Kook's Weekly - October 13

[00:00:06] Speaker A: This is the AST SpaceMobile Podcast. It will just basically come to your phone and be seamless regardless of where you are. We don't want the user even to know that it's connected by satellite. Listen, the opportunity that we have is very, very, very large.
[00:00:27] Speaker B: Okay, good evening everyone. Quite the exciting weekend. I was out camping, so kind of was between packing and getting out the door to beat traffic, missed what turned out to be the end of the world for a lot of people. And so I was catching up once I got better cell phone service at the absolute wipeout in crypto. I hadn't even noticed that SpaceMobile had closed down, let alone crashed to $75 in the aftermarket. And so I was just thinking, okay, how about that? And as a very long-term SpaceMobile shareholder, I'm just so conditioned to these drawdowns where whenever you think you've finally made it with this stock and, you know, thinking, well, finally people are gonna see the bigger picture and You know, we have pictures of airplanes landing. I'm looking at the thing Ant-Man just reposted, which is the Antonov landing in Alaska. I'm just thinking, oh, come on, guys. Like, are we really going to do this and drive this thing down to 70 for no reason? And it looks like the answer was for like a nanosecond, yes. And then the cavalry arrived. And so, you know, just check where we are right now. $86.50 on 51,000 shares.
[00:01:48] Speaker A: Not bad.
[00:01:49] Speaker B: And so where do we go from here? And, you know, to me it's just seeing these satellites get put on the cargo plane is so exciting. And what we know is that FM1 is now on its route to India via Alaska. I'm not quite sure where other stops it might take. It's sort of, it's Earth goodbye tour really for FM1 as it for the last time, you know, gets to visit all the states before its one-way journey into the heavens. And then we have FM2 is going to be leaving by truck any day. And that will be another interesting test of the Kevin Mack theory that everything is priced in. And so there will be a picture of a truck. Going past the Cape Canaveral sign once again. And that means that it's a Falcon 9 launch, which is exciting. And it could very easily be happening before the ISRO launch, which I would personally prefer just because of the certainty of a Falcon. But the market's starting to see what operational execution looks like. And we also saw some things being unloaded From Antonov in Midland, and so I haven't fully scoured every possible angle on that. But my instinct was that those are some of the components, some of the critical path items for satellite packing that we have not yet in sourced as part of our vertical integration. And if that's true, and we were getting some critical path items into the plant, that means that we could you know fast forward a month; we could start to see. FM3, 4, et cetera, starting to leave the factory gate. And to me, this is all about just re-racking the share price to new safety levels, if you will. And so, you know, as I kind of think back on my journey with this stock, a lot of times I'd have to think, you know, my downside is, you know, potentially to zero, which is unsettling. And I was this weekend talking to some of the other dads that knew I was involved in this. One of the guys works at Nvidia, which is interesting. And I have to be honest and go, well, yeah, look, a year ago there was a real chance this thing was going to go to zero. I just chose to not accept that reality and sort of will an alternate path into existence. But the The truth is it had a different return distribution than it does today. And so now I'm kind of thinking of my mindset on Friday when I saw that $75 aftermarket price. In my head I thought like, fine, whatever, bring it. You wanna have a correction? Let's see where that new floor is. We saw that the floor last month was $37, which was pretty annoying to put it lightly, but it was annoying. I got an email from a pretty important person saying, well, I hope you didn't blow out of your shares in September on that SpaceX EchoStar news. And I wrote him back and I went, are you kidding me? I mean, that was like a little mosquito bite. I'm used to kind of having limbs hacked off with machetes. And so when I saw that aftermarket price, My, you know, just to share kind of my internal thought processes. Now we have the Verizon DA, trying to think of all the other news we got. You know, I don't think the market fully appreciates all the Vodafone news we get. And then we have the operational shakedown, which is happening with FM1, FM2. Of course, none of that matters if something systemically were wrong with the technology, but I think we're very confident now with Block 1 that that's not the case. And so these drawdowns from here, I hope, are much more shallow absent something just dramatic in the macro. And that's exciting to me is just knowing that the lows are going to be just annoyances for people that have really adopted the long-term mindset with this stock. And let's talk a little bit about what a rare find this is, just to bring to the front this post from Moore Roger. nothing really makes me happier other than sort of the success and health of my children than seeing people improve their situation in a meaningful way. And so Maura Roger, who's a delivery driver in Seattle, go Mariners, told everyone he makes $65,000 a year. Good for him. But better for him is that he became a millionaire because of his investment in AST SpaceMobile. And so that's wonderful. And so this individual now is highly likely to have much more certainty around their future, potentially a retirement that's more comfortable than it otherwise would've been because of really the space mob for one, but also just because they were a long-term investor in a secular growth company and didn't succumb to the urge to be a short-term investor, whip stuff around, swing trade. And you know, you see these crypto people, what happened to them over the weekend is just stunning. And of course, when you are running 20x leverage on an altcoin, it's easy to say you get what you deserve. But I don't think like that because a lot of people said the same of me when ASTS was $2. And, you know, basically we're having a little bit of schadenfreude of like, I got what he deserved. And you never really want to wish ill on anyone is my life Life choice. But it is nice to see these stories of people that really did the work and now have materially changed their lives, not just sort of like, oh, I had a good little trade, you know, really changed their life. And so why is this so rare? And, you know, why did I, why did Katzi and Panman, well, you know, too many people to name, frankly, Why did we all glom onto this? And so I know my logic was if I was going to have a social media account and kind of share ideas on the internet, I wanted to find something that was going to be the grand slam of all the grand slams. And importantly, one that was going to be a huge secular winner, which is to say that there's really going to be not a wrong price to buy it. You can in the short term, of course, buy at the wrong price. Is 86 going to be the lowest price that he's ever seen for AC Space Bubble? I hope so, but it might not be. But the key is, if you buy it at $86 and it goes to have a correction back to $75, $65, whatever, if you wait a year, will you even remember the drawdown? That's my goal when thinking about the stocks that I would want to talk about. You want to make sure that if someone can hold it, they will generally make money and do well. And so why is SpaceMobile so rare? Well, if anyone's read the Peter Thiel book, Zero to One, it really could be summarized by this concept of ideas that sound dumb and are commonly viewed as dumb, except for the fact that when they're right, it means that you have no competition. And so SpaceMobile was an idea so crazy that even the experts in the industry, AT&T said this directly, all but laughed