Anpanman - BONG 9x4, DB conference, and Market rout

[00:00:00] Speaker A: T-minus 10, 9, 8, 7, 6, 5, 4, 3, 2, 1. Liftoff detected.
[00:00:15] Speaker B: First motion.
[00:00:17] Speaker A: New Glenn has cleared the tower.
[00:00:32] Speaker B: This is the AST Space Mobile Podcast.
[00:00:36] Speaker C: We just basically turn 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.
[00:00:54] Speaker A: Everyone, thanks for joining. Uh, this is a bit last minute, but I figured I would get people together just given everything that had happened, um, that has happened over the past week and especially today. Um, wow, we had some serious volatility. Um, but yeah, I just wanted to talk about, uh, some news today on AST SpaceMobile, but then also just talk about the market in general. Um, maybe I'll start with the market. I think Obviously the market's been a bit on a knife's edge, and I think part of the issue is that the Fed has been flying blind right now. Just given that we had this government shutdown, I think initially the market was okay with that and continued to rally, quite frankly, as the government was shut down. However, as we approached a record level of days that were closed, the market started paying attention again. And some of the issues that have come out of that is, well, first, you know, you had a number of employees that were not getting paid, and that's going to be a hit to the economy. But then also it started impacting, you know, commercial activity. Like, for example, airlines started canceling flights. And so I think that finally got politicians to get off the pot and do something about it, and they reopened government. The issue though is that we've been flying blind in terms of economic data for quite some time now. And so that, you know, people have been kind of looking for private data to give some sense of where, you know, folks an idea of where the economy has been going. But of course, you know, the Fed's not going to rely on private data. It's going to wait until Information, official information comes out, which you know it looks like everything through October is pretty much off the table, and so we'll have to wait for the BLS and all these other you know organizations to catch up. And so now we're heading into this rate decision in December, where without information the Fed's got to make some decision. I think heading into the last week or two, it was pretty much fait accompli that. the Fed was going to cut rates and, you know, the market was— this is, I guess, going back to, just look here, like the beginning of October when basically it was risk-on. Everyone, it was assured that the economic numbers looked good, inflation seemed to be in check, and rates were going to come down further. And so you saw a risk-on in assets. You know, occur over the month of October. But then I think the markets, you know, people started getting a sense that perhaps the Fed governors were not all aligned for a rate cut. And now we've seen, you know, comments coming from various governors over the last few days that they're a bit uneasy about, you know, for example, where inflation is, perhaps. You've got all this weird data coming out, like Atlanta Fed GDP estimates are above 4%. You've got some mixed, I guess, employment data earlier today that did come out. And so people don't really know what to make of it. I think the December Fed interest rate decision is now at a 30 to 40% probability of a cut. And so with that type of backdrop, and, you know, we've had some issues with the repo market. I mean, there's just all kinds of shit going on, but, you know, that, and then you've got private credit, which has been taking hits. You've had like a few bad actors where, you know, Tricolor and First Brands, some of these companies have gone under and that's rattled the private credit markets. And of course people, You know, people are focused on the AI bubble, whether that's real. And then you've got the whole host of other people are like, hey, there's this other market, which is private credit. There's probably like a bunch of cockroaches there. And so there's a bunch of things, there's like a wall of worry that's going on right now. And so on the one hand, you've got people wondering if AI is a bubble and if CapEx is actually— all this CapEx spend is actually going to yield any type of investment returns. And then you've got worries about private credit, which has hit all these companies in consumer credit and auto and what have you. And so, you know, you might've read about BlackRock, one of their funds having markdowns, and then they've waived fees. And then I think Owl, Blue Owl tried to merge 2 of its problematic funds and that thing got shot down. And for the people who have gone through the 2008 financial crisis, these are the types of things where they raise your antenna a bit, right? Because I remember in the financial crisis when everyone was like, oh, things are going fine. But then there were these cracks that started to develop where— there was like, I forget, there was one real estate fund that had, that I think it was Bear Stearns actually. It was a Bear Stearns real estate fund that had to get liquidated. And that was like one of the first drops in the bucket, which was like, then became a tidal wave of like the entire real estate market collapsing. But there were like these little hints of it, right? And so you've seen some of that in private credit where, I mean, a name that I'm involved in, which is Pagaya, That company has been doing just fine. But then if you look at the company's bonds, they're down to like 81, 82 that they were just issued, you know, this past summer. So they're trading at a pretty wide yield. And so people are, you know, people are shooting first and asking questions later. And I think that, you know, private credit, AI, you know, those