 minus 38, that leaves 25 in production. Uh, adding 1 is, is, is important, uh, in just what, a few weeks? But But yeah, the company was originally on a plan to get to 6 per month. I think it's probably, in terms of microns, and we've talked, I've talked about this over and over again, in terms of micron, they can produce 10 microns worth of satellites, 10 satellites worth of microns a month. But then the composite ring with the control unit and everything, we're probably closer to like 4, maybe 5 now. But right now, production isn't the constraining factor, it's launch.
[00:42:08] Speaker A: Right.
[00:42:08] Speaker D: Right? And so I think, you know, you can build as many satellites as you want, but the company, as we know, has lined up several SpaceX launches and we need to add a few others. And then of course, as Kuku mentioned, Blue Origin maybe comes back online in December. But I think getting to that 6 per month bogey, I don't think it really matters at this point. It will when we have an abundance of launch, but yeah. Let's see. Andra says it is also better having this crazy seller pass behind us in the middle of the Iran war chaos before the good news starts kicking in about J. Leo, T-Mobile. Yeah, that's true. And I think, by the way, like you could have some of these things. Oh well, I think T-Mobile put that aside and J. Leo to a degree. You could have some of this news come out and it kind of. maybe falls on deaf ears for a bit, but then you'll have a delayed reaction if the macro is still pretty bad. So just keep that in mind. I mean, I think we are in this environment where correlations for sectors like space, everything's kind of trading together until, of course, you have some material news that changes that dynamic. And you're seeing a little bit of that today. For example, I think— let me just look. I think BlackSky is up 2.9% because they had some positive news about a government contract. And Planet Labs is only down 0.8%, uh, because they— I think they had some positive news as well. So that at least you're seeing some differentiation going on there in terms of performance. Let me just see here, uh, Okay, I already covered that. What do you think of the recent UBS research? Weren't they mentioning AST? Do you think Wall Street already has AST on their radar since SpaceX but won't accept the fact that AST is a serious competitor or better business case than Starlink? I think, yeah, in UBS's case, I mean, it's European research, so not to knock on Europeans, but I don't think they really care about anything outside of Europe. And so AST happens to be outside of Europe, and then Vodafone Satellite Connect Europe, maybe it's just not as well known. But yeah, I think there is some element of the Street doesn't think AST is a serious competitor. And then also there's probably some level of favoritism because SpaceX, it was a big IPO. A lot of people, they generated fees to the Street. And SpaceX also did a big debt offering, you know, $20 billion to refi some existing debt that they had, I think from xAI. There probably is some level of appeasement going on where people are not going to write about AST to a degree. But again, you can ignore it for only so long. And so once this AT&T, Verizon, T-Mobile joint venture goes definitive and they start talking more detailed plans about what they're going to do and who they're working with, Um, it'll become very hard to ignore at that point. Let's see. Anyway, I think that was it. Um, but yeah, just stay focused. It's a tough time. I, I get it. I'm down low 8-digit figures. Um, but that's a drawdown, right? Like, it's not locked in. And so, uh, that's from my peak in May. And shit happens. Like, that's just, um, that which is why it's important not to be on margin and not get tapped out when you don't want to. Um, and, you know, having staying power and understanding what you own. Because the key thing is, is, um, you know, during these periods of time, as I've mentioned before, like, when you have things that you own because someone told you it's interesting to go buy it, or it's like, but you don't do research yourself and don't build your own conviction, uh, that's when bad things happen. When the market suffers a pullback or sector, you know, has a pullback. And, and in particular for AST, it's down with the rest of the space sector. And so people who are— who don't understand what they own or tourists or don't have high level of conviction, you know, they'll cut it. They'll cut it. And that's what we're seeing. Like, people are going to sell at the lows, and then, um, when inevitably the market stabilizes or— and/or AST has positive news, um, they're going to miss out on the big returns. And so that, that's, that's how Outsized returns are made. General, general, generalization, generational— I can't speak— wealth is created. And so, you know, you got to stay focused. And during these periods of time, go outside, touch grass, don't stare at stock prices. I, for most of the day, I was not looking at the stock price because I've been busy. And so for those people that are focused on it and are sweating every single tick, like go do— go outside and do something productive. Go work out. Like, you'll feel much better because the stock is not— the stock is not moving up or down materially from where it is right now in the next few minutes or next 30 minutes. Um, and so there's not much you can do about it really. But anyway, I hope this is helpful. Um, yeah, just hang in there. Some big things are coming. And yeah, the market should reflect it. And if it doesn't at that point in time, uh, eventually it will because that's just how markets word. But thanks everyone for joining, and we'll talk again soon.
[00:47:36] Speaker A: Bye.
[00:47:36] Speaker C: Thanks for listening to the AST SpaceMobile Podcast. If you enjoyed this episode and you'd like to help support the podcast, please share it with others. Post about it on social media, or leave a rating and review. To catch all the latest news about AST SpaceMobile, make sure to subscribe. Thanks again, and I'll see you next time.
[00:48:07] Speaker D: Listen. Mmm, waffles.