Kook's Weekly - August 12

[00:00:00] Speaker A: Good evening, everyone. Sorry that we're not meeting on a Sunday. And I was really trying to plan my night to have some more prep time, but then a real estate agent called me and try having a short conversation with a real estate agent. It's like, oh, I got this deal and I already bludgeoned this guy and we can get this house. And I had to tell the guy, I said, look, I'm part of a cult and I have potentially 300 people waiting for me. To talk about a stock. I can't tell you anything more. All I can say is that I have a secret life. And I really don't think this individual understood that I was being actually 100% serious in this moment as we were talking about real estate as, you know, a bona fide buyer of something real. And he's like, you're in a cult. I think he thought I was kidding. And then he kept talking and he was like, oh, I have this other house. And I was like, You don't understand. I really gotta go. And so it's really hard to live a double life. I have a whole new appreciation of what Batman must have gone through. But let's talk business. Let's first start with why I know everyone is really here. I was trying to explain to my wife, I said, well, you know, Anpanman just did a Spaces about this company's earnings. And so Yet people actually want to then join yet another spaces. And I said, this is just real, really proof that people would just like to have kind of a real-life psychiatric patient under observation that they can observe. And I respect that. You know, there's something to be said about everyone is a little bit crazy, but you think it's just you. And then someone like me rolls along And just openly talks about their insanity. And people relate to that because investing is really hard and stocks drive people to absolute madness. And that's what always has drawn me to investing into stocks is I've always viewed it as the great unbeatable challenge. And I don't think AI's going to solve that because I've asked AI how to trade stocks and I think AI kind of sucks at this, which is good news for us. But I'll start with a story I was telling King Tut today is for the past weekend, really, I kept on having this sort of recurring vision of today and with the stock, you know, don't panic, but with the stock crashing 30% on earnings for some reason. I don't know if that was me just having sort of cross, you know, cross neurons from what happened to Redwire, which I think is a total piece of shit, but I've said that publicly and I don't, You know, want to talk about that anymore. But what was interesting is you might be like, well, Cook, oh my God. So you had this vision that the stock was going to go down 30% on earnings. Like why? And what did you do in anticipation of that since you're such a weirdo? Did you totally liquidate your portfolio in front of that? Hell no. So the reason why that dream was actually so important to me is I was cycling through trauma. I was pre— getting pre-trauma. And the realization I had is just thinking, goddammit, whatever. They can send this down 30% again. They can do what they want. But I think that we are as clear to seeing the promised land on this investment and this company as we've ever been. That dream, which seemingly was incorrect, stock looks like it's going to go up a lot, is that I am Diego now. And I am burning the goddamn boats because they can try to drive this stock price down after hours, and they did. But look what's happening here, and we'll tell you what's happening here. But it's important to kind of have these visions and sort of pre-terrify yourself so that you really can know what you own. And I've certainly galvanized my resolve in the past, well, 5 years, but really recently because we've been going overtime in terms of due diligence. And really seeing that these quote unquote delays are really being taken out of context when you think about what they're doing. And that's why I was actually going to Boston late last week. And when you go through Logan, you see all the pictures of Kennedy and those quotes of, you know, we're not doing it because it's easy. We're doing it because it's hard. It took them, you know, not quite a decade, but to put a man on the moon. This stuff takes time. I mean, when you actually think about what ASTS is doing, and they're under the scrutiny of being public, which is really a terrible place to experiment. But that's kind of what SPACs allowed us to see is VC companies prematurely IPOing, which in my view gave us all an incredible opportunity. But we're also seeing, you know, how the sausage is made. But doing something very hard for the first time, is never going to go according to plan. And so as you condition yourself to that, it allows you to weather it. And that's what, to me, because I obviously, as many of you know, for a full-time job, I am a private market investor. And so I hold hands with these founders through the highs and the lows, and the lows are unbelievable. The darkness that founders go through is something you can't really appreciate. Well, I probably can never appreciate it because I've never been a founder, But working with them closely gives me maybe a closer perspective than most people get to the dark places founders go as they're responsible, really not for themselves, because that's usually what they don't necessarily feel is the pressure, but the pressure they have on all those that depend on them and getting to the other side. And so when you think like a founder, it allows you to also go into the darkness and realize that you will also get to the other side. So now let's talk about earnings after I told everyone about the weird dreams I have. When I saw this press release come out, we're all looking for kind of the same thing. It's like, oh my God, FM1. And then you go, oh my God, are they gonna hold guidance on the '20? And then you go, oh my God, are they gonna have revenue guidance cut or held or increased? And the answer is, oh my God, they did everything pretty much. Perfectly, and that's great. And so the stock is going up. And so what they told you this time is that we have fully funded our 45 to 60 satellite campaign. So this is very important. So when I'm building my model, if you look at the DD I posted on that PowerPoint I did, you can see the backbends I did of trying to get to a concept of being fully funded. And so I initially, and this is you know. of a billion dollars of capital ago, maybe more, was really trying to figure out what it would take to get to the 20 satellites. And the reason I was doing this is a full, and I forget what block we even called that now, Block 2. I was really trying to think of how you'd be able to put a bow around Block 2, thinking that the hedge fund guys would then see that as a discrete