are the kind of big areas of contention right now. The other one is crypto. Which, you know, I was talking with Tut, and I see him on right now. Talking about talking with him earlier about how that was just a massive leverage trade. And you know, when Trump announced the the the restrict the trade restrictions against China in retaliation for critical you know rare earths, you know when China imposed restrictions that was on October tenth that. was a huge liquidation event for crypto, which, um, that caused a cascading of people just unwinding trades and, um, people getting blown out basically. Um, and then you actually had a number of shaky, like stablecoins actually not be stable and they, they depegged. And so, um, so there, you know, that was some initial deleveraging, which I think has continued to cascade to even today. And so Bitcoin, you know, traded down to what, 80-ish, 80, high 80s from a high of 120-ish or so. And so that's a pretty big move. And I know there's quite a bit of people who, and I, you know, have debated this, like, I don't know why brokers allow people to go 20, 50, 100 times leverage on crypto. It doesn't make any sense. I mean, I've talked about like how Holding AST SpaceMobile, for example, like you shouldn't hold it down margin. You might deploy margin tactically from time to time, but it should be very, it should be limited in timing and you should have, you know, very well-defined stops. But, you know, I personally don't ever use margin for that reason. Like, you know, for a volatile asset, you're going to get stopped out at the wrong time, right? And so for people who do crypto, to go 20 or 50x, you're just asking for like one bad thing that has nothing to do with the asset you own. But, you know, there could be some macro issue or, you know, Trump tweeting something and then you get wiped out. And so, yeah, I mean, for the most part, the market has been resilient after, you know, since April when we had the tariff tantrums. But now we're at this point in time where what was thought to be Kind of smooth sailing and that, you know, the Fed was going to continue to ease, quantitative tightening had ended. Now we're kind of in this weird decision point where you had today, you know, obviously Nvidia yesterday, there was some, if you know, the information, the Fed minutes were for the most part, like I would say on balance, Somewhat hawkish. But then Nvidia's results got people bullish again, and overnight the markets rallied. And then coming into today, you had Nvidia and a bunch of other names rally, but then get faded because then people are pointing to various things, whether with crypto sold down, which people who own crypto typically have some exposure to equities, and maybe they're they had to meet margin calls and they sold their equity holdings. I mean, they're all somewhat cross-related, right? But I think what kind of accelerated things today is that you had a number of Fed governors, 2 voting members, 1 not voting, come out with pretty hawkish comments about how inflation is stubborn and that it's likely that they may not cut in December. And I would say like based off of what I see, it seems like the economy is weakening. I don't know where the Atlanta Fed gets like 4% GDP, but when you look at, you know, all the layoffs and inflation seems to be somewhat in check. I know it's somewhat elevated, but it seems to be like, I think the Fed should be continuing or should continue to move forward with a cut. this coming December, but we'll see. But I think that's, you know, markets hate uncertainty, and I think that's where we are right now, which is you've got probably more than 50%, the majority. I mean, depending on how you read the Fed minutes, but it said many members think that a December rate cut doesn't make much sense. Although, and then of course we don't have data to support one way or the other because of the shutdown. And so We're in this odd place where the market wants certainty and the Fed is putting out very mixed messages. And so the market hates that. And then you've got some other things going on, like in Japan they put out this big budget and rates are going up there. And so that's potentially causing an unwinding of a carry trade, which people, you know, you can fund a trade in Japan very cheaply, but now and then go buy stuff elsewhere. But now because rates are going up in Japan, you've gotta unwind that. So yeah, there's a lot of stuff going on. But yeah, I think, you know, obviously it's painful to have a drawdown and I think I saw a number of people pretty upset today about AST SpaceMobile coming off. And, you know, I think it's important to remember The stock is now what, at $50 and it's back to where it essentially was in June. And if you kind of think back to what has transpired since June, there's quite a bit, right? There's obviously, you have, let me just look at my list here. I mean, I won't go through the entire thing, but Legato was approved. They raised $1.2 billion or $1.15 billion of convert. Verizon definitive commercial agreement was signed with Saudi Telecom. They closed the $420 million bridge for Legato. Let's see here, expanded manufacturing floor to 500,000 square feet. They disclosed over $1 billion in aggregate contracted revenue commitments. I mean, there's a whole host of things that have occurred since this past June, right? And so the company has made a lot of progress. I mean, that's balanced with the fact that you know, there has been delays around launch, which now we're coming up on, you know, the first BB6 launch, which will be in either the first or second week of December. So the multi-launch campaign is about to kick off, right? So that's a positive, but then we're in this environment where there's a lot of uncertainty. And I think what kind of, what tipped me off on how the market