The Setup Before AST SpaceMobile's Next Big Rerating

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[00:00:59] Speaker C: Hey everyone, good morning. It's a windy and rainy Saturday— or Sunday morning here in New York. Hope everyone is dry wherever you are. But, um, yeah, I just wanted to fire up a space and catch up on ASD Space Mobile. Uh, I tweeted earlier that I was going to bake a cake and, uh, listed a few ingredients, and so I wanted to talk about some of that. But yeah, sentiment has been at an all-time low, probably not as low as back when we were at $2, but sentiment is pretty rough because I think folks out there, at least if you gauge Reddit and X as a sentiment indicator, people are at their wit's end for, or at least a pretty decent number of you. But yeah, I just wanted to touch base and talk about a few of the catalysts that are coming up and the ingredients that are going into what I think are going to propel us to new all-time highs. But yeah, I think it's important for anybody to just take a step back and think through what you're underwriting here. And of course, things take longer than you expect in space and there's going to be setbacks, but that's just part and parcel of being invested in companies that are doing important things that are very difficult. Right. And so a few things I'd point out is that, and I wrote about this earlier this week, implied volatility, so the premium that you pay for options, we pretty much struck or matched our near-time— we got close to our near all-time low, which was back in 2023. And so implied volatility hit around, I think it was 70%, which is very low for AST. Someone had pointed out in a reply that, hey, implied volatility of 70% is actually pretty high. Yeah. If you're looking at an S&P blue-chip company, some of those may have an implied volatility of 15%, 20%, but here we're talking about a high-risk, high-growth company. And so we've now reached a near all-time low. And someone did ask why that's important. It just shows that sentiment is washed out, right? Where if implied volatility is high, then people are expecting a big move either up or down in the stock, whereas now that implied volatility is low, the expectations for some big event or a big move in the stock is just not there. So the expectations are down, and as a result, people are complacent. So you take that coupled with short interest being at an all-time high. I think Bloomberg reported it at $65 million. Real-time short interest from Market, which is a data provider, is more like, I think it was around $94 million. The difference between the two is that market actually looks at what's being requested on stock loan versus actual short shares that are out. But they pretty much move in lockstep. And so depending on which number you use, that figure is now at an all-time high. And of course, you have to take out shorts from convertible arbitrageurs who are hedged against their bonds, but Putting that aside, short interest is at an all-time high. So we have low implied volatility, short interest is at its all-time high, and then going back to what I was saying before, which is sentiment is now near an all-time low. Probably not comparable to where it was at $2, but it is pretty bad. I've seen a number of conviction long-term holders with really crumble recently about having the lack of communication, which I pointed out in a space previously. The company has been highly communicative in July and August, and then September it slowed down quite a bit. But just a reminder, with the advent of social media and then the empowerment of retail investors, I think we've gotten used to companies being very communicative, whereas in the past, call it 15 years ago, you would get a quarterly update and you might get a PR from some material news, but aside from that, you wouldn't get these micro updates from companies. Now, there are investor conferences where institutions would go and sometimes you might get some updates there, but typically if you were an investor of importance, maybe you have a good relationship with the company and you have a big position, you would call the company, call executives or IR, and get updates from time to time. But that's kind of how typically things played out, right? And so nowadays, with the advent of social media and of course information that's really available, people expect more updates. But this is not the norm, right? And so it's just a reminder that It's good that the company communicates and does release things from time to time, but it's not something that people should expect consistently, right? Because it really depends. Like, if there's news to communicate, they will. And then if there isn't, then there's nothing new to say, right? And then of course, it's part of the culture, right? Where I think this company is engineering-driven and they typically will highlight things when they are ready or when it makes sense versus speculating or putting things out that may not be fully baked. And so I think that's something to keep in mind. Over the past few weeks, there's been people who have pushed back on that notion and people have said, well, management's lying, or they claimed they were going to do this and then it didn't come to fruition. And so they must be lying or they're fraudulent. Things are hard. You may think that you can build satellites to a certain production cadence, or you may try to have these goals and you just don't, at the time you think they're true, and that is your goal, and you may not get there and things get delayed, and that's life. I was going back and looking at Tesla Production Hell and That lasted for an entire year. It lasted for over 12 months. And it's not as if the company was trying to deceive people, but that was their true aim. They were trying to accomplish milestones and then it took longer than