Anpanman - Sentiment Check

[00:00:06] Speaker A: This is the AST SpaceMobile Podcast.
[00:00:09] Speaker B: 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 C: Everyone, thanks for joining. What an absolutely brutal time. I'll be the first to say it, it's been rough. The stock for AST has been on a downward spiral from the April launch. And, you know, obviously sentiment has turned pretty negative. And yeah, so are we bottoming? Probably, but could we go further?
[00:00:54] Speaker A: Maybe.
[00:00:55] Speaker C: But, but yeah, I figured I'd fire up a space. I only have actually not too long. I got to go pick up the kids, but I did want to just do a sentiment check. I mean, I think I haven't seen so much negativity in quite some time online, which is justified. I understand, you know, obviously investing, and this is why investing's hard, right? Especially in Single names, you've got to be able to stomach volatility. And for things like high-growth areas with a high level of beta and uncertainty, like the space sector, you're seeing that in spades where it's not just AST that's down 6.7% today. Let's see, Firefly, which I think was up 20% pre-market, is now down 4.4%. Carmen down 6.5%. Intuitive Machines 4.4%. Planet Labs down 6.2%. Rocket Lab down 4.2%. And yeah, so there's a number of space companies that are down. And I think it probably has to do with AST to some extent because the company is a proxy. You know, when the stock is down, the sector does tend to sell off a bit. And I think you've seen other names since the launch kind of come in as well. And so obviously the company has underperformed relative to the rest of the space sector, but it is an indication of sentiment or heavily weighs on sentiment. And so I think even while Rocket Lab did, I think it rallied when the Blue Origin second stage failed. Since rallying to the low 90s, it has come off down to 77. So yeah, there's a bit, there's like some weird factor stuff going on today. For example, semiconductors, which has been a huge winner, optical components within hardware has done really well. So those names are doing well today. Some of the quantum names are up and then looking at nuclear, I mean, those names are down. And so, but in space in particular, space is all down today. So yeah, we've got, we're at kind of an interesting point because I think obviously we've got earnings coming up on Monday and we're going to get an update from the company on production and shipping of the Bluebirds. And so by then, hopefully we'll get a good sense of where we are on that first batch, whether that happens. You know, I think the company was targeting approximately 30 days, so that puts us about A little over a week after earnings, but they will probably give us some insight and guidance into how that production is going and if shipping those 3 satellites is going to happen on time. And then, yeah, we've got launch happening shortly thereafter. And so from what I understand, I think integration into Falcon 9, that will take somewhere around 3 to 4 weeks. And so we could see a launch. As I understand, I think the launch manifest is pointing to something in June. And then you've got another 2 batches of 3 that will likely happen late June or early July and then August. And so, yeah, there's a lot of things that are going on and what could possibly change sentiment. I think the shipment of that batch is going to be important. And the other thing that I mentioned yesterday is The return to operations for Blue Origin New Glenn, which I believe might happen sooner than the market thinks. I think obviously the skeptics are saying several months. I think looking at precedent, you're probably, you know, the, the, what, what people are expecting at the aggressive time, end of the timeline would be somewhere around 70 days, 70, 60 days, but then I don't know. We're getting some hints that perhaps Blue Origin is going to get returned to operations for New Glenn sooner than that. And so, yeah, that's something else to look out for. But yeah, what might the company cover? I think obviously in the quarterly update, it'll be good to hear any progress around production, the cadence of production. I think the company I remember catching up with management at launch and, you know, we're at this point for standing up production that at some point we are going to hockey stick in terms of production. Now, when does that happen? Hopefully near term, but as we all know, production, when trying to create the machine that builds a machine, that takes some time. There's going to be hiccups along the way. But But yeah, it is interesting. I think the narrative, um, I know with the stock price coming down and sentiment being pretty awful, um, there are people always looking for, you know, reasons why the stock price is down. And, um, at least on the hedge fund side, um, you know, the short interest has gone up. I think for people who are perhaps like the lazy kind of, you know, hedge funds that are shorting the stock, The narrative is pretty straightforward, right? Like the company Bluebird 7 was not put into proper orbit. So you had that failure and then production cadence has been delayed and they're going through production hell, similar to what like Tesla went through or any number of companies when you're doing something brand new that hasn't been done before. And then, you know, for the company that in terms of other things that have put pressure or changed the narrative or sentiment, You