sort of revenue unit and go, well, once they're fully funded for Block 2, Then that little building block, not to reuse the word block in a different context, but that block starts to become a sum of the parts pillar. And I put a line in the sand on that thinking that that's really where my enterprise value leakage was going to come from, is the journey to get to a fully funded Block 2. Well, they've blown past that. And so now Andy is telling us that we have a fully funded Block 3 or 4. I don't know what they really call it, but what it really is, is fully funded to continuous coverage. And that's actually a very elegant way to define it because everyone can then realize, well, continuous coverage seems like a really viable consumer service, never mind government service. That is a line in the sand toward real revenue in a real company. What comes after that is they said very clearly is really discretionary and strategic. And so for them to say fully funded is not to say they will never raise capital again. That is not true. And that's not a bad thing. And so as someone who thinks like an owner, and I do, I want them to raise capital in the future, but on their terms. And so the key to the disclosure around we are fully funded for '45 to '60 is to say that now They control the ball. They're in control of their destiny. They choose the time and the place where they meet Wall Street. That's taken a long time to get to, but that's a powerful place to be. That means that we already knew they were not going to do secondary market, marketed secondaries really in their social contract to retail investors, but also because they realized that it was best for them, most importantly. Because they are us, they are shareholders. But now you know that no one can bring 'em to their knees barring some real self-inflicted wound. And then they gave us more updates on where they actually are. And so they said they have the microns complete for 8 satellites and they're on target to complete microns for 40 satellites by early 2026. So microns are the critical path item here. It's the way To unitize a satellite without saying satellite. And like many people, you could question, well, why are they not saying we will be on target to complete 40 satellites as opposed to microns for 40 satellites? And I'm sure there's some nuanced interpretations here. My guess is that there are some other critical path items that they want to reserve some flexibility on, such as the bus. And we want them to reserve flexibility on things like the bus. If you are a long-term investor of this company, or even if you're not, let's just say you're a day trader in the company. To be a successful day trader on the company, you need successful long-term investors in the company to believe that there is a, quote, there there. It's all just one big Ponzi scheme. Someone has to believe that it's worth a lot more in the future for you to make any money on any given day. But they're showing that they have visibility on the critical path items, which are the phased arrays. And that's a really nice way for them to disclose the progress. And I mean, the big thing that came out is that they will deploy nationwide intermittent service in the US by the end of 2025. I'm sure everyone caught this and I'm sure Anpanman talked about this a lot on his Spaces, but they said they're gonna be rolling out intermittent service in the US with AT&T. And Verizon. So in the event that no one else has really emphasized that, I will. We do not have a DA with Verizon yet. The company was explicit in adding that they would be rolling out intermittent service in 2025 with AT&T and Verizon. And then in 2026, we'll be rolling out with the UK, Japan, and Canada. The US is about to get lit. And something I found out today is, let me just check, 'cause I DM'd him asking if it's okay if I share this. I asked. Yep. Okay. He says okay. So, and anyone that DMs me with some of their own insights, you can always rest assured that I'll always ask you explicitly if I'm allowed to share that publicly before I ever do. So I kind of operate with journalistic integrity. And so what apparently is happening is that we're about to get a media blitz from AT&T about the service in the next month or two. I think my source said in September. And so, you know, sources can be wrong. I don't know who all these anonymous people are, but some of them have a track record of being a little bit more right. And so, oh, here it is. So AT&T is supposedly going to start really going on a full media blitz mode. In September. So it all matches up actually when you think about that, which is a little nugget of information. And then you think about what Abel said, it would make sense that it— I mean, this is just so beautiful— into the holiday season. So into the back-to-school season and then into Black Friday when people are making decisions, we're going to have AT&T and Verizon talking about their new groundbreaking service that's going to be very different from the pink company. While we're actually going to have something to show in terms of a deliverable consumer product. But the real question we always had is when are we going to have a consumer product? Is that really going to be pushed out to late 2026? Are they going to wait until it's perfect? Ultimately in the terminal value, that doesn't matter. But for those of us who like to have mark-to-market, which I do, I say I'm a long-term investor, but stock goes down, I'm It's frantic. And so I want the stock to go up every single day. And I think that rolling out a consumer service early is certainly going to help, to put it lightly, but that makes it so real. And then I think the wall of money that hits is going to be massive. And that looks like we're going to get the precursor, the real validation from the MNOs in potentially this quarter. With then real service rolling out. Very exciting stuff for them to say this explicitly, because what that also tells you is that they are feeling really good about the deliverability of their production. Because remember, we're not only inventing new technology, but we're inventing scale production of said technology. So it was one thing for the US to make a nuclear weapon, But we had 2 of them. It's hard to make 1,000 of them. And so ASTS has made the first R&D breakthroughs with FM1, FM2, and obviously Block 1. But investors that are looking for scale want to see the ramp to 6 satellites per month. And, you know, if it's 5 or, you know, it doesn't really matter, but they want to see that these things can roll off because they're The narrative, as we see all too often in the comments, is delay, delay, delay. And that's where people, I believe, are missing the forest for the trees because they don't understand that this spools up