was you know, we were entering into this risk-off phase is that after the Saudi Telecom deal was announced, which, you know, for all intents and purposes, like if you were in a very supportive environment, that would've sent the stock, in my opinion, up, you know, 20% or so, because that's $175 million prepaid revenue. And then you've got a contract worth, you know, at a minimum $1.8 billion over 10 years and minimum revenue commitments. That piece of news I thought was going to send the stock pretty— the reaction would've been quite positive. But however, the reaction that day was muted. And then of course, the stock continued to sell off thereafter. And so I think when you have a situation like that, it kind of tells you where the market sentiment is in terms of risk, where it really doesn't matter what a company's fundamentals are. It's going to matter more The macro kind of overwhelms it. And so, you know, there's been a number of people on Twitter who have complained like, oh, the stock is off, you know, it's had a 50% drawdown, which is brutal. But then if you look at all the other areas of speculative growth, you've had drawdowns that have been equal, if not greater. And so at this point, we're kind of in this situation where it's really the macro driving everything. And until things settle down and the market really gets its footing as to what the Fed is going to do and what the market backdrop's going to look like, I think we're kind of at the whims of the macro picture right now. And so I think people should understand that and position accordingly, meaning do not be in margin now. Now's not the time to do it. And If you're looking to get leveraged bets, then do it in such a way that is capped and you understand what your risk is. For example, you might deploy call options or call spreads. Right now is not a good idea to short puts because that's just giving you more potential exposure in a down market when vol explodes. It's not just the price movement, but it's also volatility. And so, you know, just make sure that you are structured in such a way that you can ride out this volatility. Because I think people, there were some people who tweeted that they aggressively like tapped into margin on the way down, which I think, you know, it's, that's unfortunate because I think, you know, it can work in certain instances, but when you have a situation like today, I was just reading on Bloomberg just people's, you know, market strategists respond, you know, kind of commenting on what happened over the day. And pretty much everyone's like trying to find answers and no one really knows. And I think it's a host of all these things, right? But again, when you're in that type of situation, you don't want to be overleveraged and basically get forced out of your position, which I think unfortunately, and just look at, you know, people in crypto, that's what's happened in spades, unfortunately. But But yeah, so that's, I mean, that's kind of the market right now. I think, you know, I can't say for sure, like we're going to bottom or we have bottomed, or maybe things will rip from here. I had posted some charts about how, you know, NeuroEdge had put out that short interest as a percentage of market value for some of these like more speculative names is back to highs. And that's usually a good recipe when you have a risk-on environment where people feel confident. And if you have an Nvidia type of earnings and beaten raise where it changes the narrative, that can help. But I think today, as I mentioned before, like the fact that you had 3 Fed governors come out, 2 of which are voting you get very mixed signals in the market or hawkish signals that kind of put a damper on things. So anyway, I still think, you know, depending on how, you know, Powell's got a pretty tough decision heading into this December upcoming Fed meeting. If they cut rates and if they cut rates, like that may or may not do it, right? Like it's going to depend also on the commentary around it, which is, Maybe they don't cut rates, but then he gives very dovish commentary that they're ready to do it, but then they've got to wait for data. But maybe perhaps they'll hint at the meeting after that they'll do it. So it all depends. It's not as if a cut in rates is going to do it. It also depends on how his comments are going to go around that.
[00:18:52] Speaker C: Yeah.
[00:18:53] Speaker A: Anyway, but yeah, that's the market. It sucks. The market sucks right now. No, you know, there's no sugarcoating it. Like a 50% drawdown in our favorite name. It is what it is. If you guys will recall in the Spaces that I did in previous weeks, I had mentioned when we were hitting all-time highs, like if you have made life-changing money, like potentially think about selling a portion to either cover your initial investment or even better, like cover your net worth even before you bought the thing, bought AST SpaceMobile, which I did hear from some people that actually did that, which is great. But I think also, you know, going back to, I do want to talk about this whole idea of like buying and selling and trading around positions. I trade a portion of our position around because it's in a tax-free account, which is why people are like, how do you have infinite amount of money? It's like, well, sometimes I sell and then when it's up and then when it's down, like I buy it back and like I'll tweet about it, right? Like, oh, I'm going to buy some riskier. And I have a core position which is in a taxable account, which I don't touch because obviously there's like really big like capital gains in those shares. And if I ever sell, then I've got to pay taxes. And so This is just a reminder for people, like you might get people on Twitter saying, oh, you should buy and sell and buy high and, or sorry, buy low and sell high, and then you can