know, Rakuten, obviously people forget, like we got FCC approval for our full constellation, um, only a few weeks ago. And when that, that was announced, obviously, um, Rakuten, who had been planning to sell half their stake beginning in January, um, you know, they'd come off the board and, um, we didn't know exactly how much they would sell or when they'd sell, but then they implemented their 10b5-1 plan and, um, indicated that they would sell half of their holdings, of which they are probably two-thirds of the way through that. And to be quite honest, like what's remaining is not that much. And so that kind of hit sentiment. And then of course, you know, the Globalstar acquisition by Amazon, I think that's been an overhang as well. And, you know, so for someone who is from the outside looking in, then you've got this confluence of all these things, then you know, if you were a hedge fund and, and I guess, you know, contemplating shorting, now's probably not a bad time to be short. But as we learned in the past, um, when you have these ingredients together of people who are tourists who don't really know the sector, and we've seen this actually, um, for some of our friends in Space Mob who are on the institutional side, um, it definitely sounds like there's a ton more activity on short sellers, um, where For example, the latest, or not the latest, but the old rumor that our satellites won't fit into a SpaceX fairing, like that's been going around, which is kind of funny, or not kind of funny. It's patently absurd, but that's been peddled. And then of course you've got, you know, looking at some of these expert networks, there's been a flurry of activity of institutional investors who are conducting due diligence and asking outside experts or people who work in the industry about the company, which typically you'll see that when a company is doing really well and people are perhaps contemplating going long, or if things are going, you know, the stock price is not doing well and perhaps shorts are trying to gather more ammunition to press their position. So But in terms of setup, like, I think with the low implied volatility, the all-time high short interest and sentiment being really low, I think we got the ingredients for what should be a pretty spectacular rally, I think, over the coming weeks and this summer, especially with all these launches lined up. Obviously, like, you know, the company has to get satellites up and, you know, will they get to an approximate 45 satellites in orbit. That is an aggressive timeline or aggressive target, I think. And we've talked about this in the past where it is a reach goal. And if they can get these 9 satellites off on Falcon 9 and then resume operations on Blue Origin New Glenn with the ability to launch 6 satellites at a time, and obviously we've already got 6 orbiting the Earth right now, then you can see a path to get to 45 approximately. But You know, if they get to 40 or if they get to 35 or high 30s, is that going to make a big difference? In my opinion, I don't think it will, right? Because I think ultimately what's going to matter the most at the end of the year is the exit velocity of production cadence, right? And so if they're getting to the point where they're confidently producing 6 satellites a month by, call it June, July, August, and we're able to do that consistently and they actually Fingers crossed they actually raise the number of satellites they were able to produce on a monthly basis, then that's what's really going to matter, right? Because ultimately, if you're able to produce 6 satellites a month, that's a— that in terms of building out the constellation, that's the number you're really focused on, right? So 6 times 12, that's obviously, that's 72.
[00:10:49] Speaker A: Right.
[00:10:49] Speaker C: And we need, let's see here, you know, we need, we need 45 to 60 for decent coverage. And then, you know, beyond that, then you get into improving performance, right? And beyond that, if you're able to get to say, let's see here, if we can bump up from 6 to, from 6 to 8 satellites per month, then you're, you're building On an annualized basis, 96, right? And then, you know, Scott has talked about the possibility or tooling and getting additional floor space to get up to, call it 10 satellites a month, then that's 120 a year, right? And so the key thing here is getting to your production cadence that, you know, once you're able to consistently produce satellites, test them and get them out the door and obviously get them launched, That's what's going to be the most important thing. And I think for the company to reiterate approximately 45, they still see that stretch goal as a possibility, even with the setback of Bluebird 7 not getting into orbit and Blue Origin obviously on hold for now until the FAA concludes its investigation. But from what I've heard is I think Blue Origin has a very good sense of what the problem, the failure was for the Stage 2 New Glenn. And so, um, yeah, I think, I think they may return to operation sooner than the market, uh, is pricing in. But, um, but yeah, anyway, sentiment sucks. It is what it is. Um, I hope, uh, and no one wants to hear this of course, but key thing is during times like this, like, it's a, it's a stark reminder not to be overleveraged. uh, not to be over your skis because stuff like this can happen, right? Like drawdowns where sentiment's bad and, and you have, um, a stock underperforming. And this is where, like, from a sentiment