like a turbo. For anyone that's ever driven a car with a turbo, especially like an earlier model, you hit the pedal and you hear something, but nothing happens. And all of a sudden, whoosh, and you snap your neck off. That's turbo lag. I think that ASTS is like a 1980s Porsche Turbo with a ridiculous amount of turbo lag. And so once we get FM1, FM2, that's sort of like the whooshing sound right before you have a neck injury when they start blasting out 6 per month. The other thing that makes you aware that this is happening is they reaffirm the guidance of $50 to $70 million. I was really braced for them to downgrade that. That's what I was really worried about. I don't think at the end of the day it would matter because again, the inevitability of what this company's going to achieve means that slippage is going to be measured in weeks and months, not years or something like that. And they're keeping guidance, which tells you that we either have a lot of satellites that are about to go up or that Block 1 is about to monetize in a crazy way. And it might be both. And the reason we know it might be both is that Abel said the government is already using the satellites on an intermittent basis. So it also proves that we have a real business case on intermittent service. And so they mentioned IoT, which I think is gonna be a big opportunity. And then all sorts of the governmental use cases that Hennessy outlined. Some people were tweeting about that earlier, I saw, and that's all gonna contribute to the revenue base we have. And then Scott also said that these government programs are really ramping up, and so they're focused on winning these Programs of record demonstrations. And then each program of record, it scaled to $100 million or hundreds of millions of dollars. And he described it that the opportunities coming to us are quote unquote going up and to the right. So think about that. Each government program can lob on, let's just call it quarter of a billion dollars to be friendly. Those are monster additions of revenue. When you think about how a stock like this is gonna be valued, there's someone, let's say someone new to the name looking at this earnings report trying to figure out if it's time to jump in. All of a sudden, if you start scaling just on government deals by a quarter of a billion dollars at a clip, that creates a revenue ramp that's gonna look a lot like Palantir. It's gonna look a lot like an AI company ramp. It's gonna look really Unique. We saw what the market did to how it implicitly values Starlink because growth at scale like this is difficult to find, especially when there are high moat businesses. And here the moat is going to be very wide. The spectrum that Abel said, I mean, I kind of laughed when someone asked the question about The 60 megahertz of the ITU spectrum. And he made some joke. He's like, this would be a big number. No one could afford it. And it's like, yeah, it's true. And what's so interesting is this alchemy that we've talked about of taking the MSS spectrum, which they can buy for a song and reconvert it through their technology and their technology alone into terrestrial use spectrum without Terrestrial, I don't know how you even call it, like lit up the old way, hanging towers. And so the arbitrage they have is, is they're not, I don't know what they're going to do, but are they going to have 60 megahertz of global spectrum that they are able to aggregate all by themselves? Abel seems to indicate that that might be a little bit ambitious. But could you even imagine if they got halfway to it? The spectrum value of what ASTS is potentially able to aggregate when you start to include Legato and then everything else is on the come. I'm just throwing up a random number here, which I'm truly making up, but could it not be $100 billion of spectrum value that they effectively create out of thin air? That's going to be an interesting question for the market to answer. And this is the type of question that I think the market will look to answer. I could see once Morgan Stanley gets over their myopic corrupted ways of refusing to cover this company because Elon will be mad, which is starting to be what I strongly suspect is occurring here of why Goldman, JP Morgan, and Morgan Stanley, all of whom bank Elon, are shockingly absent from the most exciting growth company that The Kook Report has ever talked about. I set the tone. All of a sudden I was at the gym thinking, wait a second, is Elon putting pressure on them to not cover the company? And then I realized that's probably 99% accurate. But let's pretend that they do start covering the company and people start asking the question of, oh wait, so ASTS was the only way that Cerberus and Fortress could monetize spectrum. The only way. 2 of the most badass investors ever Could find a path to market. That's like water giving up going downhill. Water doesn't give up. And so ASCS was able to redirect water to itself, overcoming gravity. And I don't think that's an exaggeration when you think about the hardcore MFers that had been battling over Legato for 20 years. And so then think about the rest of the world. I mean, there ain't no Cerberus in Nigeria. And so like, are we just going to walk away with all of this spectrum that we're going to buy for maybe nothing? You know, with these ITU priority rights now and the government just might give it to us. What a crazy turn of events this investment thesis will take when we go from not just a cash flow ramp story, but a global spectrum aggregation This is like a spectrum treasury company at this point. Like, this is MacroStrategy, not MicroStrategy. Like, they're thinking big. And you want to talk about shit that's scarce? I mean, Bitcoin, you still can make another Bitcoin. You cannot make more capacity for electromagnetic waves. Spectrum is the Bitcoin. And ASTS is laying out a path to have all the Bitcoin, which is really neat. And so they didn't talk about it like that on the earnings call because they don't want to get sued by shareholders for being ridiculous. But that's what I said is, you know, if you want to hear what Scott said, listen to Scott. If you want to hear what Scott said through the lens of an anonymous parody account who has really no repercussion for saying wild shit that he actually believes is true, but is not really held accountable for it late at night, you are in the right place. So what was also wild is that FM1 is going to be delivered not in 2030, as the market seemed to think, but it's going to be ready to ship in August 2025, which means basically right now. And so if you were looking at the pictures they sent, You'll see this big tuna can. The satellite is in it. It's like Zoolander. It's like, oh my God, the satellite is in the computer. It's