just trade around the position. The issue with that though is obviously you're going to create a taxable event. And one thing that I think people should be aware of is like when you do sell and you do owe taxes, like set aside funds for those taxes and do your best, do your absolute best, like not to touch those funds because Oftentimes what happens is that, let's say you did sell AST at $100. Let's say you sold your entire position and you have, yeah, I'll just make up a number. Let's say you crystallized, you're one of these short-term trading guys and you crystallized $1 million of profit, but you've got to pay short-term. Let's just, I'm just going to make up a number, but let me, if you're here in New York, maybe you pay like, I don't know, 40, 50% on that, right? But then the stock trades down and then it goes to 50. You're like, oh great. Or sorry, this is, I'll make a better example. So the stock trades down to 70 and you're like, oh great. So you buy it, you buy it back, you buy more shares back at 70 and you actually utilize everything that you had sold and you buy it back at 70. You don't keep set aside whatever you had for taxes. And then all of a sudden the stock goes from 70 to you know, maybe it goes to $40. And so you're down money on that position. And then let's say you fast forward to a year and let's say the stock is still at $40 or whatever. However, you owe taxes on that million dollars. You know, you owe 40% of the taxes on that, but you've lost money on getting back in the stock and it's gone back down. And so I think an important thing for people to remember is that if you Do trade and crystallize gains and you owe money, make sure you set aside taxes because oftentimes you'll see people like get back into stocks and then they lose a lot of money. And then the IRS, you know, maybe they continue to hold onto it or they, you know, they don't sell it before the year end to offset the gain that they realized. And then you end up owing more money. than, for example, you might actually own in stocks the following year. And so you don't want to be in that type of situation. And I think that's where when people are actively trading stuff, they kind of, you know, when people talk about it on Twitter, they kind of conveniently ignore that aspect of it, which can be quite dangerous. So, you know, as opposed to like if you held, if you own the stock and You know, you bought it, let's say your average is like $5 and it went to $100 and you didn't sell it and then you're down to $50. Well, you probably feel pretty bad about it, but then you don't have a taxable event in the year and you just continue to hold what you have and ride it to the next year. Whereas if you did sell it at $100 and then you bought it back at $70 and then it went down to, you know, $40 or whatever it is, you do have a taxable event. You have to pay capital gains. on the difference between 5 and 100, and then you bought it back and then it went down. And so now you're down money and you've got to sell some portion of that to cover your capital gain. That's a pretty tough proposition. And by the way, like if you bought it back within 30 days and you do have somewhat of a loss, I mean, you, there's like Other implications from a tax perspective to think about. Because then, you know, if you have a loss and you try to crystallize that loss before the year end so that it offsets your taxes, then you can sell it, but then you can't buy it back for 30 days. And so yeah, there's like a whole host of things. But anyway, yeah, just, I think be aware, especially for those people who have pretty significant capital gains, like just be cognizant of what you owe, especially as we come into year-end here with what, a month and a half left. And so just be careful to set aside money from what you owe. And you know, there'll be people who are like, well, I'll just hold onto this stock and it'll rally next year and, you know, I'll have enough to pay for my taxes in April. Or, you know, you can obviously getting extensions all the way through October. But who knows? Who knows what the future holds? So just be aware of that. But anyway, by the way, like if people have questions or comments, feel free to drop them in the comments and I'll try to address them. But onto better things. Yeah. So today I think was a pretty interesting day of disclosure for Blue Origin. And so I was commenting to someone else today that had Blue Origin not landed New Glenn, then obviously they wouldn't have rolled this roadmap information out today. But because of the fact that now they have market credibility, they landed the booster, now they can roll out kind of the big guns here. And so what was interesting today is that David Limp of Blue Origin, they released their next, you know, the next iteration of New Glenn, or not the next iteration. It's, well, it's the next, it's the heavy version of New Glenn, which, you know, they obviously launched the New Glenn 1 and New Glenn 2 recently. But then this next iteration, I think based off of what I've read, is going to be sometime available, is going to be available sometime in 2027. But the key thing is that this larger version of New Glenn, which is called Heavy Lift or Super Heavy Lift variant, is going to have 9 by 4 engines. So 9 BE-4 engines in stage 1 and then 4 BE-3 engines in the upper stage. And so what that's going to allow the rocket to do, and it's going to have a larger fairing, is that it's going to allow the company to launch 70 tons to low Earth orbit, which I think, I might be off, but I think the current New Glenn can do 40 to 45 tons to low Earth orbit. So, you know, Catsy was kind enough to look at the measurements of the new fairing and then figure out how many Bluebird Block 2 or Block 2 Bluebird satellites can actually fit in this heavy variant. And, um, Based off of