it off except for the fact they knew Abel and the quality of his leadership. And that's why they backed him. But it was an idea deemed so crazy, others dismissed it. And you could see even recently, some of the legacy space guys who said, well, why would you put your whole ball of wax in this idea? So crazy. Because there's no half measures in life. If you want to sack Rome, you, you have to go cross the Rubicon. There's no other way. When Elon was coming up with Tesla, he could have had a hybrid solution and had a small internal combustion engine there, which would have solved a lot of problems, but it was a half measure. AST SpaceMobile took no half measures. Everything was ground up, first principles design to solve an enormously hard problem, but in a way that would ultimately lead to a frictionless solution and scalable solution for consumers, which is key. Otherwise it wouldn't be the hit. And so there's not very many companies that take a first principles approach like that. And I'm, I'm humbled to the fact that I'm not smart enough to catch many of those, if any of them, except for SpaceMobile. I did not catch Tesla, things like that. I've been thinking a lot about another one that I won't mention the ticker of right now, but I kind of had an epiphany when I was sitting in traffic trying to understand why it is there's so many people trying to drive through Riverside and then realizing that there probably is no real answer to that question. But in that moment, it hit me on another idea of like, oh wow, I get the big picture now. And a lot of these things, you just have to get the big picture to see past all the FUD. And with Space Mobile, there was FUD galore, but we all saw the big picture. And so as we're basking in this euphoria this week, of course, what happened? An ATM. And so I just almost thought when I saw that in the morning, I just went, oh Jesus Christ, like, are we doing this again, guys? And so of course the company should have an ATM. Yeah, they have $1.5 billion of cash, but if you run the model out, they're going to burn that in a heartbeat to put up a valuable constellation and they shouldn't. drive their cash down to zero. That's pretty dumb. And why would you risk your company and make it vulnerable like that to good competitors like SpaceX? You would not. And so they announced dilution. Stock was obviously getting drilled in the morning. And then I had some short sellers, Pivotal, I love you, Pivotal putting some memes in my DMs, kind of mocking me, which frankly, he selected some hysterical memes and I actually had a really deep laugh knowing that I blast his balls off to outer space because I've done my work and he has not. And so imagine my surprise when his balls got blasted off before the close that day. But it is important to appreciate that growth companies need cash, and an ATM is an incredibly efficient way to do it. Cash is the weapon. And a lot of times when you talk to industry experts, they say, well, the key reason why competing with SpaceX is so difficult Does Elon have infinite resources? Well, do they? Not clear. And so, you know, they're having to issue stock to buy spectrum. We have some snippets of what we think their balance sheet is, but AST doesn't have that much lower of a cash balance than SpaceX. And AST has much less risky CapEx. Than SpaceX. SpaceX has, you know, we're having another Starship launch tomorrow. They've got some big boy capital commitments on a lot of things outside of a D2C constellation. And so we're now actually dollar for dollar, probably the most resourced aerospace startup in the world. And if you're a long-term investor, you really want a company that is going to have this type of flexibility. And I really hope that they blew out that ATM all last week. And if they didn't, I hope they do it soon because why risk it for them? I mean, what we just saw in the market is that they could be doing everything perfect in terms of execution, and then Trump sees that the market is at all-time highs, which they are, and realizes that he has a little bit of capital to play with in a way. You know, he doesn't obviously want to have his presidency defined by a the stock market down 20%. And so when he is dealing with house money like this, he can start to play harder on some of these geopolitical issues to advance the ball otherwise. And then of course when the market tanks, if he takes it too far, he'll chicken out and rinse and repeat. And so if you're the company existing in this type of world, which they are, I wouldn't play it cute. I would take the money and know that I can play through Really any type of cycle that comes, and so we had Antpinman do a good spaces on this topic. Honestly, now that the stock is ripping again, you probably don't need to listen to the spaces because clearly people got over it. But there's many reasons why this company is going to want to show a huge balance sheet. Other than never mind the fact that it's a smart thing to do, but if you're submitting a proposal for Golden Dome and trying to be a big boy contractor in the largest defense. project ever, you are going to want to have serious balance sheet capacity. And so I know a lot of people really struggled with the idea that AST SpaceMobile said, well, we're fully funded, so why are you raising more money? And my point is we have a little bit of the Heisenberg principle where you have 2 2 things can be happening, which makes it impossible to see one at a time without influencing the other. And here we have so much growth opportunity that the actual definition of fully funded is constantly moving. And so you have to kind of pause your definition of what do we want to define as fully financed, but then that is limiting to the other growth opportunities that we could also pursue. And this is where I think it's an important point for anyone that's a serious long-term investor to understand. If you're just like a trader and you're, or more importantly, if you're a short, then whatever, you just spread your false narrative how you see fit. But if you're a long-term investor and especially less experienced and you're trying to reconcile this concept of the company selling fully financed and then seeing the company raise more money and then seeing FUDsters say, oh, look, see, they're shysters and they're lying to you and they're You know, they eat fraud for breakfast. The reason why you can take comfort that the FUDsters are wrong is again, this idea of fully funded for what? And so yes, they are fully funded. If they turned off the money spigot, they could go fully fund out the 45 to 60 satellites for the full constellation. That appears to be true. Now it would be tight. They could do it, but it would be tight. So that's the first reason to raise more money is to never have it be tight. The second reason to raise more money is what we found out with Scott is they want to get up to 12 satellites per month capacity to be able to meet government demand. Well, you have to start pulling forward CapEx, pulling forward hiring, which is again, pulling forward burn. These are good things if you're long-term investors, because you're pulling forward growth opportunities, but more importantly, you're making your company more defensible. and more immune from competition. Things like the Legato deal, incredible uses of money. And so you could be fully funded, but then you see a deal like Legato come along. Well, you need more money to do something like that. And I don't know if they might actually end up just paying cash for the Legato prepayment at this point versus using the non-recourse debt facility. Unclear, but they're going to have these options now. And there's, you know, real reasons why a board could consider many different ways to finance their growth, even if they had previously signaled a prior plan. And we also are seeing that this acceleration is happening. And so Rakuten put out a slide just showing that again, there's 60 satellites planned in 2026 and rolling out the service in Japan.