like, yeah, it's actually literally in the tuna can. And so it was, you can see it was in that big pressure chamber that's called like a TVAC or something. And they can't remember if that's thermo Uh, heat, uh, or is it thermodynamic testing? Or if it's radiation testing, if it's vacuum testing, I can't quite remember, but, but it's something very important. And so then they say they're going to have a mutually determined launch date thereafter. That basically means like, India, WTF? Like, guys, we know you want to launch this other nationally important thing, but you know, we have launch Tinder as well, and we're going to be swiping right on some other hot chicks. Fast. So we'll see if ISRO— ISRO, not to be confused with Israel— um, can get its act together. But they're clearly working on an earlier launch date, and you can see that the satellites are stacked to go. And he also said that they're not conditioned on anything. And so ASTS has done its part. We've started to have finished torpedoes. And we're just waiting on the tube to be ready. And we'll get back to some more thoughts on big tubes filled with explosives that we are putting our precious cargo on top of. But the other thing they said that was interesting going back to business is Satco. And so Satco, as many of you know, is the European JV with Vodafone. And they said, this is really neat, they said they received expressions of interest from network operators in 21 of the 27 EU member states for a sovereign direct device mobile broadband satellite service. So I was trying to think about that. I always thought that this was going to be all these other MNOs in the EU piling on. And if Vodafone was smart, because they were going to be able to leverage all their ground equipment, they were going to avoid competitive constellations sort of being stillborn disasters, but still paper constellations they'd have to compete with. It made a lot of sense. Why they would want to say, hey, come join us. This makes sense because when you think about this type of asset, high fixed cost, it's really— what's the right way to describe it? It's a very high fixed cost asset where any one user is only going to use a very small sliver of capacity of it. So it makes no sense for any one MNO to own it, which is what AT&T has said. And so you really want to get everyone to join, just like Visa, ASML. I mean, these have been the models for me in my head of things that make sense for the industry to come around. And so then they said network operators in 21 states. To me, that means the MNOs, but then they say a sovereign direct-to-device mobile broadband service. I'm getting hung up on the sovereign part. So I'm wondering if there's also State entities that are wanting their equivalent FirstNet and government services in addition to the commercial. But in any respect, it looks like SATCO is becoming a big deal. And I think it's going to present a model of the future for Asian markets and for all I know, potentially Africa, but I really don't understand the African market very well. But it is interesting to see how we're able to go get these incredible market share numbers. As we've talked about in the past, originally the thesis was that, well, we have AT&T locked up, or they have us locked up with exclusivity. And boy, 30% of the US market is certainly better than a kick in the shins. And then we got Verizon and then it was like that meme with the, blanking on his name, but I watched the documentary on him, the WWF guy with his eyeballs exploding. And so, you know, that was like, oh my God, we got Verizon and AT&T. If we're going to be able to go around the world and get 70-plus percent market share, boy, that's going to be a big company. The other thing that is going to allow this company to be very, very big is through, well, big in terms of market cap, or actually no, sorry, big in terms of price per share, which we actually care about, is reaching the terminal share count ASAP. So they also said that they're, quote, progressing through diligence and documentation phase with Exim and the IFC, which I'm not as familiar with IFC, but I am familiar with Exim. And so progressing through diligence and documentation, I hadn't checked, I didn't have time to check the language from last release, but Documentation means you're actually flushing out the docs. And so it really does seem like they're getting somewhere on this. And if memory serves, I mean, we've been at this for over more like a year. And so it would make sense that now we have satellites up in the air, revenues, FCC, all of these things. As Andy said, He's expecting half a billion dollars of capital to come in. And so you take our $1.5 billion of cash we currently have, you add $500 million for that. I'm on Friends, let's just fast forward another 6 quarters. And so let's just say we lop off half a billion dollars for operating expense. So that takes you back to $1.5 billion. Well, that's like 75 satellites worth of capital right there, excluding All of the balance sheet capital we already have, which I just took this off. But the way you calculate this, you know, for those of you playing at home, is you go to their 10-Q. We'll just do this real time. You do, you go to the 10-Q and then you're going to look at the PP&E account net. And so that's $760 million. And then as you go into the footnotes, you will see the breakout of that, which I generally track pretty carefully. And so let me just find it for everyone. I haven't had a chance to update my model yet. Let me just pull it up in my old model. So when you're looking at this, the account you want to look at And I only have it through Q1 in this model, but you look at satellites in orbit, and so that's going to be BW3 plus Block 1, and that's $235 million, of which BW3 is $92 million. But then they also have an account, Bluebird Satellites, which at Q1 was $226 million. And so those are costs already incurred on the balance sheet. So when you look at their financial capabilities, And oh, here it is actually right here. So construction in progress. So at June 30th, they had $525 million of satellite materials, advanced payments, and advanced launch payments. So they already have half a billion dollars in the ground on this constellation. Plus then, you know, the little math I just gave you is the $1.5 billion of cash we have. $500 million of Exim. Let's subtract out 6 quarters of OpEx and some slush funds. That brings you back to $2 billion of satellites. That's a lot. These guys are in a position to crush, and they're telling you they're going to be cash flow breakeven with 20 satellites. That's going to be a really big inflection point for me because I'd be looking at what is my cash flow from operations? Am I able to basically cover my overheads and my people and