expected. They came up across difficult problems and it took longer to solve. And so as with anything that's difficult to do, which is putting up a a brand new broadband constellation in a market that you created, that's going to take time. And so those 3 things, implied volatility near all-time lows, short interest all-time high, and sentiment near all-time lows, that makes for an interesting setup because now you've got everything that's washed out and people are concerned about Bluebird 11 deployment, batch 3 shipment, batch 4 shipment, launch, a whole host of things, but what if those things get solved in the near term? Meaning over the weekend, come Monday, we hear that Batch 3 has been shipped and is prepped for launch. Bluebird 11 may be deployed. If all those things come to fruition, Batch 4 is close to being shipped as well. Then what does that do to the stock price? That causes a change in expectations and rerating. And so that's what I was saying earlier is that we've got these ingredients where the expectations are so low and nothing is priced in at this point. Well, what happens if those things come to fruition? And so that's the important thing, I think. It's been a rough time for the space sector. And I think some people try to draw some equivalence because they look at, let's say, Rocket Lab or other stock prices and they're like, well, those stock prices have rebounded more, and so we need to be there too. And it's like, well, these are separate companies. Yes, they do trade together. There's some level of sector beta, but at the same time, each company is doing their own thing. And so I think people put additional pressure, psychological pressure on themselves. It's always, it's like the grocery analogy where you're in one grocery line and the other line's moving faster and like you have this, you know, this sense of need to go to the other line because it's moving faster. And as soon as you do that, like the line that you left moves faster. And so people feel like they've, I don't know, like psychologically, and look, I can feel this from time to time too, but I think people feel psychologically that perhaps they've they've squandered something or they've missed something. And there's all these people who are like, oh, we need to flip Rocket Lab, or we need to outperform all these other stocks. And it's like, no, these are all independent companies. And yes, they do trade together to a degree, but yeah, recently we've had some delays, but the opportunity set of what we're looking at to me is much higher. And so you just have to be patient. I do remember back in 2023 and 2024, as the stock continued to grind lower, I had a bunch of regret. I remember in early 2024 just thinking, my God, I am invested in this company. I've lost so much money, at least on paper, and yet I could have just held S&P or I could have held some other companies at the time that had rebounded and were doing well. That was pretty painful from a psychological standpoint. It's like if I had made different decisions, I would be in a much better place. But yeah, then I was proven right as well as other holders. We held The company, it took longer than expected, but they raised painful financing. It bridged them from January. Although they had Vodafone, AT&T, and Google invest, the stock price underperformed. It wasn't until May when they signed the contract, the definitive commercial agreement with AT&T at the end of May, and then just what, a week or two later, Verizon came in with a strategic investment and had joined, and there was no looking back at that point. So we went from $2 to $39 in a matter of 2 months. So that is the level of violent rerating that you can experience. I think it's important to understand that the timeline that the company executes against, this is a difficult problem that they're solving. And so some of these things do take time. But if you look at the breadcrumbs around and just see, for example, the US government's enthusiasm for AST, the fact that we are going to hear probably more details about Golden Dome in the near future. And then we've got 800 MHz spectrum selection from GRAIN coming up by early November, although my guess is we'll probably hear much sooner than that. And for those that forget, that's 700 7 by 7 hertz, 14 megahertz in total, 7 megahertz by 7 megahertz uplink and downlink, 14 total nationwide coverage, that's going to be a huge boost for the company. My guess is that that goes into this other catalyst, which is the US telco JV, which I think that's going to be inked probably before the end of this year. It might take a bit longer, but if I had to guess, given all the activity in the sector and the threats that Starlink has made, I think that comes before the end of the year. And yeah, we'll learn how that JV is working with AST, which I believe the company is in active discussions. Obviously, they have a great relationship with AT&T. We saw ads running on Instagram and Facebook recently, but also with Verizon and with T-Mobile. Discussions are going on there. One of the things that I've talked about is when we do announce a definitive commercial agreement with T-Mobile, what does the stock do? So if Verizon took the stock from I think post-AT&T announcement, it was at $5 and it basically ran it up to $39. Obviously it's not going to do that this time, but what does T-Mobile do? If you have 100% of the US market, does that double the stock price? Does it triple the stock price? How long does that take? Unclear. But you can also add onto that Deutsche Telekom, which is currently testing, that's been disclosed with AST. And so once Deutsche Telekom is added to working with AST, that's the big 4 in Europe. I mean, you pretty much have locked up that market. So these are some of the things that when you have folks who are just watching the day-to-day chop in the