his math and looking at the designs, he was coming out to around 12 Bluebirds, which is pretty crazy. I think New Glenn in its current form can take up to 8 Block 2 Bluebirds. But then I think at least the initial, the early versions of New Glenn are probably going to be limited to 6 Block 2 Bluebirds. And so my guess is that, you know, come February or March when the first, maybe, well, not the first New Glenn, but it'll be either the third or fourth New Glenn to have launched takes up, you know, Bluebird satellites, then that one will probably take up 6. And then, you know, today Blue Origin discussed the, you know, their focus in improving the efficiency of the engine. So my guess is that the current New Glenn, you know, form factor will be able to take 8 eventually, maybe, you know, maybe perhaps in the second half of 2026. But, um, but of course the bigger news today is that there is this heavy version, which will have the ability potentially to take up 12 Bluebird satellites, which is crazy to think about. 'Cause then, you know, in order to get, if that's 12, in order to get 60, you know, 60 satellites up into space, that's just 5 launches. Now, obviously, like, that rocket is not going to be available until 2027. But the fact that that's on the roadmap and, you know, the company eventually wants to get to well over 100 satellites in orbit, you know, New Glenn Heavy is going to be a really big deal in terms of a launch vehicle that's going to provide you know, a cost-effective way to get the constellation up. So that's good news. So that came out today, which I think was a surprise for everyone. I think, you know, had they not landed the booster, then they probably wouldn't have released this roadmap. But then now that they have credibility and the market is very excited about Blue Origin, they were able to put this information out there, which is great. And I think it's something that for Axiom Space Mobile shareholders was a surprise. I don't think anyone expected this. However, As I mentioned before, I know Abel and Scott and management are very close with Blue Origin. You know, they've toured the facilities a number of times and they diligenced, you know, the company's ability to get this rocket, you know, this program off the ground and onto a regular cadence. And they know Dave Limp quite well and they've, you know, obviously they've met with Bezos a number of times. And so So yeah, I assume that this roadmap was part of their decision to go with Blue Origin for a majority of their launches. And, you know, we're still using ISRO and SpaceX as well. But yeah, I think today was a pleasant surprise. Of course, you know, the market, it's one of the few pieces of positive information that came out today. But yeah, I think that's, you know, once the market kind of settles down and people kind of really think through what this means for the company in terms of the ability to deploy the constellation. You know, obviously production has to get up to scale as well. But yeah, this is a big, big positive. The other thing is, let's see here. Now, I, I wasn't able to hear Scott speak at Deutsche Bank, and nor do I think any, you know, no one that I knew directly. But there was some feedback from folks who did attend. that conference. And for what it's worth, it sounded like Scott, there was some type of dinner event and it sounded like he was very confident that the Israel launch is going to happen in the first half of December. And it sounded like overall the company is chugging along in terms of getting production up to speed and they believe they'll meet their cadence. Obviously, proof is in the pudding. We'll see. But it does seem like we should be able to get some update on Bluebird 7, you know, being shipped to Cape Canaveral. From what I understand, I believe like, you know, there were some comments about at Deutsche Bank about inviting some of the institutional shareholders to come visit for that launch in Cape Canaveral. So, you know, those are positive signs. I mean, we'll see, obviously, but But that that was some positive feedback. Let me see here. Anyway, I'm gonna look and see if there's some comments here. Okay, Cook Report TDLR: Is the stock going up or not? Okay, I think let's see in the near term. I'm not gonna be. I I'm not sure if it will go up or not, but in the medium and long term, I'm fairly certain the stock is or I'm I'm. Positive, the stock is going up. And I think, as I've mentioned before, you know, we're at this point where we are at, you know, we're on the cusp of the launch campaign. You know, we've got December kicking off the first launch. And then the key thing for me, which was a big, you know, a big uncertainty is, was Blue Origin, right? The fact that we're relying heavily on New Glenn and to see That rocket land its booster, complete its mission in terms of delivering the 2 Rocket Lab satellites that are going to be heading to Mars. And then to see that booster being returned to Cape Canaveral, you know, they, today they took it off of the barge and then now it's being rolled to facility to be refurbished for this next launch, which— which crazy enough, like they are targeting January for that booster. So yeah, we'll see like how that goes. But I think unlike previous times where, you know, you had this big event for the company and then you had to wait for, you know, months for the next thing to kind of happen, we're at this point where, and I've said this before, like we're going to be launching commercial, you know, the cancellation and commercial service. And so I'm bullish. I mean, I think the macro is what it is and the market's going to be volatile until it figures out, you know, until the Fed figures out what they want to do and we're kind of adjusted to whatever the new normal's going to be. But in the meantime, you know, today I bought