[00:17:37] Speaker A: Great.
[00:17:38] Speaker B: And so balance sheet visibility is what is allowing other partners to see and believe that. And that's also going to go hand in hand with DAs getting signed. As the project becomes inevitable, MNOs need to shit or get off the pot. They have to start getting the DA signed and Verizon, which we'll get to in a second, is A big kind of boulder that is going to, I think, cause a massive avalanche. So the visibility of our satellite getting on that plane, and then what will shortly happen is the visibility of our satellite getting on a truck to the Cape, is going to show the world that this constellation is now over its constellation constipation, which is an idea I put out maybe a month ago of it. It takes a while for these satellites to really get, or the satellite production capacity to get shaken down. There's a lot of pieces to this puzzle. For example, some of the parts that are not internally made, you might have some critical path items you need to secure, which evidently were dropped off by this airplane. You needed to get the control sat down, all these little things. But once you get them down, the production lines can start humming. And that's where the operational acceleration occurs, and that's what you're really seeing in the stock price, in my belief. And so then where did the shorts really get their ass handed to them this week? Well, Scott did something very funny, which is he announced an ATM, which anyone that's been a long-term investor here knows that typically has meant the stock is gonna trade heavy for about a month. And we just had a really nice run in the share price. into the '80s. They announced an ATM. I personally woke up that morning and, you know, of course was like, oh God, like, okay, put on your big boy pants. It's smart to raise money. All these things I just proclaimed earlier as truths, but I'm also human. So I was like, ah, God, okay, fine. And to me this just meant I was going to have to deal with this stock churning around for another month as the market just basically Repeated what it typically did is assume the company pumped the stock, did the ATM, but had already shot all their bullets, which that means it's basically like a free look for shorts to grab 15, 20, 30, 40% in the drawdown phase of the stock. That's what's typically happened. And like Pavlov's dog, the dog started salivating. Well, instead of getting Fed the shorts the next day, found out that they had had an electric shock collar installed in their rectum, and they got blasted beyond belief when AST SpaceMobile announced a DA with Verizon.
[00:20:26] Speaker A: Whoops.
[00:20:27] Speaker B: And so the fundsters had actually been pretty adamant that Verizon was going to walk away from AST SpaceMobile. You never heard any of the core Space mob researchers, which I include myself in that group, say that that was going to happen. Many of us had various sources of information, various instincts, etc., that led us all to the same conclusion in different ways. I knew that I had 99.999999% certainty Verizon was going to close. I didn't really know what was influencing the timing, but here we are. And so to the broader market. There was real uncertainty. Why was it taking so long? It was almost a year and a half. What could go, what could be going wrong? And so I could see how this was a massive relief to Standard's buys and to people that were looking for more proof points. This was probably one of the big ones. And so it is no surprise that the stock really ripped. The uncertainty that was alleviated was pretty meaningful in this. And it kind of goes back to reconciling the Kevin Mack statement of, well, everything is discounted. Well, not really, Kevster, because what's actually happening is a risk-adjusted probability of things might be discounted, but you don't know necessarily what the implied probability is in the market. And I think that's a big disconnect with the space mob. versus the general market is a lot of people haven't really focused on this stock. So they're probably pricing most of these events with 20% probability, 30% probability, something like that. And the magnitude of these events is actually quite high. And so moving the probability from 30% chance of happening to 100% chance of happening when it actually happens results in a really big change in the share price. And so you could argue until you're, you know, White in the face of what efficient markets mean. But there's asymmetry where I believe the space mog just literally knows those events and the probabilities of those events better. So we're sitting here saying this thing is worth way more. The market is inefficient because what we're saying is the probabilities are wrong. And why do we think that you know this group of knucklehead retail investors? Hardy har har, we're not retail, but. You know, why do we think these knucklehead retail investors have a better grasp of the probabilities? Because we're doing more work. We literally have, you know, maybe 50 to 100 people that are spending all of their time all day researching, look, did Abel have enough fiber for breakfast? Because of course we want to make sure he's alleviated from constipation. And yeah, I think we just spend more time because all of our money is involved in this. I did the math. on myself because I really have probably very deep, deep psychological problems where I have, as I found out when I did the math, actually 85% of my net worth in this stock, which it doesn't really sink in, which is something I struggle to understand how my brain works because I shouldn't be able to sleep at night when I'm trying to be honest with myself. I shouldn't sleep in past the market open, which I do often, or just go surf. Like I didn't even really know or care about the blowup on Friday after market. Someone with 85% of their net worth in a single stock pre-revenue satellite company should probably not be as relaxed as I am. And so I don't know there's a right answer to that. I'm just pointing it out that you're on the phone with someone who's probably verifiably insane. So just trust your, know your sources. But when I look at this, And then this is when I was talking to Tut, he had some good observations. It's just ASTS is such a simple story that once told, everyone can understand it. And so even though we do all this work and we understand details that other people really never have to understand, when you're actually doing the drive-by pitch on it, it's a super simple story. And, you know, that's my, my belief is I think I've said this in the you know, maybe a year ago too. And my belief is at some point, not yet, but at some point AST SpaceMobile will be the stock that everyone talks about. It will be the barometer of the market, which, which can seem like a crazy concept. But I remember, you know, a long time ago when Bitcoin actually made its debut on sort of Bloomberg top, I thought, well, holy crap, I bet these guys never thought this would be such a mainstream asset where it'd even get a mention On Bloomberg and sort of be validated that way. And needless to say, boy, did it go a lot more mainstream than that. But this simplicity of the story, and even this weekend when camping and desperately trying to watch the Mariners-Detrent