stock price, they forget some of these things. Or of course, they're focused on production and launch, which clearly are very critical, but they're going to take time. They're going to take time. And so you don't want to be in a situation where, you know, you send up satellites and they don't work. And so, you know, there's been some speculation as to maybe BB-11 is having some difficulties in deployment, but according to Katzi and Toad and a few others who have been following the satellite closely, it does look like it has successfully deployed. So we may hear in the next few days about that. And I will note that these are all, it's not as if you can go to your local electronics store and you buy a satellite and then it comes with the instructions and then you go launch it and it works right off the shelf. This whole program, which AST is now, let's see, so we're on the 5th or 6th design of spacecraft. These things take time, right? And there's learnings that you get from them and you optimize the process. And so BB-11, While there has been some speculation here and there, it could also just be part of the process. Like, we're going to raise the satellite, we're going to use the thrusters, we're going to see if there's other factors or variables to consider when we deploy these satellites. Because you do, just like with SpaceX, every time that they launch Starship or Falcon 9 at the time, you get learnings from it, even if the mission is unsuccessful. But I will note that if there was a situation where Bluebird 11 did indeed have problems and is unable to be commercially viable, that's not an extinction-level situation. It's not even material to the company. If you think back to Bluebird— Sorry, if you think back to BlueWalker 3, If that satellite had failed, then that could have been almost an extinction-level type of event for the company, because the company didn't have a ton in terms of capital, resources, and time. And that was back in 2022, when obviously the rate environment was awful and the outlook for growth companies was really bad. Then fast forward to Block 1, Bluebirds 1 through 5, and If one had been lost, that would've been bad, but survivable. But now we're in this part of the deployment cycle where we are working on 48 satellites, of which I believe maybe there's about 17 to 20 that are kind of in parallel process at later stages of production. And so if you do lose one satellite, which we actually have, so if you guys, I mean, it seems like long, long ago, but it was only a few months ago that we lost Bluebird 7. And that was because obviously Blue Origin, the second stage on New Glenn didn't refire. And so that was put into an elliptical orbit, which then ultimately we had to deorbit the satellite. So we have lost satellites in the past. And so space, as we all know, is difficult. And so you are going to have some setbacks. So even if you did lose BB-11, you would be fine, because you're making so many and the plans are to launch in the near term, hopefully get to 45 deployed up in space. Losing one is not something that's going to be a big negative, which I guess there's some bears that are trying to make it a make-or-break type of event for the company. It's not. We lost Bluebird 7. It was no big deal. The stock recovered to all-time highs or exceeded all-time highs even after we lost Bluebird 7. So yeah, just keep that in mind. Things can and do happen. And the company, when going through deployment of satellites, it's a process. So I think for this last batch, they they unfolded too very quickly, and so that was part of their plan. And then this BB11, there is some plan there. Whether parts of it were planned or maybe there were some unforeseen things and they're working on it, good engineers face problems and they go through a process and they solve them. That's any good engineering company. So yeah, so I think As I was saying before, you've got a number of big catalysts, which I think people, with the sentiment being so low, people kind of forget. But I do these posts to remind them that these things are all on the horizon. So as I mentioned before, T-Mobile, Deutsche Telekom, the US telco JV, as I said before, is probably going to get announced before the end of the year is my guess. JLEO, that joint venture, while it is in discussions, has not been formalized yet, but that's something they can just drop any day. And then interestingly, over the weekend, we did get some updates. It looks like they are now stacking the new tower over at Blue Origin. And so there has been some rumblings that the year-end target may actually come to fruition. And so I think when Blue Origin was aiming for launch by year-end, my guess, with anything around space, I would've added maybe 1 or 2 more months on top of that just to be safe. But it does seem like perhaps they are actually gonna meet that. And there are some rumblings, for example, that Never Tell Me the Odds might get back to the pad and have a static fire in December. So actually early, the first half of December. So we'll see. But these are all things that I think people kind of forget. But when I did post earlier this week, there was someone who was upset and said, well, people have lost money over the last few months, which, yeah, I've lost money. So the stock has come down from an all-time high in May. It's been painful, but But yeah, I've been patient. And sometimes people will ask me, why aren't you posting about it? It's like, well, there's nothing new to post. There's no new updates. I'm just waiting patiently. And one of these people had mentioned that, let's see, many accounts have been crushed over the last few months. And I kind of responded that our stock has been range-bound. Right between I think 55 and 70. Let me just take a look here. Just want to confirm how far that goes. Just pulling up my Bloomberg here.