and— or from a mental standpoint, it can really screw with you, right? Because obviously the markets themselves, whether it's S&P, Dow, uh, Russell, they're all up today. NASDAQ. And you've got a number of different sectors that have continued to perform even in this uncertainty with, um, I ran. So for example, I was looking at SanDisk, Micron, Western Digital, and Seagate and all these other storage and memory companies, which you couldn't pay someone to buy these companies a few years ago. But with the advent of the rush for AI and building out data centers, they've done extremely well. And so yeah, this is what happens in the market. Like some sectors become really hot, some sectors become cold. Space overall, I would say, has taken a pretty decent breather after having a pretty high, a pretty big rally in January on the excitement around defense spending. And of course the SpaceX IPO, which by the way, like that's still happening in the next few weeks. And so it's not as if interest has gone away from the sector, but I think some of the momentum and fast money has left the sector and has dribbled into some of these other areas. I mean, even Intel of all companies where you couldn't pay someone to buy Intel, but given the Trump administration's essential government backing and then of course interest from Apple and others to build their chipset fabs domestically, Intel has rallied tremendously. And so things can change on a dime. And I would just say that You know, for those people who are upset and, you know, are calling for blood and like, oh, management, they should be communicating. Well, we've got earnings on Monday. So that's, and I, you know, there were some folks saying that management should communicate more. Well, we did get a PR right after the failure of Bluebird 7 getting put into orbit. And what I think that was like April 20th. And then we got FCC approval and they put out a PR on April 20th. But now the company's in a quiet period, right? And so they are, they can't say anything until Monday unless of course there's like some material news, which there might be the next few days. But we'll find out soon enough. And what I'm looking forward to is update on government contracts. You know, I think we're now in the sweet spot of additional work around Golden Dome. Will there be an update around the $1.1 billion of contracted revenue? uh, backlog that we have. Um, my guess is there, there might be, but who knows. Um, and then, you know, do we get any updates around M&O contracts? Um, you know, definitive agreements. Um, yeah, there's a whole host of things to, to be updated on. But, uh, one other thing I, I did want to mention is that, uh, for launch, there, there is a— there is, and I've talked about this I think it was yesterday, but there is a wrinkle around SpaceX where, because of the way that our multi-launch agreement is structured, we actually don't have an ability to disclose that we are flying on SpaceX until closer to launch. And so even if you look at like the Block 1 launch and, you know, the announcement of when that was going to happen, and then of course the successful launch of the Block 1 Bluebirds, we don't actually, I mean, in the graphics we show SpaceX, but we actually don't refer to SpaceX. And I've looked at other companies and, um, some follow similar, a similar, um, you know, they, they have these similar restrictions where they may not be able to talk about SpaceX or they, if it's a rideshare, you can talk about SpaceX being a rideshare or Viasat, which I think is a, is a, you know, old school SpaceX customer. They can actually talk specifically about being on a Falcon 9 Heavy. But, um, yeah, I mean, I think, um, to some of the folks out there who are worried that we don't have SpaceX launches. We have them. They're on the manifest and we are on the schedule. You can go see it on any number of sites that follow launch. And so we have 2, I believe, that are already on the schedule and a 3rd one will probably pop up soon. But yeah, we're only, you know, yes, it sucks. It's May 5th, but Uh, we're only a few days away from the May earnings update, and then from that point on, only a few days away from the first batch shipment. Um, unless, you know, that changes, unless it gets pulled forward or unless it, you know, gets delayed a little bit. Um, either wouldn't surprise me, but, um, yeah, that's kind of where we are. So anyhow, um, I think it's important for people to, um, take a deep breath. This stuff happens. These like highly volatile names, um, you can have multiple drawdowns like this. I think specifically for AST, um, I think we've had— and Reformed Trader kind of highlighted this before— but we've had multiple 40 to 50% drawdowns, which, um, if you're a trader, um, then it can be good, right? Or if you trade things around, it can be good. Or if you're a long-term holder, you kind of just ride through it, right? Um, and, and it's just, it's a It's a feature, it's not a bug. It's just part of investing. And I think this is the part where when things are going well and stock prices are going up and your portfolio's at all-time highs, which mine was in January, which was wonderful, but now I'm back down to call it flat for the year or slightly down. That's okay. Like I've been through this multiple times and I'm prepared for it. And so in my mind, when thinking about putting things in context, where the company is relative to where it was the year before or the year prior, we have an FCC