game without a cell phone signal, when I explained to the other people I'm camping at, just saying like, hey guys, this is the last time this problem will ever occur. Everyone understood it. Everyone saw the need for it and was captivated by it. And that's what's neat here is people can really dream a dream on this stock and your imagination can run to sort of boundless sort of opportunity because you very quickly get beyond the dead zone theory. And when you dig deeper, you start to just see the extent of what the market opportunity is. So then moving back to Verizon again, Amped Man did a good Spaces and I've linked that out as well. So if you want to find it, looks like 6,800 other people already did find it, but it's the paradigm shift. And for me, Verizon, back when they announced it back in May of 2024, that was the kind of oh crap moment for me. because you do the math, that just means AST has locked in 60% of the US market, which is a monopoly threshold to me. And so if you've locked in a monopoly threshold in the world's largest telecom market, then you're likely going to lock in a monopoly everywhere else. So then you have a global monopoly and then you can in fact chill out, sleep in past the open and not worry about things. Here we are. And so that's why the Verizon announcement is Very important because it goes to validation, whatever. That's a feel-good story. You know, someone validated my tech. Well, they've already showed the stupid cell phone's working, so it's validated. What this actually does is seal the commercial moat, and a commercial moat once sealed is hard to unseal. And when you start to have a monopolistic moat. created through commercial strength, never mind tech strength, never mind regulatory strength, you start to have a high moat business. And I've been told that that's a good thing to put your money into. So I did. And then now we're having the press pile in. And so PCMag said, forget Starlink.
[00:27:37] Speaker A: What?
[00:27:38] Speaker B: How do you forget Starlink? Forget Starlink. Verizon is all in on AST SpaceMobile for satellite phone service. PCMag. Wow. Forget Starlink. Hope Tim is listening. What a loser. So now we get to the MNO deal or no deal. And so, oh, actually, let's actually talk about one more thing. So with the Verizon press release, what was interesting to me is that there was no prepayment. And this proves that AST SpaceMobile Management are liars because they said we were going to get prepayments. So I'll wait for the cash open and I'll just sell all my stock on a market order because of course if there was no prepayment, then the entire thesis is busted or not. So it actually is very interesting. Someone will point out, well, Verizon already did a prepayment. Well, I was actually kind of expecting another one. And so if someone had said, hey, Kasey, what are you actually expecting? I thought Verizon was going to come with a massive upsized prepayment deal. And I didn't really think about that a lot, but when the DA hit, it made me think about it more. And the thing we don't know, but what I could reasonably expect is that when you're negotiating these DAs with MNOs and you say, okay, well, all this stuff you're dealing with, if you boil it down, what are probably the key things that matter the most if you're AST SpaceMobile? It's The revenue share, it's the prepayments, and then probably things around exclusivity. And I'm sure there's some key details that I'm just not sophisticated enough to really appreciate. But if we hone in on the revenue share and the prepayment, I would believe, I would tend to believe these things move inversely. And so as you ask for more prepayment type consideration, I could see an M&O saying, yeah, that's jolly and well, we will finance your business for you, but you are going to effectively pay interest on that with a smaller profit share. And so I could see Scott sitting back with his abacus and going, perhaps there is a relationship between not taking a prepayment and instead funding my business perhaps with an ATM, but then getting a very different and higher commercial chop or revenue share. And math that's not going to be made available to us, but we can start to guess that there is going to be a net accretion, net dilution calculation he's going to do where on one hand you could say, well, I'm not going to blow up my share count by another 3.3% because I'll have all the prepayments, but maybe my revenue share goes from 60% to 50%. And he does the math. And so what's interesting is with such a high stock price, I could see AST SpaceMobile actually saying no thanks on the prepayments. We'll just take a higher revenue share. And I could see the MNOs going, yeah, okay, fine. You know, you want to take the adoption risk, you, you know, you want to own that upside. If you believe so strongly in your service, amen. Because from an MNO's perspective, they're going to get paid in multiple They're going to get paid because of lower churn. That's a big one. They're going to be generating magical revenue from heaven that literally, or from Leo to be more precise, so the bears don't think I'm exaggerating. So magical revenue from Leo that they otherwise wouldn't get. And so this is all just net revenue to them, not a net cost. And so if they can actually then not even have to pay upfront for it, All the better. Let these other guys roll the dice. And so that's my theory of what is probably a dynamic happening. And I'm not saying that there will be no prepayments because I'm sure there will be, but with the company able to raise capital so efficiently, I could see them now in a position where they can actually play for much bigger value creation for us, the shareholders, than they might've previously thought possible when they had to rely more heavily on the kindness of strangers. the MNOs. So just a thought is something that occurred to me. So then we had Canada, you know, similar to the Blue Jays, decided just to lose. And so Scotiabank really kind of foretelling a spirit of being a loser, decided to download SpaceMobile right before the stock ripped in their face because of a flurry of confirmatory fundamental events that proves that the diligence is all right. And so they've apparently been compromised by short sellers. So, you know, good luck to them in their life, but I've included it here. Uh, Pivotal Capital was really quick to retweet this, as Pivotal Capital would be. And he even did the, um, the extra work of highlighting all the, the really negative things, which is always super great. And so they're basically just saying that AST SpaceMobile is delayed. And so people might ditch them for Starlink and Starlink has this next generation satellite. What else did they really say? Yeah, yeah. Starlink, Starlink, Starlink, Starlink, Starlink. And WhatsApp might trigger Starlink's DTC launch in emerging markets. Again, funny joke because WhatsApp is working with Vodafone and AST SpaceMobile. Which was released in a video. So that's exciting. Scotia Bank totally bottom ticked it. So there's your sell side for you. And then we had Asymmetric Bets chime in. I'm just trying to think what his point was. He said the Scotia Bank analyst is tacitly admitting that he doesn't understand the DDD market. No MNO is leaving AST for Starlink anytime