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[00:24:01] Speaker C: But yeah, we've since, let's see, basically since the end of June, we've been range-bound, right? And I guess we've been coiling tighter to around $60, but there's been a few people who are upset that they've lost money. And then when I asked, I was like, well, the stock has been range-bound between $55 and $70. I asked, are you day trading it? Because sometimes it's tough to day trade. If you're on the wrong— when you're zigging where you're supposed to zag or zagging when you're supposed to zig, you can lose money that way too. And then this person responded, you don't understand that people buy options. The fact isn't accepted in your mind. And then I responded kind of in a flip way that, well, that explains everything. And then there was someone else who got upset who said that people do buy options and they're facing massive losses from the last few months. Even if they bought at 80 after the huge dip from 130, their calls are down huge. And so I've explained this in Spaces every time, but I just want to reiterate and I guess talk about how I think about options. But yeah, options can be a great tool if you use them in the right way and you're really good at it. But if you're not, options overall are a losing game. That's if you're long options. So long calls or long puts, over time, you're going to be a loser. It's just like going to the casino. And the thing that is difficult with options is if you're in a high-beta stock and also if the macro is uncertain, then you can be absolutely right on your call in terms of, I think these catalysts are going to happen in this time period, But it's not just getting the catalyst right. You have to understand, you have to get the stock price right. And a lot of factors can play into that. You can get all these things right, but the stock price will be far from where you thought it would be and you're going to lose. And so here, over the last, let's see, 1, 2, 3, 4, 5 months, we are in an interest rate environment where we're hitting yields that we haven't seen since, what, 2007, I think? And then on top of that, you've got the Iran war, oil continues to make new highs, and yet people are playing options in a sizable way against a highly volatile stock with a lot of uncertainty. Where, I mean, with AST, it's notorious for the company who's executing on something difficult where timelines get stretched. And so those are not good ingredients for options. And so for me, I have played options in AST and I will do things just to, I guess, make things interesting or to have fun. Sometimes I will play options, but it's never a material part of my portfolio. At most, if I ever play options, it'll be 1%, 2%, 3%. of my capital. And I keep telling people this too, when I size options, I size them to zero. I just automatically, if I'm long calls or if I'm long puts, I automatically assume right after I buy them that they will go to zero. And so from a mental standpoint, I'm comfortable in losing whatever capital I've committed. And so when you do that, if you have this mentality of, if I buy this option, this call option, say, that maybe has, I don't know, 3, 4, or 5 months of maturity on it or time, then I'm going to do something where if this goes to zero, I'm going to be perfectly fine with it. And that's how I, from a mental framework, that's how I trade options. As soon as I buy it, I assume it's going to go to zero. And so if you assume something is going to go to zero, are you going to size it to 20% of your portfolio? Are you going to size it to 50%? Or are you going to size it to like 1% or 2% or 3%? And so I think unfortunately there's been a lot of people these past few months, I've talked with them and even prior to their, unfortunately, the bad outcomes that they experienced, it always talk to them about reducing their exposure in options, but options are like a drug. When you have that period of time where maybe you dabble in it a little bit and then you have a big win and you're like, oh, I can do this. And then you, especially in bullish markets, when everything's going up, everyone feels like a genius. But there are those times when something's going against you and you buy a little more and it goes against you and buy a little more. And then And then lo and behold, that situation turns positive and you make everything back and then some, and then people feel really confident. And then they continue to overextend themselves in options. And so there's been a few people who, after our last run in May, continued to add options on the way down, and then unfortunately blew up their portfolios. And so what I mean by that is they had 80%, 90%, 100% exposure in options, which is tough, right? Because I think, as I said before, you might actually be right on what catalysts you think are going to unfold, but the macro may change. There's a whole host of reasons why the stock price may not get there, and you're pretty much locked in. And on top of that, you have this time pressure that the stock price has to perform within a given time. And that's where I've seen any number of accounts on X, people get absolutely ripped shit and livid against management. They're like, oh, you guys didn't deliver on this certain timeframe, or some of these accounts who responded to me who were upset because they lost money on options. Well, the company's not managing towards your options. They're managing towards their long-term future, right? And so, for example, if in testing they find something wrong with Bluebird, you know, 14 or 15, and they have to go back and fix it, and they're like, oh, you know what, we're not only going to go back and fix it, we're going to go and make sure that the other 2 Bluebirds that we're about to ship are going to be safe, and then all the— down the production line, we're going to fix those things too. that's something that you want a management team to do. You want them to be responsible. You don't want them