approval for full constellation. We are now producing Block 2 satellites that are about to be shipped. We're about to launch, go into the full launch campaign, which I've said this multiple times, but it's been delayed, of course. for various reasons. But, you know, some of the issues that we've come across specifically like stacking, that's been solved. And so yeah, it's an exciting time and we've got, you know, if you are having a tough time mentally, I think it's good to go back to, let me see, my, the Catalyst tracker that I update periodically and just kind of go through that and see where we've come and the milestones that we've hit and then things that are coming up, right? So You know, the next 3 batches of Bluebirds, that's basically BB-8 through 10, 11 through 13, 14 through 16. Those are going to be, you know, launched within June, July, August timeframe. And then after that, I think we'll probably see our first fully loaded Blue Origin New Glenn launch. And then you've got, of course, in this quarter, probably some updates around Golden Dome. But yeah, there's quite a few things here, which it's pinned on my profile for those that know or haven't seen it before, actually. You can go through this. But anyway, yeah, it's a crummy time. Don't get, you know, there's no two ways about it, not to sugarcoat anything, but for those that have, you know, invested in the company for multiple years, This is just part of the process. And I've said in my career, the biggest wins that I've ever had are the ones that have tested my resolve the most, and that always has and continues to hold true. But I guess on a separate note, something interesting, there is an article that's coming out on Bloomberg. I haven't read it. They independently went to various members of Space Mob and interviewed us, and I think it'll be an interesting article. Ultimately, I'm not sure how it's going to paint all this if we're like whack jobs or crazy, but it is truly, as all of you know, because you've been part of it, it's been a very unique story and community. But I think that article is coming out this Friday, May 8th, so keep an eye out for it. The reason why I know is that the journalist who interviewed various people reached out to me to make sure from a fact-check perspective that Some of the things that they they're going to put in the article, which again I didn't read the whole thing. I haven't seen the article, but they gave me a few points to make sure that what they're putting in is accurate. And so so that'll be interesting. Of course, I would have rather this article come out you know when stock was at 100 or 120 versus 64. But then again, it goes back to that old meme. Like once there's more awareness out there and people Read about AST SpaceMobile and learn about this community. You know, it's like that meme where people are kicking themselves that they didn't buy it when the stock's at $130, but then of course when it goes to like $63, no one wants to touch it and they're like, aha, I told you so. And then of course when the stock goes to $200 or $300, they have regret again. And so perhaps that dynamic is going to play out. itself out once again, which, uh, you know, it, it happens every time with AST. Like, we have this— we go into this, like, um, big drawdown, people feel awful, sentiment's bad, you know, folks are calling for, uh, the heads of management, and then lo and behold, um, you know, some positive catalysts come out and the company executes, and then we reach an all-time high once again, um, and, you know, breach our previous all-time high. But Anyway, yeah, I just wanted to just do a quick space and just say that sentiment, it sucks and everybody's feeling bad, but this is part of investing that you take the good with the bad. And it sucks to see, you know, SanDisk hitting all-time highs. I should have bought that name instead of this name. But yeah, that's investing. It's like the old grocery store analogy where you try, you see a line that's moving faster and you switch lines and then the line that you just left is all of a sudden moving way faster. And so, you know, it's important to know what you own, right? And so this is my primary investment. I have the highest confidence in it and I think it has, you know, AST SpaceMobile has a tremendous amount of upside. And so this is where I made my bed. So anyway, I've got to go pick up the kids from school. So hope everyone is doing okay. And Yeah, on days like this, sometimes it's good to go to go out to the yard, do your yard work that you've been putting off for a long time. Go hang out with your kids. Go touch grass. Go watch a movie or something. But yeah, and make sure that you're not on margin because that's being on margin overextending yourself is the quickest way to financial ruin. So with that, I'll end the space and we'll catch up again soon. Thanks everyone.
[00:24:06] Speaker A: Thanks for listening to the. AST SpaceMobile Podcast. If you enjoyed this episode and you'd like to help support the podcast, please share it with others, post about it on social media, or leave a rating and review. To catch all the latest news about AST SpaceMobile, make sure to subscribe. Thanks again, and I'll see you next time.
[00:24:29] Speaker B: We're doing something very, very big, and I think with this technology we can really AST SpaceMobile is the only company that has proven 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 industry.
[00:25:06] Speaker A: Listen. Mmm, waffles.