soon because of delays. Starlink needs an additional 2, 3 years to get the V3s anywhere comparable to what AST SpaceMobile has now. Yep, that's true. So wonderful. Now moving on back to organizations that do good diligence and think big, we have the SDA director. And so they again remind us that the HALO program for which AST SpaceMobile is a recipient of an award is focusing on demonstrations with the launch of 2 identical satellites. And then 12 to 18 months after that award, the prototypes will basically dovetail into, you know, the purchase of tons and tons of satellites to deploy the system. And that's what we all think is happening here is that FM1 and FM2 are the SDA demonstration birds, which is very exciting. It's very exciting to get those in the air. And I think that that's another material de-risking event in the eyes of the market. And then you have the Space Force setting up more and more funds to get these technologies into the world. And so there's a spacenews.com article that's linked out, which is titled Defense Money Will Pour In, and it's a working capital fund that will be used to buy satellite communications and other commercial space services from the Department of War. Great. And then we had some user, uh, Tux. Tux is great. Um, go through the fiscal year 2026 Defense Authorization Act and just highlight that for satellite communications, there's just like a little line item here for $114 million. And then there's another line item for $212 million for assured positioning, navigation, and timing. There's just all this money that is going toward this space as people try to stay ahead of the curve. And I think there's really going to be money for everyone. And then you had Trump come out and say, we are closely working with Canada on the Golden Dome. Golden Dome is happening. I don't have a firm grasp around the impact of the government shutdown on this. It is already prefunded. in the big beautiful bill, OBBB. And so, you know, we're getting press releases out about that. I did understand that some of the bids were delayed until October 16th because there were so many questions that were coming in. And so it is moving forward and I don't know when it'll ultimately be released, but the market's kind of, I think, telling you that We're in a good spot. We also had a senator, Kevin Sparks, go visit the Midland International Air and Spaceport and take a look at the goods coming out of Midland, which are AST SpaceMobile. So that's exciting. And I actually don't know much about Senator Kevin Sparks. Let's just do a quick— Review. So he is a Texas state senator, so less important obviously than a US senator, but still more politicians really understanding what's happening in Midland, which is great. Now what we'd want to see are more US senators touring the facility. 'Cause that's usually a sign of a very specific thing that's about to happen. And then we've got another tweet coming out of Tough4R who kind of came out of the blue. I've started to really follow his work. Seems like this person has a military background. You can kind of tell a lot about someone by how they tweet and what they're focused on. And so you just keep an eye out on what this person's sharing, 'cause I think that they're coming from a pretty informed perspective with I say informed in terms of relevant industry background, not informed as in they know something that they should be keeping private. So this is a person I think has a background because they really started to highlight some of the contract specifications that are out and help me sort of sharpen my own focus. And the next thing we have is another reason why cats can never quit is right when you think you've identified everything, Then the DOD drops a program called Silent Swarm, which we're being told is something we should really focus on. And so it's just another defense communication system, which we seem to be pretty, you know, pretty well suited to handle. There was a really interesting article or interview actually shared by Peter Lindmark, which everyone should watch. The tweet is titled Jennifer Manor Speech. And so Jennifer Manor is our in-house spectrum regulatory person. And she came from Legato back, OG Legato. And then was at EchoStar. She's very, very respected, prolific author on spectrum strategy. And so she, Gives an interview, and you know some like snippets of just kind of what is top of her and top of her mind. And she notes that we've already done video streaming. She says, "Look, we're going to do eighty six ninety six satellites for global coverage, but we're going to want two hundred forty eight for the extra capacity." She brought up yet another word which we've talked about last week, which is data sovereignty. And she tied this into how AST's precise. Beamforming technology allows the company to operate with data sovereignty in mind in Europe, where you have very tight and complex borders. And she referenced Germany, for example, which has 9 borders, if I remember correctly, versus the US, which only has 2, and our borders are super simple. And she made it explicitly clear that our technology is very focused on how to protect this spectrum so that you don't interfere with MNOs across country borders and how they are focused on protecting the MNOs from interference issues and how they're keeping the data in a country where it should be versus having it unsecure, which is what happens with SpaceX and being shot to a gateway that is not controlled by a country. And this plays into whether or not a satellite provider can really accommodate regulatory requirements like lawful intercept. And things like that, which is very important. In fact, probably necessary. And so it's important to keep an eye on what she's saying and then appreciate how AST SpaceMobile was again, a first principles company designed to meet really all the requirements that are needed versus SpaceX, which was hacked together technology from Chamath. which wasn't built from the ground up to solve this specific problem. And it's a very important point in my belief as to why ASCS is going to have the vast majority of the MNOs sign up, which is already well in motion. Another thing I was talking to AmpMan about, we've been just trying to get better at identifying some of these bigger secular trends in the market. So many of them are so obvious in hindsight. Even if you, ironically, some of these things where you do like 15 minutes of diligence or 15 hours of diligence and you go like, huh, I don't think that building nuclear power plants is going to be as easy as the market thinks. But the 5 minutes of diligence of we need more power ends up being a good theme to really understand where a market is going to send price signals. And MPN just kind of said to me, he is like, well, you know what, the second trend is space. You know, if you're going to actually bet on a big trend, you know, AI, quantum, blah, blah, blah, you know, those are probably all big trends and, you know, they're, I see why they're exciting, but space is too. And we had the FCC come out again this week just saying we want to go fast. And so we had Vlad come out just highlighting that, you know, the FCC is Space Month and they're looking to make a major move for satellite DC networks. They're overhauling how the