to just get things out the door for the sake of it. However, if you're invested in options and you have a very short fuse and timeframe, these are the people who are like, oh my God, do they just need to ship it and they need to launch immediately? And so yeah, are you managing for the short term because you need a pop in the stock or are you managing the long term that this company has a tremendous amount of opportunity ahead of it. It's got these amazing MNO partners who are relying on it to be a strategic counter to Starlink, and so they need to get it right. So are you going to rush things and get some things wrong or terribly wrong, or are you going to take your time and get it right the first time? Because as we know in space, you have to get it right every time and the consequences can be pretty material. And so with this company, as we've talked about in the past, they are ones to measure twice and cut once. They're not going to just throw things out there for the sake of it. But yeah, I think it's important to make sure that if you are invested in a high-beta stock that has the propensity for delays, Because things are hard and there's some things that are in their control and there are some things that are out of control. So for example, with Falcon 9, with the astronaut crewed missions, which moved around from September now back to October 1st, which who knows, that could get delayed again. That's going to change the manifest of when you can launch because there's going to be a blocked out time before and after when people can send cargo up. And so there's a number of things that are out of your control, right? And even going back to government programs like Golden Dome, sending out awards and when or if you can disclose those, that may take time, right? Or the SDA that we saw filed by the Space Development Agency on behalf of Space Force and Department of War asking for an extension on 900 MHz testing with AST SpaceMobile, maybe testing takes a bit longer. And so these are all things, there's so many variables that are hard to gauge. And so this is why I think if you have conviction and you own AST SpaceMobile, a vast majority, if not 100% of your position should just be in regular common equity. So not leveraged ETFs like ASTX, not options. I saw another account the other day who was lamenting that their ASTX position was near its all-time low and they were upset with management. That's on you. If you have a lot of exposure on ASTX, we've talked about that product where it's dangerous. All leveraged products, yes, in a period of time when a stock is moving in one direction, unilaterally like up, if you're long the levered ETF, or if it's going down in one direction and you're long the short ETF, then the compounding can make that a big winner. But in periods of time where you have chop, where it's kind of trading sideways and you have reasonable percentage moves up and down, that product will eventually go to zero or it's going to lose value over time. And so don't put unneeded pressure and mental stress on yourself by owning these things, whether it's leveraged ETF or options. Yes, you can play around with a few percentage from time to time, but it should never be a core holding because that's when people lose it. That's putting additional mental pressure on yourself. And this is when people They tweet out all this negativity towards management. It's like, get the satellite shipped immediately. And it's like, well, if they're not ready, then they're not ready. And yes, there's fair criticisms against the company for saying that they could get to 6 satellites per month. And they haven't reached that point yet. Now, obviously they've gotten there. They've gotten to, I think, 10 satellites per month on Microns, but they haven't got there on the buses themselves. But at the same time, just given where we are around launch, there's no need to get to 6, right? And you gotta make sure at this point in time with production, you wanna make sure that you're, you know, refining that process. And also, I think on the testing side, you know, getting additional testing capacity is important as well, which I think the company is, you know, clearly building out. But yeah, just be patient. I think for me, this past drawdown, and look, it's drawdown, the stock is basically at $62. So we've been flat. We've been flat for 3 months. We've been up to the low $70s and as low as the, I guess, mid-$50s or so, and we've chopped and people have really been upset about it. But for me, yeah, I'm just holding and being patient because I know It's a cliché, but I know what I own and I know what catalysts are around the corner. And as I was saying before, I think a few are about to get uncorked this weekend. And so I'm happy to wait. And I don't have short-dated options. I'm not under any financial duress or pressure. Sometimes during these periods when a company is in the process of working through issues and the stock is flat, these are times when you can go take care of errands around the house, go outside, touch grass, like we say. But for me, I've been researching a few other ideas as well. And some people have seen some of the posts that I've done around, for example, Stablecoin X, but sometimes it's good to get sucked into something else while you're waiting for something important. And that allows you to have patience and not be myopic and totally focused on one thing, and it allows you to pass the time, which I think Cook talked about this as well. So anyway, yeah, I think all the ingredients are there. I mean, low sentiment, low implied volatility, high short interest, and we've got these massive unlocks that are about to come around that I think are going to surprise the market. It's interesting, as I was saying before, the Berenberg research analyst, someone that I know spoke with them, and the only calls they got were from hedge funds who were short, and they were upset with this guy for publishing all these positive things, which is funny