more shares in AST. Some people ask like, how do you have unlimited liquidity? I'm human just like everyone else. I don't have unlimited liquidity. As I mentioned before, I do trade some part of my position in taxable accounts. And so that allows me to buy things when they go down and sometimes I sell a portion of that tax advantage, the shares that are in tax advantage account, I sell them when they're up. But then what I've been doing over the last, I guess, 2 weeks is that I've actually started to consolidate some of my positions. And so some of the SPAC stuff that I'm in, That I still like, but kind of, and this is kind of the choice that folks should make or consider if you feel like you need to do something. And oftentimes, by the way, like some, you know, the time, sometimes the best thing to do is to do nothing at all. And that definitely holds true being a long-term shareholder in AST SpaceMobile, like just hold your shares. Don't like try to trade them around or don't, you know, go crazy in options, you know, sell your stock and just buy options. Because, you know, options are finite in time. And when you have a macro backdrop like we do and volatility, if you have short-term options, oftentimes you might be right about a company's improving fundamentals, but it won't matter and you end up losing in that type of trade. But But as I was saying before, I tweeted about this earlier today. When you have periods of drawdown where everything is correlated and everything goes down the same amount, like let's say you've got 3 different investment ideas that you like, and let's say AST is one of them, you've got 2 others as well, and then you have a market correction going on and everything, you have all 3 names draw down, I don't know, 50%. equally, all of a sudden, you know, one of them might look much better than the other 2. And so you might sell the other 2 and recognize a loss, which by the way, from a tax perspective, that's great. And then you might consolidate into the position that you have more conviction in, right? And maybe the risk reward is much better at that point too. And so that's what I've been doing as well. I've sold, I've lined up on some other things and I've actually consolidated back into ASTS. And so to the extent like that's something that people can do, like that's something to consider. Anyway, let's see. But yeah, to Cook's question, is the stock going up or not? Near term, who knows what it'll do tomorrow, but over the medium and long term, I'm very confident it's going to go up. Let's see. Give us your best guess of the likely bottom and absolute bottom. Let's see, under $20 possible if BB6 doesn't launch and BB7 gets shipped, say mid-December. Okay. So let's put that into context. Sorry, someone's texting me. I'm in my car waiting for son's soccer practice, which he has late. Under $20. So Let's look at the current market cap of AST SpaceMobile. Current market cap is $18.7 billion. And so, you know, the company just raised $1.2 billion. I don't know if Bloomberg's cash amount, cash is updated. I don't think it is, but you know, let's say the company has like 3, call it high, let's say $2.8 billion of cash. And so You back that out. Well, then actually there's debt. So the enterprise value's going to be roughly the same. So $18.6 billion. So at $50, like, let's just do this on the parts, right? Like the company ownership in Legato is worth that 80-year spectrum rights. Obviously there's CapEx that has to go around it to actually deploy it for it to be valuable. But let's just say it's worth, I don't know, $15 billion. So $15 billion backing that out, you're basically here, if you're buying the stock at $50, you're getting the rest of the business for $3.7 billion, which to me that seems kind of crazy. Like, can the stock go to $20? I guess it could in some weird scenario, but I would be I kind of think you have a hard floor value just on the spectrum alone, right? Which is, I mean, you pick a number if it's 12 or 15, but we're not that far off from it. So, you know, it's kind of funny, like you've seen Globalstar trade up recently because people are now like, oh, hey, Globalstar owns a bunch of spectrum, which, but then they, you know, I saw this write-up in Seeking Alpha. of all places, which, uh, you know, most of the people post there write some pretty bad, um, bad pieces. But there someone was writing about how Globalstar spectrum is very valuable. And so, um, you do that, some of the parts analysis and, and voilà, like it supports the stock price or, but, but the issue with Globalstar, as we mentioned before, is that Apple owns 85% of that capacity. And in that, in that article, it, it, by the way, it didn't mention that at all. And so what you're really playing with is like 15% of that capacity. And then of course, you know, they do have some other spectrum, like they have this, this, you know, 2.4 terrestrial spectrum as well. But anyway, but yeah, I would argue that now, you know, you're getting AC Space Mobile, you know, back out the spectrum, you're getting it for like $3 or $4 billion. And, you know, we just saw the company announced $1 billion in minimum revenue commitments. You know, you've got the defense business, which is probably, you know, Scott quantified it as likely to generate hundreds of millions of revenue next year and the following, you know, they eventually want to grow it to over a billion in revenue. You've got commercial, which is going to be, I believe, hundreds of millions next year, then that's going to grow as well. And so I don't know. This seems pretty damn cheap to me. Like $3 to $4 billion for that business outside of just the spectrum that they've purchased the rights to use for the next 80 years. That seems pretty damn cheap to me. I feel like, you know, can we go down to $45?
[00:40:16] Speaker C: Maybe.