earth stations and the spectrum are approved, you know, really just letting this industry go fast, which we really need. And so I haven't followed up on the dockets in the past week, but, you know, we're only, I mean, 2 weeks away from the comment period closing for our SES application. And, you know, you better believe— oh, now actually, sorry, I see Kevin Chen's update. So yeah, on the 23rd of October, the replies and responses are due. And so this could be getting approved, you know, in 2025 potentially. And this regulatory approval will really be putting a nail in the coffin of the bears who said that, you know, this technology would never get approved. And the FCC is telling you that they are going to make it happen. So now let's go to Vodafone, which, you know, it's amazing. We're in a quieter week. This Vodafone, these Vodafone updates are really enough to carry a weekly. But then, you know, when you're having Verizon and all these other things happen, it's easy to kind of get on, you know, the back of the newspaper. But Verizon put out a video and again says in partnership with Meta, small company of somewhat You know, meaningful relevance in the world. AST SpaceMobile, they are having this technology hub in Malaga, Spain. And this is where we learned, you know, more about just, of course, Facebook wants to have WhatsApp tuned to this. Of course it is. And so this just shows though that the Mag 7 are starting to become acutely aware of this technology and actively working with it. And, you know, this could lead to some exciting developments down the line. It obviously already led to the exciting development of Google making an investment in the company and clearly working with AST to make sure Android devices work very well. We're waiting on what seems to be the inevitable day that we get a press release around Apple. Same goes to be said with Amazon. Congratulations on what? Microsoft might be maybe a little slow on the 8 ball, but Makes a lot of sense why they'll care. The intersection of AST SpaceMobile with the Mag 7 is not that different from NVIDIA's intersection with what was the Mag 7x NVIDIA too, where all of a sudden the worlds collided. And then, you know, kind of like the Hadrian or the CERN particle collider, you know, if particles slam fast enough.
[00:44:32] Speaker A: Yeah.
[00:44:34] Speaker B: You know, wow, boom, energy is created. And so I think the worlds of AI and just general consumer internet are very quickly going to be colliding with AST SpaceMobile, and that's going to wake the world up and goes back to why I think AST SpaceMobile is going to be the stock the world talks about. So then we had another catch. Rocket Tank 123 is a great account to follow. And they pointed out that in this Vodafone update, they noted S-band. Well, we don't have S-band yet. And so they're indicating S-band will be utilized in Europe, likely by Satco. And so this was shown in their testing slide. And so again, the eagle-eyed Space Mob is You know, catching anything that is ever caught on camera. And so then the S-band is very interesting because this plays in a little bit of the Legato adversary proceeding within Inmarsat, where Inmarsat was trying to preclude AST effectively from going international in S-band, which was vehemently denied that AST would ever accept such a condition. And then we have the ITU priority rights that the company bought, which bears would say are not worth anything, but I think they're missing that they're vital. piece in a game of chess. And we might now just seen another card hit the table here. And it makes sense that Vodafone could certainly be making some things happen for us in terms of getting more spectrum. And that I think is going to be a thesis for the company over the next couple years. Once people really get a handle around the base business and never mind get a handle around Legato, then I think that there's going to be, you know, what started as a joke by me of ASTS is the first spectrum treasury company. I think that's going to be true. And so I think it's going to be an example of the meme, you know, they're doing the meme. And then what we're going to see over time is people are going to realize that AST SpaceMobile is actually the vehicle for the most accretive spectrum acquisition globally. And for all I know, that could end up being actually the core value driver of the company. As you know, this company, if it is going to start to be, you know, multiple hundreds of billions of dollars of value company, which I firmly believe it is, I think a big chunk of that could be driven by an unfair advantage in spectrum acquisition. So further out thinking, but I think it can be very important to have some further out thinking. Going back to Kevin Mack explaining why he sold Nvidia 23 years ago and laughing about it. Well, easy to have done. I'm sure back then there was a lot of things that happened to Nvidia, but if you could have a glimmer of a dream, you know, a glimmer of a dream to see a big idea in a stock, you'd rather know it and think about it than not. Because I personally don't want to underthink something where all balance of probability is telling me that there is a really big opportunity. You don't want to underthink that because overtrading and overactivity, I think it tends to be the enemy of successful personal investment results. And so, you know, if you're already sitting on the beach, stay on it and, you know, enjoy. Good things tend to have more good things follow. And so now let's get back again to the TAM. There's an article about the guy that lit the Palisades wildfire, which was not a very courteous thing to do and burned down an entire city, which impacted quite a lot of people. And as the failures of Los Angeles, which are many, including but not limited to the Palisades fire, they did note that the LA Fire Department Is making a lot of changes. And so they're going to be adding network redundancy tools, including Starlink satellite internet service to be able to maintain communication lines when traditional methods fail. And so when reviewing really the update they've given about how this fire really happened, a lot of it comes down to just chaos. People are not able to communicate. Radio frequencies were overwhelmed. Systems weren't available. Information could not move. It's a classic thing of Chaos sows disaster and people did not have good systems in place. And I think that this is a telltale of what's going to happen. I think every single emergency response force in the US, if not the world, is going to be having these types of redundant tools in place. So it's good for Starlink for sure, but it's going to be great for AST SpaceMobile as well. And that's when people think about the TAM. FirstNet is just the beginning, and they're going to be willing and able to pay quite a lot for these tools when we're thinking about what our ARPU is. And so the story just keeps getting better, sadly, because of the failures of our existing technologies and the horrible prices people pay as a result of those failures. But in an effort to not have those mistakes continue to repeat, we are seeing changes being made and we're right at the center of that. We also then had Verizon, again, did not ditch AST SpaceMobile, but then there was a VP at Verizon