because everyone's trying to, I guess, keep the stock down, these guys. But But yeah, if you look at the rest of the street, no one's really following AST as closely as this guy, but that's going to change. And so I think the next 3 months are going to be outstanding, and I feel pretty, or not pretty, I feel very confident in that. So now's the time to strap in, lock in, stay focused. What I mean by lock in is not watch the stock price every day and get upset and claim manipulation because at the open, stock's up and then it goes down, or it goes down, it goes up. It is interesting because the days where AST stock price outperforms the space sector, no one says anything, but when it underperforms the space sector, people get angry. They're like, this is because management's not doing something. And it's like, Guys, just come on, man. It's getting old. Just relax. If you truly believe in the company, sit back and just let them do their thing. And there are some people who get upset and they're like, well, we need to let management know. And it's like, yeah, email them, email them, call IR, email IR. They actually get all that feedback. But if X is your forum for public therapy, like you've got to shout into the void and have people kind of back you up, then that's up to you. I guess that's fine too. But I think it's important to just reflect on why you're invested in the company. Some people truly have been like, management, they're frauds and they're liars, which by the way, I saw all this stuff back in 2022, 2023, 2024. The stock price is up, people are okay. When the stock price is down, management are liars and frauds. But yeah, if that's truly the case, imagine there's people who are really upset with Abel. If you don't trust your CEO who founded this company and is chair of the board, and you're claiming that they're a liar and fraud, that's on you. If you're invested in a public company and you don't think that they're good stewards of your capital and a fiduciary, and they're building the company that you think they are, you have the ability to vote with your wallet. You can sell the shares and you can go buy something else. The stock market is huge. There's a tremendous amount of opportunities out there. If you're going to lose sleep and burn brain cells and be upset, then there's better ways, there's better opportunities to invest in risk-adjusted or mentally adjusted for you. Or if you've got your portfolio of 50% of options in AST, then that's on you. Or if you are overexposed on AST by choice and and feel like you're missing out on something else, I don't know, like something in AI, then sell. No one has a gun to your head. No one is forcing you to own shares. You can sell and you can move on. You can go buy something else. And I see people, I mean, there's a few people out there who consistently lambast the company and they've done this for quite some time. I've had to mute and block some of them. But it's like there's this diarrhea on X timeline under AST where they have to talk about it every single day. And it's like, my God, just sell. Just sell. Do everybody a favor. Just sell the stock and move on. Some people have pushed back on that. They're like, well, I have every right to voice complaints about the company. Yeah, you do. You do. I have every right to mute you or block you. Everybody does, right? But if you want to do it in a productive way, like if you truly do believe in the investment and you want to be productive about it, send the company an email. They may not respond to you. They typically won't because they're busy. Or call them, and/or call them and leave a voicemail. This is what investors in normal circumstances do. As I mentioned before, back in the day before social media, as an institutional investor or retail investor, you can do these things. You can call or email the company and say, I'm dissatisfied with these things. I want you guys to address them. I want you guys at the next earnings call, submit questions. The company is aware of all these things and they are very appreciative of retail investment support. And I mean, when you go on earnings call, what are the first questions they ask? They ask questions from retail investors. And they were probably one of the first companies to take questions from retail investors. And not only do they do that, they prioritize them over the sell side. Maybe that's why the sell side doesn't follow the company as closely. But yeah, I think, and I don't know, I sound like a broken record because every few Spaces I have to kind of reiterate these things, but yeah, just reflect on yourself. a look at your portfolio, think about what you own. Do you truly understand the names in your portfolio? And for AST in particular, you're invested in a high-growth, high-risk stock. The opportunity is tremendous. The technology has been proven. Now that they're at the point of execution where they have to get production cadence up and launch the constellation, there's going to be setbacks in that. And that's okay. That's just part of the process. Tesla went through it. SpaceX went through it. Everybody's gone through it. And so if you are having a tough time in dealing with that, then maybe you're too big. Maybe you're too big in AST, or maybe owning all those calls was not the right idea, or having tremendous exposure to ASTX, like leveraged ETF, maybe that was not the right idea. But When people project their insecurities or their issues, then it seems pretty obvious to me. It comes out as pretty obvious, right? And so yeah, just reflect on that. But anyway, that's pretty much all I had. Maybe I'll just see if there's any questions. Let me just look here. Let's see. Do you personally think AST is going to meet their beta service target of 25 by end of year? If not, how should we approach thinking about it and the stock price? Secondly, have you been adding, especially your leveraged positions? Let's see. So first, is AST going to meet their beta service target of 25 by