[00:40:16] Speaker A: I don't know. But if you look at the chart, excuse me, if you look at the chart where the market started to recognize the value of Legato. And so Legato was announced in January and the stock kind of traded in the $30 range. And then it wasn't until June, actually, let me see, when did EchoStar SpaceX happen? Bear with me here. That was September. So let me go look. So the EchoStar SpaceX spectrum transaction happened in September. However, my guess is that the market, yeah, and it was rumored and it probably started getting leaked around the summer. And so the stock kind of traded into the 40s to 50 range. And so we're kind of back at that point now, right? Like the company has made a ton of progress. They raised money. They've announced 2 definitive commercial agreements. One was Verizon, which by the way, like the bears were, were would try to convince us that Verizon was going to walk away, that they somehow, you know, were going to walk away, not sign a commercial agreement. I mean, Tim Ferriss was making all these various like conspiracy theories about it and speaking about it as if they were fact, which, you know, Verizon, by the way, like they signed that definitive commercial agreement. It was only a few weeks ago. And As I've stated before, like, that's a key validation point because Verizon evaluated Starlink. You would think they could evaluate Starlink up until that point and they still signed with AST. And then you also had Saudi Telecom, which is owned by the Kingdom of Saudi Arabia, the government. PIF owns a large stake in SpaceX, you know, they know Elon Musk well, they own Tesla, and yet they chose Acespace Mobile for their direct-to-device service, right? Saudi Telecom entered into a 10-year deal, and that was just a few weeks ago as well. And so I think, yeah, I think we're kind of at the bottom. Maybe I guess starting tomorrow, unfortunately I'm a bit busy, but I'm going to maybe this evening, I'll just kind of make that case, like just some of the parts of the back of the spectrum, which I know a lot of event-driven investors, like that's what they're doing with EchoStar and Globalstar. But yeah, you're getting the commercial and defense business in the AST space mobile for peanuts at this point. It's like $3 to $4 billion. So yeah, I think we are. I think we're at the bottom, but can things get more irrational? Sure. And in the short term, things can get, can go swing too far one way and too far the other way. I mean, the other thing I would say is like when we hit 100 this past October, I mean, a decent amount of that was froth, right? Because I talked about this in Spaces about how You know, the Fed is— there was this optimism in the market where people thought we were on this course for lower rates and more liquidity in the markets because maybe inflation was contained. And then you had all this euphoria around AI, nuclear power, next-generation nukes, and quantum computing. And so investors' appetites for pulling forward discounting the future became much higher, right? Like people actually were, you know, for nuclear companies that are not going to be generating any type of revenue and, you know, are not going to be deploying their technology for maybe perhaps a decade, people were valuing those companies and the valuations for those companies were very rich and people are willing to pull that forward in terms of, you know, discounting that And so AST was no different. Like, you know, the company traded into that level, which I think also, to be fair, you know, we're heading into this launch campaign and you've got these definitive agreements that were announced. I think there was rightly so a decent amount of optimism, but I think for the company, you know, for the stock to then have this drawdown of 50% with the basically the rest of the market for speculative high-growth names. It is what it is, right? And so now it's a matter of when you look at the opportunity and think about launch that's coming up and we're on the cusp of commercial service next year, and now we're signing all these definitive commercial agreements. Like, yeah, it sucks that the stock price is at 50, but I feel really good about where we are. In terms of the opportunity set and execution. And obviously like the company needs to get its manufacturing cadence up. And that's something that we've talked about how to me, it's just a matter of timing and it's inevitable. And for example, some of these risks, whether it was funding used to be a huge bear case about the company. Well, yeah, the company's technology is interesting and it's It has this big opportunity, but they're never going to be able to fund it. Well, we have funded it and we have enough money to make more than and launch more than 100 satellites, right? And then, and then, you know, one of the bear cases of the launch provider you're going with, you know, they're, they're unproven and they haven't landed a booster. Well, they actually got 2 rockets to orbit the first time and the second time, and they landed the booster the second time. And apparently they were really close to landing the booster the first time. But they couldn't, due to some small issue, they couldn't get the engines to relight. So that's gone away. And so now it's a matter of, can they produce Bluebirds? And so they can make enough microns, which is the flat panels that have solar generation on one side and antenna arrays on the other side. But the key thing is the control sat, the bus, right?
[00:46:43] Speaker C: Yeah.
[00:46:44] Speaker A: And so the first 2 were tough because those were metal buses, which I believe, you know, we've speculated that those first 2 are probably associated with the government and related to some experiments. But then now they're pumping out these composite ones, which, you know, we saw pictures in the last presentation where they've got a number of these currently in process. And I think the company disclosed that they've got number 8 through 19 at various stages. And so, so yeah, I think it's a matter of inevitability. It's going to happen, but of course, you know, timing can slip. But yeah, I feel good. I mean, the company's well capitalized and you've got a number of commercial partners that as of last 2, 3 weeks ago, you know, signed definitive commercial agreements, which they wouldn't have done that if the company was not in a good spot. You know, people forget like AT&T was recently at the factory and they probably signed Bluebird 7, which is on the cusp of being shipped to Florida. So I feel good. The stock price doesn't reflect it and it sucks to have a drawdown, but at the same time, like, you know, we talk about sleeping well at night, like I sleep pretty damn well. I mean, I know there's some haters on Twitter like, oh, there's a 50% drawdown, but it's like, Hey guys, you probably don't know this, but a lot of people have cost bases around single digits or double digits, you