Frontline, which is their version of FirstNet. And he said, this isn't just about technology, it's about providing the critical communication that helps save lives. At Verizon Frontline, we're committed to ensuring Those on the front lines have the most advanced and reliable network, no matter what their, where their mission takes them. Hashtag Verizon, hashtag public safety. Some other things, hashtag AST space mobile, where he reposted the AST Verizon DA press release. So another card hits the table as well. So I guess we're getting the Verizon first responders as well, which of course we would. The TAM just keeps going up. And then we had Kevin who never sleeps, highlighted an article where Joe Madden, who's a legacy, or I don't want to say legacy as if that's a bad thing, but he's a very tenured expert in the telecom industry, kind of dancing around saying expert consultant because obviously that tends to have negative connotations, but he's a respected guy in the industry. I'll just leave it at that. And so in this article, he just points out that the TAM is going to be really big. The fact that AST SpaceMobile can receive the uplink signal through signal through a roof and through many vehicles opens up the market dramatically. He points out that 80% of traffic is indoors and at least half of the outdoor traffic is inside a car, train, or other vehicle. And his point is that AST is going to be able to service that market well, whereas many other systems like Starlink, Apple, Skylo, all these guys cannot. They need line of sight. And so that's the TAM that we're able to access. Then we also have Kevin Strix again, AST Space might be talking about TAM. And so we have Luis Abud, who's our VP of commercial, was presenting in Brazil and talks about the fact that AST SpaceMobile is breaking down the idea that this service really only applies to, quote, mountain climbers. And so he really talks about the capabilities of this. And we all know where this story is going to end is that most people are probably going to be using this. more often than they think so. And then we always want to put these in numbers, knowing that with a secular winner you have multiple variables. And so people will go, well, what's the growth look like? And they hold the TAM constant, the total addressable market. But a great investor tends to take a separate bet on the TAM itself. And so if you find a TAM that's big, but then also identify that that TAM is likely to grow quite a lot as well, you have this double push of a company gaining market share within a market, but then the market itself growing. And that's additional growth available as well. And so Barclays comes out and believes that the D2D market is going to be $30 billion a year by 2034. And that, you know, SpaceMobile is likely going to be the dominant player in it and what's likely to be a duopoly. I think what the surprise is going to be is that that $30 billion market happens much faster than consensus, and that it's going to have a growth rate attached to it, which is to say that that $30 billion is going to be a much bigger number, which is very exciting. But that's kind of my reflection on looking at, you know, a lot of markets over time and where you can win huge as an investor. And so if you rewind the clock 20 years ago on SaaS, People would've seen like a very small TAM, but it was growing very quickly. All you, and you could not possibly have anticipated how large that TAM was going to be. Same thing with cloud computing. Right now, I think people are actually, you know, probably pretty aggressive in assuming what AI TAMs are going to be. So I'm going to leave that one out, but that's because they've learned so much on SaaS and cloud computing TAMs and just how to be wrong by a million miles in terms of how big these things can be. And I think that's what's going to happen here. And we're seeing every day that the D2D platform is finding more and more use cases that expand far beyond dead spot coverage. And that's a real important point to hammer home, especially to the shorts, because I think that's what's going to really crucify them in the end is really just not understanding how big this market's going to be. And then we have Catsy. Some of you might know our Swedish friend, and he pointed out an interesting little pattern is that Verizon made a DA with ASTS before they made a spectrum deal with Dish and EchoStar. Uh, whereas AT&T already had a DA with AST SpaceMobile and has closed with Ergon. And so he points out that companies, once they've been able to find out how they can deploy spectrum, then they go do it. And so this is the spectrum enablement thesis that if true, ends up being very, very powerful for all stakeholders and something we are going to want to monitor very closely in the future to just see how true it is. And there's really 2 paths though, is ASTS allows MNOs to grow their spectrum portfolios or utilize them more efficiently, or AST SpaceMobile itself acquires that spectrum and then effectively resells it to the MNOs or makes it available. But in any respect, what's really happening is the world is very, very quickly potentially finding ways to more efficiently monetize spectrum. And that's music to the FCC's ears, for its worth. Now, never to have a dull moment, a week would not be complete with an amazing video by Blue Origin showing New Glenn 2. And now this is a handsome rocket, if I could say so myself. And so it is really big. It is on the, whatever they call it, doesn't look like a truck, doesn't look like a train, but the rocket mover. And that's going to be teed up for launch pretty soon. And, you know, we wish them Godspeed as they do it, but it looks, it is a beautiful machine. So I wish those guys the best. But now it's time for straight talk with Kuk. And so Sebasque points out that there's going to be 3x ASTS leveraged ETFs coming on December 22nd. And so I know it's a very unpopular thing to say as AST space mobile stock just goes straight to infinity. But please, God, be careful if you're going to be making an investment in one of these leveraged ETFs. Make sure you understand that these are really not good vehicles for long-term holds because of the way the volatility decay works. You're always effectively buying high and selling low, and you might find yourself having been right on your thesis but still not having made money because you're implementation through security selection was wrong. And then also on Friday, it just goes without saying that a lot of people that had done incredible amount of due diligence on Fartcoin and really believed that they saw something the market had missed and that Kevin Mack was again not respecting how the market was inefficient, you know, got liquidated. And, you know, I got asked by someone in the comments of, you know, hey, Cook, you know, do you think I should use margin to buy Space Mobile? And I don't know, you know, you be you, but The reality is, if you're asking me and you have no idea who I am, I could, for all you know, I'm an alien. If you're asking me for advice of whether you should have a leveraged position in a 100-vol stock, you probably should not be doing that. And what you really want to avoid is being pushed out of a trade. And so if SpaceMobile is going to become the dominant