then really just isolate discretionary CapEx as the plug, but not handling both as drain on my capital? They're going to be very quickly having this very clean stylized sources and uses, which I think people are going to find to be very attractive. And then this slide they came out with, which I really loved, I mean, credit to Scott for really knowing exactly what the people want, is this countdown launch 1 through 13, giving us a checkbox of microns for phased array completed. And so they show they're already completed through 4 launches, and then they show us the satellite ready to ship date. So August, September, November, November. So this is interesting. So this squares toward the ISRO launch. It squares toward potentially a New Glenn 2 launch, which I suspect is where our FM2 is going. And then we have the SpaceX launches in November, which are ready to ship, but then actual launch we've seen on Spaceflight, those are kind of no earlier than December. So we really now have like a packed Q3, Q4 of events because once those are going up, never mind how many satellites we've actually launched, what's important is now we'll be kind of buried into the schedule by then. So people looking out through 2026 are going to see this progression through an S-curve and it's going to— you're going to have a lot of conviction in it. And that means that people are going to put an extreme multiple on it because you're going to see the growth that you already have and have a lot of conviction in the execution capabilities to get the rest of the way there. And so the 2026 story is going to be crazy. One little nuance that I'm— maybe Kasey already talked about it, but one little nuance I saw in the release is they said 2 types of satellites. There's a question about the low band and the mid-band. And they said there's 2 types of satellites. Pause, pause, pause. For commercial. Huh? You know, I had this in my head. I always think of meme ideas and then I forget them. So I was on the treadmill doing some inclined walking because that's apparently good for— it's apparently what Bezos does. That's why I was doing it because it doesn't, it's not hard on your joints. So, you know, be like Bezos as you listen to an ASTS conference call for the 2nd time on 0.75 speed so you can actually understand what Abel says. That is a summary of my life. But I was thinking of that goose meme where the goose is is chasing someone, and in my head it's like few types of satellites for commercial. What about government? What about government? And this goes back to Katzi is right about everything. And so if you've been following Katzi, which everyone does, he's been saying that the satellite FM one FM two that tail which Reportedly is for solar. Doesn't really make sense that it's for solar. There's a lot of evidence to suggest that that is a separate phased array that allows us to do multi-in, multi-out. Pretty cool stuff if you start to get into RF nerddom of the 5 billionth degree, like Katzie, the farmer cat. And so then you go, well, why did they say there's 2 types of satellites for commercial? Why? Why clarify? What about government? And so it almost kind of proves the point that there's FM1, FM2, which we already know is actually for government use, and they were explicit these are part of their government contract for Halo. Then you go, well, that's really cool. What we're seeing with FM1, FM2 are these government satellites that actually support both bands all in one. And for what purpose? I don't really know. I don't really care, but Katzi kind of made me care because of the 5 tweets he did today on it. And so I'm inclined to think it might be important. I think it's probably just technical details that are far surpassing any generalist's need to really understand. But then you go, wow, these guys have a really crazy product roadmap. But also we start to think, wow, maybe all the FUD out there of these satellites being too heavy, maybe other satellites Don't have this tail, don't have this second array because they don't need it because we'll have 2 types of satellites and solve a simple problem for the commercial market in a simple way. But our Blackbird fleet, which is doing all sorts of crazy stuff that we probably don't understand, has this other appendage. And so all of a sudden it started to make sense because then also Abel said, on average, we'll be launching 6 to 8 satellites per launch. I know there are a lot of FUDsters out there eager to fut away with their sad, pathetic, meaningful lives for reasons I can't possibly understand, starting to say that we're going to be launching 3 satellites per launch. I don't know what they were saying, but Abel was very clear, on average, 6 to 8 satellites per launch. That obviously includes New Glenn, but then people were speculating this is also moving to Falcon Heavy. And that makes sense to me. I'm not one to question it, but we also might realize that, and I'm really just making this up on the spot, so I defer to Kasey on this, but that one comment about the 2 types of satellites for commercial, I started to think, why the clarification? And is there not more of a commercial model satellite that we've seen in these ITU filings? So for people that have photographic ASTS memories or have nothing else to do like me, in these ITU schedules, you'll notice that there's the 2 satellites coming up that are at this 520-kilometer altitude, and then we shoot up 18 that go to 690 kilometers, and then we revert back down at some future point to these sun-synchronous orbit satellites that are back down at 520 kilometers. One might wonder whether or not we've got a little bit more of a complex product roadmap. Shall we call it a Model S, a Model 3, a Model X, and a Model Y? Because it is sexy. That would be really funny to piss off Elon. But one must question whether or not we have a lineup of different types of satellites. I'll leave that to Kasey, but interesting little clarification. Probably spent too much time on this. And so then they also talked about quarterly bookings. That's cool with these gateways. That revenue's not recognized yet, but as Scott says very clearly, it's an indicator of future revenue. It's an early guidance system, if you will, of where the puck is gonna be. They also got 2 additional government contracts for a total of 8, as we talked about earlier. That's this program of record concept that Scott was talking about. Just to repeat it, each program can be several hundred million dollars. I was, I guess I was assuming that is per year. I could be wrong on that, but still large amounts of money. And they said that they have multiple programs that they feel good about. There's more opportunities that are bigger. When he said that, he said, well, under this administration, there are