end of year? My guess at this point is probably not. They'll probably get to I think for beta service, they could start as early as 20 satellites. So I think they could hit that. But for me, the key thing is, are they going to get to 45 initially and then beyond that? And for me, I'm really looking for production and launch cadence. And so I don't really care about the exact date that happens, but if we see, for example, batch 3 and batch 4 get shipped out within, I don't know, 1 to 2, 3 weeks of each other, that would be very positive, right? Because then you can start to see the cadence picking up. And so for me, that's probably the most important thing, but how should we approach that thinking about the stock price? Well, yeah, I think once production and launch become more visible in terms of the path to get to 45 and then beyond, I think the stock's really going to work. But beyond that, there's these other catalysts as well. I mean, I think probably the biggest one, I think Golden Dome will be good, but I think the biggest one is going to be T-Mobile, by far, because that would be bigger than Verizon Verizon picking AST was important and it rerated the stock. We know that Verizon had evaluated Starlink and AST and decided to go with AST, so that was big, but that was never really a formal thing. It's something that sell-side talked about and I talked about, but for T-Mobile to join with AST, that would be huge because that is the marquee customer of Starlink. That is what helped propel Starlink's business. By the way, Starlink direct-to-cell would've never been a thing without T-Mobile because T-Mobile had to provide their 1900 MHz spectrum to Starlink in order for Starlink to actually develop the service and test it out and see if it worked. Without that, Starlink would've been nowhere. They would've had to acquire or lease spectrum from somebody else. I think that's going to be a huge game changer and that's going to happen. So is that going to, or how does that impact the stock price? I don't know. I've talked about it conceptually with Cook and yeah, the stock could double that day. So is it going to double that day? I don't know, but should it double that day? In my opinion, it should, because then you've locked 100% of the US market. And then at that point, it's Starlink having to go carve out by going directly to customers, carve out some portion of share without an MVNO agreement. So that's a really tough hill to climb for them. Have I been adding? Let's see. So I have been adding some stock and then recently this past week, I bought some upside calls. Again, very tiny, not big at all relative to my portfolio, but I have been adding. And I will say, someone asked me, do you still have AST? Is it a big part of your portfolio? It is. Before, I would characterize it as— and this was primarily because of the fact that AST had appreciated so much over the years, but it was a vast majority of my portfolio, whereas now it's actually come down quite a bit. So I own the same amount of shares and exposure, and I've been adding, but the fact that this other position that I own USDE, that I had sized to call it 4% or 5%. That has grown to a pretty material part of my portfolio now. Maybe it's a third or more, which is kind of nuts, and that's happened over the last few weeks. But yeah, AST is still my largest exposure. I've only added to it. I haven't reduced it. If someone asks why, it's because there's all these amazing things that lie ahead. And so we're in this period of time where the stock is kind of bumping along and we're consolidating, but it kind of feels like back when we had gone to $39 and then we had a drawdown to $20 and we kind of bumped along at $20 to as low as I think it was like $17 or $18, and people were so upset. they were lambasting management and upset that things weren't happening soon enough. Lo and behold, we went from 20, and it was volatility had come in, sentiment was bad, and then we, I think it was June, we went from 20 to 55 in a matter of a week and a half, 2 weeks. Then people were like, holy shit, that was a huge move. And then of course, not long after, we then went to, what was it, $100? So I kind of feel like we're in that spot again, like sometime around May 25th, where people were upset and we were just bumping along, and then all of a sudden we re-rated from a few catalysts there. Let's see. When do you think we will start commercial service? If we assume they launch They have one launch every 1 to 2 months and they have 10 launches, 8 Falcon 9s and 2 New Glenns. They will not reach 45 sats until early 2028. I think we will get to commercial service probably sometime by mid-2027, call it at earliest, just given kind of the delays. But I think it's important to note, once we have beta service up and if you're launching satellites, on a proper cadence, it's not going to matter. It's not going to matter if commercial service starts in mid-'27 or late '28. Now people might say, well, Starlink's going to have their service up too. Starlink faces the same issues that AST does. I remember when Direct-to-Cell in 2022, they said they were going to start beta service in '23, and beta service actually didn't start until, call it, Late '24. They said early '23. It didn't start till late '24. And then commercial service wasn't really rolled out until mid-2025. These things take time. But the key thing is this hockey stick where once people see that you are on the path to get there, and by the way, we have all the materials and everything we need for, what is it? We're at 48 satellites now. So the path in terms of materials are there. So it's just a matter of the street pricing in things once there's an ongoing cadence. And so some people have asked, what about Blue Origin New Glenn? How quickly can we get commercial launch cadence on New Glenn? Well, New Glenn, they haven't been— in addition to rebuilding the pad, they've actually been building more boosters and more first stage boosters and second stage