secular winner in a huge industry, your priority should be making sure you're alive and solvent to see it happen. And now I've probably been way too scarred over the years of these drawdowns, which are pretty severe, but I strongly believe that the drawdowns in SpaceMobile are going to be much shallower going forward than they were in the past because of a lot of reasons, which should be self-evident. But just make sure, you know, when the market's really pumping, make sure you don't get overly exposed or bullish at the top. which can really rob you of the opportunity to, A, you know, make some good moves when the market's kind of having a temper tantrum, or worse, stop you out. And then you don't get to enjoy the benefits of being a long-term holder. So anyway, I just feel like I should say something about that. And because the market is hot, I'm uncomfortable, you know, when things move like that's because I'm, I don't know, I'm just, my daughter calls me the party pooper, so that probably sums up my emotional composition with these things. But just want to make sure, you know, just don't think that a 3x leveraged ETF is necessarily a safe thing. So now let's get to the Pivotal Capital short thesis. And so he was excited that I was going to give him airtime. I invited him to actually present his short thesis on the Spaces as going to be I told him I'd be like Charlie Kirk, that I would be, you know, I think he said agreeably disagreeable or something like that. And then he didn't want to go on because he didn't want his voice exposed, which I could appreciate. So I said I would just publish it in full if he had a thoughtful thing he wanted to share with the Space Bot. So surprise, surprise, Pivotal Capital being the intellectual weed that I think he is. He didn't send me anything. And so anyway, we can all conclude that Pivotal is short simply because of genetics at this point. And you know, there's nothing you can do about it, bro. If you want to send me your short thesis, offer's still open. I strongly believe that I'll be getting the short thesis if AST stock goes down. That seems to be the tendency. But instead of short reports, we actually got some amazing long reports. And so I've been still trying to get my hand on the Piranha Capital one, which I don't think they've released to the wild yet, but this 10 West letter was fascinating. And so I posted a link here. I think Redrum was the one that brought this to my attention. So thanks as always to Redrum. But you have this really, really nice write-up and this person I've never heard of, and I don't know how big their fund is. I didn't see them when I was digging around for 13F, so I think this is a pretty small manager, but don't let size get in the way of being a good thinker. And so this person clearly is a long-term concentrated investor. Sadly for me, they own a bunch of Cloudflare, which I had owned a lot after it was pitched to me by— maybe it wasn't a SPAC, it was actually pitched to me by a guy I work with, but I sold that for reasons that seemed right at the time. I thought the founder just was a huge asshole. And so based on the founder's Twitter account when he was kind of posting pictures of his Porsche. And then when he missed earnings, he threw his sales team under the bus. And I was wrong in my instincts, but I thought that a CEO that specifically blames his own team is someone that is not accountable and it's probably a reflection on some deep flaws of that person. And this guy, Eric, I think his name is Eric Prince, something Prince, was also in the Wall Street Journal in an article about him like suing some elderly people in his neighborhood because he wants to build some $100 million house. in Park City or something like that. Didn't seem like a good person to me. So I decided to sell that stock. Of course it went straight up.
[01:02:14] Speaker A: But the—
[01:02:17] Speaker B: got distracted. So SpaceMobile though does a really good job of framing it. And so I love this type of thinking, and this is consistent with what I was talking about a week or two ago of just trying to squint and see the bigger picture. And so obviously we all know that Amazon is not a book company and bookstore. Yep. You know, that evolved. We all know that Nvidia is not a gaming chip. Okay. Obvious in hindsight. You know, move on. But he points out that SpaceMobile is really selling, he says selling photons. And so what is AST really doing is it's effectively the most efficient way to leverage electromagnetic spectrum anywhere on Earth. It's a big idea. It's globally scalable. And then the use cases of being able to use spectrum are ever expanding and increasingly important. And so, you know, abracadabra, that should be a really big idea and have a lot of upside. So I'll let you read the letter for yourself, but I thought this was very thoughtfully written and want to make sure people Have the chance to see it, and then the last tweet we have is just simply the rapidly expanding launch industry we have. And so tomorrow, I believe we have Starship making another go of it. I'll look on Calshi later to see what the odds are of this thing being successful, but we'll see. And then we've you know again we already talked about New Glenn rolling out onto the pad. Which is exciting. So I think that the supply shock to the launch market is going to be quite incredible in the coming years, and that's a good thing for companies that rely on launch. So we are short launch. I think launch is probably not a great business. I would love to one day see detailed SpaceX financials so I could understand if I'm right or wrong on that. But having a lot of launch available is a good thing for a company that is going to be launching, in my view, Way more than 96 satellites and probably more than 248. And so we will have, I think, a near open-ended runway for launch services. And so having a lot of rocket capacity is going to just cause value to accrue to AST SpaceMobile, which was my thesis from day one, is that being short launch in a market that will structurally have a lot of launch is going to be a good secular theme to have. I'll end there. Hope everyone has a great week. I'm going to probably just go to the beach tomorrow because we celebrate Columbus Day and Indigenous Peoples' Day at my firm. And so if Trump crashes the market, I will not see it, nor will I care because I know what I own. And the company is executing in really exciting ways. And so I believe that any corrections are going to be, again, shorter in term and less in severity. And that's a very welcome change as far as I'm concerned. Have a great night.
[01:05:27] Speaker A: Bye. 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. We're doing something very, very big, and I think with this technology we can really affect billion lives. AST SpaceMobile is the only company that has proven technology We are using satellite technology to deliver cellular broadband connectivity directly from space to the everyday smartphone. People will just basically turn on their phone and be seamless regardless of where you are. We don't want the user even to know that it's connected by satellite. Our role is to bring this into reality, always in partnership with the MNOs.
[01:06:30] Speaker B: Listen.
[01:06:30] Speaker A: Mmm, waffles.