more opportunities and they are bigger. I interpreted that to be a Golden Dome reference, but as many people know, I hear what I want to hear. So we'll find out. But no one actually asked about Golden Dome. So big miss by the retail community unless you did submit the question. So if you did email IR about that and they didn't answer it, I'd be kind of curious if you DM me, because I know that that has now been on DEF CON 5 by Hegseth. We had seen some articles last week where the DOD said, you are not allowed to talk about this, period. So it's actually pretty interesting that last quarter they did talk about it. And now that the government has explicitly said, like, shut the fuck up, they didn't talk about it. Right when all indicators suggest that we're in a really good position about it. So almost silence is making me more excited about everything because it means it's more real. than just people blustering. And so I think the US government's dead serious about this. They did spend more this quarter, which I actually like to see. They were getting ahead to make sure they don't have any critical path items. The last thing we want to see here is any delays because of supply chain issues. We had our fun last year when we were reliant on a third-party company for Hall effect thrusters, which were only made by this one company, which was annoying when they couldn't deliver it. We solved that problem. So it's nice to see the company now with the balance sheet to get ahead of these problems or potentially problems and manage the risk. So it's really nice to see good risk management. But then they quote unquote decided to make a $25 million launch payment early to help a relationship with a strategic launch partner. Ooh, they just can't help themselves. It's like they're probably sitting there before these calls and be like, how do we make Space Mob waste a collective 1,000 hours of due diligence on a beautiful August week? And they're all like laughing around the table. We're like, I know, let's say something like purposefully vague and then they'll spend their entire life searching LinkedIn profiles for any hints. Well, you know what, ASTS? You're right. And so we will speculate on this. And so my speculation is that this is going to Blue Origin. I think this is the congratulations on what issue. I think it is because the New Glenn 2 is going to be ready, but its primary cargo, the ESCABE project, will not be. And we are a strategic partner for New— For Blue Origin. And that we were probably doing them a solid because we're gonna be a real marquee, high-volume, regular customer. That is exactly the type of cargo profile that is underwriting Starship. We are underwriting New Glenn, which is very, very important for A, the US government, B, Jeff Bezos, C, us. Well, we're also gonna be spreading a lot of business to SpaceX. So no harm, no foul. It's commodity market launch, that is. And so I think that's what it probably was. I think some people disagree with me, and that's fine because I don't really know the answer, um, that it could have been an early payment to grab some capacity on SpaceX. That's equally exciting, actually, if not more exciting, because I think a lot of us would be really excited to go to Florida in August so that we can really appreciate our homes more. And I know for me, whenever I've been to Florida in August, I've been really excited to realize I don't live there. So it's like one of those things, it makes me really grateful. And so if they do have an early SpaceX launch, which would line up because we do have an STA with SpaceX to do early RF testing, then that would make sense. But I was talking to Katzi about that and he just said, hey, look, that seems like that was probably a big insurance policy. that STA, that is, just so that we are definitely ready to go with SpaceX whenever they have any slots open up, just so we can start grabbing rideshares left and right, which I think is what's gonna happen. Another important thing they did, which I think the shorts would've been all over, is the cost per satellite guidance. So they reaffirmed, and Andy is doing a great job by the way, they reaffirmed that it was gonna be $21 to $23 million per satellite and they held prior guidance. So for anyone that's sort of new to this, the classic short thesis is going to be the unit economics, which implicitly implies that there's thin economics, which there are not here. We could run a truck through our business model, but shorts don't know that because shorts are shorts and you shouldn't be shorting the stock if you had any judgment. So assume you have bad judgment. And that will help you understand why a short would be thinking like this. So you gotta really like suspend your disbelief here. But then they'd be looking for this guidance to go to $23 to $25 million, whatever. And this would typically be their gotcha moment. This is where they start to go, aha, they're gonna run outta cash. Well, no, we're not. But also they'd start to say that, you know, this is just kind of like runaway type stuff. So I'm working with a company right now that's private, and they're trying to get their prototypes done and they really can't even give me a bill of materials. It's crazy. I was just trying to help them with their model and the chairman just wouldn't give it to me. So I was like, all right, well, I'm just going to assume what I think it is, which is probably twice whatever you think. And, you know, losing money on every first unit, that, that's kind of what happens usually with these early companies. And, and that's okay. I told him, I was like, I'm just going to assume it's awful, but you're going to get down the cost curve at some point and the market will look through that and see that. But, and that's normally what happens. And that's what happened with Blue Walker 3. That was 100% over budget. Block 1 was actually shockingly close to the budget. I mean, it was over budget as well, but shockingly close compared to what my more dire expectations were. But for them to hold guidance is really confidence-inspiring because it shows that they're in control. Of their business. I think the subtext is also that shorts would say if the cost spiraled, they would be really ascribing that to launch costs. And that's where this boogeyman came out the other day where everyone's like, oh, ASTS got fat. They discovered carbs and their satellites won't fit on a normal economy plane seat. And then, you know, Bell like whips out a Wegovy pen and he is like, sorry, bitches, we got GLP-1s. And so By holding these launch costs constant, you've done a solid for your company and for investors. They also, and we've kind of talked about this, but they said the first 25 Bluebirds, I think I said 20 earlier, but the first 25 