boosters. And so by the time New Glenn gets back to the pad, they're going to have a whole warehouse of these things. And so once they get that first, call it 2 commercial launches successfully done, then you're going to see, as this person points out, a launch of 4 Bluebirds, and then that will be 6, and then that will be 8. We don't need Blue Origin in the near term, but we certainly need them over the longer term. Folks should be cheering for those guys on. Let's see. Is Meta rumors speculation even worth discussing? No, it's not. Are we working with Meta? Yes. Is Meta working with others as well? Yes, they are. If you guys will recall, Meta worked with Starlink to optimize their applications to run on very narrowband data, which is what Starlink Direct-to-Cell is. Meta does the same thing with AST, right? They're optimizing or they're in discussions to optimize their applications to run over AST's constellation. If you look at what they've done with Muse and these wearable devices, there's very easy connections to make as to why they'd want satellite connectivity to those devices when there's dead zones or in 1-bar zones. And so yes, we are working with Meta. Would Meta make a strategic investment? Yeah, I could see that. Are they going to buy AST? No, I don't see that happening. The only strategic companies that I could see buying AST at some point in the future, not in the near term, but would be Google because it would make a lot of sense given that they own the operating system for mobile phones. They work with all the M&Os. They're a partner, not competition with M&Os. So I think they would fit quite well. I guess Amazon, Blue Origin could be a potential acquirer, and Apple. But beyond that, I don't think the company is— I don't think Abel would look to sell the company would he entertain discussions? I guess, but I think we're at such an early stage of the opportunity set, it just doesn't make sense. I think this is Abel's one and done. This is his magnum opus. I don't think he's looking to sell the company for $100 billion. I think he's looking to build something that is game-changing and is going to Yeah, change the world, right? Because it— the original mission wasn't, um, the developed markets. It was really to bring connectivity to undeveloped markets. And given that Abel's from Venezuela, um, I think that's the true aim of the company, um, outside of, you know, the military work and, and doing commercial markets. But, um, but yeah, let me see.
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[00:56:07] Speaker C: I think that's pretty much it. Oh, there's a few more questions. How confident are you that they will have a partnership with T-Mobile very soon? Any evidence on that? I don't have evidence of the timing of it, but they certainly are in talks and the talks are going well from what I understand. The fact that I mean, the writing's on the wall, right? I mean, Deutsche Telekom is already testing, putting in infrastructure and testing with AST, and Deutsche Telekom is the parent of T-Mobile. They control T-Mobile. So what the parent does, the child will do as well, right? And so is the timing going to be by the end of the year? It's not. I can't say that with certainty, but just given how quickly Starlink is moving, I think T-Mobile wants to lock something up sooner rather than later. Let's see. Can you please talk about radar award timing? Scott mentioned soon on the call. Award size and insights, if you have any. I don't have any insights on that, but I would expect the company to discuss it. I think The award around radar, well, clearly the Department of War and Space Force are working with AST on that, but the timing of when that will be disclosed, unclear. But as Scott mentioned on the call, he said they hoped to share those details soon. So my guess is they're probably waiting on the government to give them the okay to disclose that. And/or if there was monetary awards around that, maybe they're waiting to find out what the size is. Let's see. I think that's it. Someone's talking about calls losing money. You don't have to write them to zero. Yes, you don't have to write them to zero. By the way, when I say size to zero and I mentally write them off, it's really just a framework which I use. You don't have to use it and I don't write calls necessarily to zero, but when I invest in them, I assume they go to zero. And if they don't, then great. But that's how I kind of deal with them. And as a result, when they do go wrong, then I'm okay because it's like, oh, I've I'm throwing this money away. And if they do work out, then it feels like I've won the lottery. But I will say over time, have I been outside of my professional career, but just personal investing, have I won net-net in call options over the course of investing? That's a good question. I probably should look at that. I've had some massive wins, but I've also lost, burned premium over time. And so if I if I had to guess, it'd probably be flat or slightly up if I'm lucky, or probably slightly down, who knows? But sometimes in investing, people want to make things interesting, just like sports betting. And so when I look at trading options, that's kind of how I view it. And they're really just lotteries because I might have high conviction that some catalyst coming up is going to move the stock positively, But you never know. The market, it may be truly priced in, or the reaction to the market in the market might be negative, or the market may not know how to handle whatever news it is and they just don't move the stock. Anyway, that's all I had. Let's catch up again soon. I know Kuk has a space this evening, but we'll talk again.
[01:00:03] Speaker B: Bye.
[01:00:18] Speaker C: Thanks for listening to the AST Space Rover 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 Space Rover, please visit astrover.com. AST Space Mobile, make sure to subscribe. Thanks again, and I'll see you next time.
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