Bluebirds, so that's the 20 new ones plus the 5 we have in the air, are able to generate positive cash flow from operations. That's a really nice thing to have repeated again. And then let's see what else we have. So they canceled the ATM a couple weeks ago. Time flies when you're having fun. But they canceled the last ATM, which is interesting. But then they didn't mention the ATM at all. In fact, what they mentioned was how much cash they had. They mentioned the EXIM, and then they said that the government and commercial inflows will allow them to achieve their strategy. Quote, we believe we are fully funded. Capital strategy will be on commercial and strategic development. I think a lot of us heard them saying that their terminal share count had been reached, and I think what we were hearing them say is we're done with ATMs, which frankly I wasn't expecting, nor do I need to hear. And they're not gonna explicitly say we're not gonna do an ATM 'cause you're never gonna foreclose on an option. But they didn't do it last time. They said, we will, we'll be dropping another ATM, and they did it during the call. Then people panicked and freaked out and ended up making a grave mistake. And I think truly that people would've learned from that. So if they had mentioned another ATM being dropped, I think fool me once, you know, for most people, but they didn't. And so then it got me thinking, wow, they, What do they know? And I think I know what they know. And so they know that they're about to be getting all this government revenue and they're finally so close to commercial startup. As they told you, they're going to have intermittent service in the US this year. This is when I think they start to really pass the hat with the MNOs, and the MNOs are all too happy to be giving them hundreds of millions of dollars upfront in prepayments. I think this is— The stage we're at, and we know that they are insanely dilution sensitive. People might not appreciate that. I know people make jokes and they go, Scott Dalusky and things like that. Hahaha. Guys, it wouldn't be nice if people called you names. You know, he's a person too. But he did, he saved us by raising capital with increasing efficient tactics. But I think what they're telling us is that They're done. They have the money they need. They have views on cash flow. They have views on non-dilutive capital. That's going to really help the stock go wherever it wants to go. Because I think what they're telling you is that they're saying the momentum killers, which they know doing a convert is going to take the wind outta your stock. That's life. I'm really glad they did it. I think what they're telling you is, Into this back half of the year where their launch cadence is going crazy, where their execution is going crazy while the commercial developments are going crazy, while the government contracts are falling, you know, raining like men on the dance floor. I think they're saying to you that they're going to let this thing rip. That's what I heard. That's what I think. And so then we get to, I'm just checking the rest of my notes. We have 6 to 8 satellites per launch on average. That's great. Again, the satellite somehow went on Ozempic. Is that because the tail is omitted? Because the satellites we see with FM1, FM2 are special Mission Impossible satellites versus normal satellites? I'm not totally convinced I'm right on that, to be honest. Um, I think that the future satellites could have tails. I think there's going to be made out of composite, but we'll, we'll see. Katzi will figure it out. And then They have the ISRO launch coming up, 6 launches with multiple launch partners, which we again believe to be ISRO, SpaceX, and New Glenn. They expect to see more government deals, so more really nice events. But then another really interesting thing Scott said, and Annabelle, is they said the satellites can operate or they're tuned to both 3GPP L-band and S-band all in one. These seem like very dynamic satellites. And then he said, look, you might want to model this out as 2 separate constellations, but that's not actually what we're going to do. There's flexibility embedded in their system through what they're calling a mesh. And this just kind of tells you the type of thinker that this team is and the way in which they can articulate these complex concepts quickly. But he said that once we're up with the initial constellation, there's a lot of flexibility to expand the constellation efficiently where it's needed. And this is where I think we're going to start to see earnings power that is crazy because we're going to be able to start adding functionality, which I truthfully don't know if I fully understand, but I know enough to know that there's a pot of gold with some of these concepts that certainly people like Kasey, Tanner, and Kevin are much more fluent with. But when you start to add all of the ability to handle these other spectrum bands, that's where you start to offer incredible data rates. And also, I think a lot of these non-communication use cases. So that's the earnings recap. One thing I did want to share with people, just so So you don't get tricked. And so I wanted to share with you a little factoid. So tomorrow stock looks like it's opening up big. Okay. And so great. Yay, another day. I'm not selling, so whatever. But we have, I'm just pull up their convertible bond because I just want people to know what What's going to happen? And so I'm just going to convert OBCV. Okay, so you have this convertible bond, and right now— oh, that's the wrong convert. Shoot. What's the new one? The 2 and 3/8. Okay, so you have the 2 and 3/8 convert that's outstanding. That's the new one. And so stock recently got hit, and so it shows a theoretical delta Of 83. Well, stock price tomorrow, if it opens up to 52, that's going to be a theoretical delta of 86, all else equal. And so what we need to do—I should have done this earlier—I do do this math on the fly. So we have $575 million of bonds. Each bond converts to 8.75. shares. Uh, and so we take the $575 million bond, uh, dollars of bonds, and each bond is $1,000 of face. And so this converts out to roughly 8 million shares. And so the delta is going up by 3 points, and not everyone's hedged and not everyone's on the same delta, but you you can see that these delta hedgers are going to come in or should come in. Let's just say a maximum are going to come in to sell like a quarter of a million shares, and that's offset then by the company's cap call. And this is actually a very interesting dynamic. And so what's going to happen is these guys on the open come in to readjust their hedge. This is just mechanical hedging. But I've told people in the past, like sometimes when a stock pumps in the morning, Wait, because you haven't seen the real move yet. You're having some price suppression. So I'm not telling anyone to buy the stock, sell the stock. I don't give financial advice. I wish upon no one the fate I've created for myself in terms of the stress I'm under. But hypothetically, if I were Kevin Mack, what I would tell you is, let's say you're a buyer. Well, if you know that when you come in, you have a bunch of people just automatically shorting the stock to hedge their bonds, you know that the stock price is lower than it ought to be. That is a time to buy it. If you are looking to sell your stock, do you sell when you know a bunch of automatrons called convertible bondholders are blindly selling stock just to hedge their bonds, or do you wait until they're out of the way? And so we've seen this in the past, and I'm just looking at the chart from last August where stock opened up and, you know, that first, what was it? Opened up at like $22 or something. And, you know, it wasn't really until an hour and a half until the stock just exploded up to $31. And so I don't like to give trading advice, but this is something Where, and it's not advice to be clear, but this is something where I feel like I just have a unique perspective on convertible bond arbitrage that I just want to share with people. And so the first move at the open I think is generally going to be distorted, A, by shorts trying to knock it down because they're about to get their eyeballs fried, whatever. But the convertible bond guys do need to adjust their hedges, and that's okay. And just Realize that they're giving you an opportunity to either buy some suppressed shares or just let them get out of the way to find the market clearing price. So that's all I have to say about that. But if you have any questions about that dynamic, it's somewhat straightforward. I just thought I'd share it because I've seen this. I've kind of made jokes about it before in tweets being like, hey, you gotta just like stand on some of these big moves. Like, hey, just stand aside for a little bit and just wait because the real move hasn't happened. And I think that tomorrow is another one of those days. And I, you know, I just always want to share any helpful observations that I might have. So thank you very much for joining. It's, I know it's already been an hour. We didn't do our normal update, but I did send out the tweet thread and I think this earnings report really answered a lot of the things I was going to speculate about anyway. And I would just point that I had one tweet out there called Paddling Out Past the Chop, and it was, this actually really informed my thinking a little bit as well today is Reformed Trader, who I really think is quite a special intellectual talent. But he had pointed out this chart that just showed last time we had a financing, just, you know, the corrections, the 7 days of kind of getting slugged and We were really fitting that pattern again, this time with a convertible bond. And the chartists were showing this perfect sort of bullish wedge, or I don't know what the hell they call it. Like stock went down, yet somehow that's positive. I was like, hey, confirmation bias, I'll take it. I'm super long, so it seems good to me. But when you looked at the chart, it was like one of these perfect corrections that made everyone just so sad. But the chart guys were looking at this going, This thing's going to rip. And so my observation from that tweet was just simply, this can be a really hard and trying experience on these corrections, even though they're only like 2 weeks, they seem like forever. But the whole point I was trying to make was like in surfing, there's the concept of kind of just getting crushed when you paddle out past the, I call it the kill zone, but you really want to paddle out before the set waves come. But you want to know that there's going to be set waves. And so even as you're paddling out and you get, you keep on getting pummeled, you know that you got to get out past, past the break to be able to get the good waves. And you have to have that perspective here. You know, I've really come to peace that I feel like I could clearly see the set waves are coming here. And so this type of chop is worth doing the duck dives to, to get out. And that's where I think some of the charts Really helped, at least me. So today I was going crazy loading up on calls. I was, well, I was actually covering calls that I shorted. So covered calls at my wife's request to at some point have an exit plan for the stock. And then I had my dream about the stock being down 30%, and then I somehow translated that today in terms of buying 3,000 contracts back because I don't want to sell any of my stock. So sucks to be my wife, but it is because I started to just really internalize the inevitability of what I thought we were gonna see in this earnings report. And I feel like they gave us exactly what I was looking for of really showing the execution and that chart they came out showing when the microns are completed and the ready-to-ship date. That was the big bang for me. And the repeat of the 6 per month, the confirmation of guidance, like this is a company that is really shifting toward execution mode with so many interesting work streams coming. You know, there was this crazy tweet where it looks like we're working with Lockheed. We have a lot of kind of hints that there's something going on in Huntsville. We have the Legato hearing, which was delayed for some random reason because of Inmarsat, but that stuff's happening. FCC is is very supportive of us. We have spectrum deals coming left, right, and center, like these ITU rights. I won't belabor the point; it's very complicated stuff. I don't know if I—I think I fully understand it, but just shows the company's really playing chess on the long game. So much to be excited about, and the company, in my view, just really delivered. And these corrections. It can either cheat you out of your destiny or give you time to really reflect and galvanize yourself. And I hope a lot of people were able to do the latter in this instance so you can really see where we're headed. And that's why, of course, Ant-Pan Man and all of us are sharing all of our observations and research so that people can be on this journey with us and with Abel and with Scott and with Andy and this whole management team. And I'm just really excited that they've Really were able to communicate clearly to us in this call, the momentum they have. So with that, I'll end it and I'll try to do a Spaces next Sunday. I'm on vacation, which hasn't ever stopped me before. So we'll plan on next Sunday and I'm sure there'll be plenty of other news, even though we just had the earnings call, plenty of other news to talk about at the end of this week. Thanks again. Bye.