know, low double digits. So no one's really sweating it. But anyway, let me see, look at some of these other questions here. Someone's asking about some of the parts. Uh, yeah. So I, yeah, I mentioned some of the parts. I mean, as I, depending on how you value Legato, if you want to value at $10, $12, $15 billion, I mean, this is kind of crazy, but Legato and the court were, and this is full ownership, right? Not just 80-year spectrum rights, but I think they were valued at like $30 billion. Um, but in terms of some of the parts, like I think you can, you could say that Legato is probably worth, you know, $12 to $15 billion. And if the market cap is $18 billion right now, then yeah, people aren't really valuing the commercial defense side of the business very much. And so I think, I think, you know, this person's asking about, you know, patent values, which, you know, the company disclosed 3,800 patent and patent pending claims, which are really critical. I think, you know, obviously as more and more players try to get into direct advice, they're going to have to find workarounds on the patents. And I don't think we've seen yet the company enforce patents, but sometimes you let people kind of try to do, you know, figure it out and then you come out, you come after them later. You know, once they've spent all this money and they've developed something, you come out later and say, hey, by the way, you're infringing on our patents and you have to stop or you have to, and if the court determines like some of these patents are fundamental and they have, you have to allow them to license them for fair, reasonable use, then they have to pay you royalty. But yeah, I mean, we haven't even, that's something I guess the market kind of doesn't fully comprehend is the fact that the company has built this massive technological moat around patents. And there are a lot of these are fundamental patents in terms of You know, satellite to direct advice technology. And so it'll be interesting to see, you know, how that develops over time. But, you know, are those patents worth, I don't know, a few billion dollars or a billion dollars? I mean, you assign a value like the spectrum's worth $15 and the patents are worth a billion. The company's trading at $18 billion. And so that's $2 billion of equity value. That seems pretty cheap to me. Okay, let's see. Someone's asking about gold. Okay, I'm not going to answer that question. Let me see here. How much is AST immune to Fed changes in Fed policy? No stock is immune to changes in Fed policy in the. Short-term, all stocks have some level of beta, like co-movement with the market. And so if the Fed came out tomorrow and said, we're raising interest rates by 200 basis points, like every stock would drop. I mean, I don't think any stock is immune to Fed policy, but obviously over the long run, as long as the Fed is rational and the government's rational, like the fundamentals should outweigh the macro backdrop. But anyway, some weird questions here, I guess. Someone's saying, always nice to be reminded that we are not alone in this. That's right. You're not alone in this. There's quite a few of us. And so days like today suck. And I think part of the importance of having a community, well, a community can be good and can be bad, right? Like if you're in a bad investment idea and people just kind of have this cult-like attachment to a given stock or management and it's a bad company and they do bad things and people overlook those things, then that can be bad, right? Like you can have blinders on and not have proper judgment and just get sucked into bad situations, which there are quite a few of those, by the way, from the SPAC class of 2020, 2021, and so on. But in situations where, and this applies to, for example, early days in Tesla or some of those investors that were in Palantir or AST SpaceMobile, It is good to have a community where I think having shared due diligence is important in terms of making a proper investment decision. Knowing, for example, I think, you know, the retail community, the space mob knows probably, you know, relative to your average hedge fund guy, we definitely know a lot more about this company than any of those guys. But I think also part of this this journey is like having the ability when you, you know, when you have experienced market volatility or the company, you know, faces setbacks or whatever it is, right? Like just having a community that you can have this shared experience, right? Where you're not alone and in periods of volatility, because to be quite candid, like over the last 5 years, had I not had friends like Cook and Katzi and Steve and many others here, I don't think I would've made it. I don't think I would've made it through the 5 years. You know, it's tough to, I think, have a concentrated position in any stock. But even if you had a diverse portfolio, right? And you had, you know, if you ran into a situation like this, I mean, even this past April when the market sold off, it would've been hard for people to have a high level of conviction and hold on and kind of see the forest from the trees. And so I think having a community where, and the great thing about Space Mob is like you have people from all walks of life and different disciplines. You know, for people like me, I've been through a number of cycles like dot-com, financial crisis, you know, the US ratings downgrade. And what was that, 2011, 2012? I mean, COVID, of course. I mean, there's so many, right? And so you see a lot of market cycles and understand that this is just part, this is a feature. Like markets go through these cycles and you're going to have moments where it's absolute euphoria. And this was like what, middle of October, first half of October, it was like absolute euphoria. And I'm sure everybody was like, there's nothing I can do wrong. I'm making money everywhere. And that's That's when your antenna should go up and you should be thinking about potentially hedging or reducing some of your risk, right? And so now when the market is going completely one way, and by the way, it's like, it's not just, you know, there are people who are like, well, someone's out there shorting everything. It's like, no, there's like real sellers, like people, institutions, retail. I mean, unfortunately, like I saw some people on Twitter, like they got margin called. And so that's why you see this cascading effect of stocks going down. And it's like, and then, you know, when you have algos get into it and you've got these, you know, CTAs, which are trend following hedge funds that, you know, are quantitative, like they'll, they ride momentum up and they also sell on the way down. It kind of just cascades, right? And so we kind of saw that today where you had a number of, I mean, basically everyone wanting to go one way, whether it's like long only sellers, hedge funds selling who are probably degrossing. Maybe some people are shorting, which by the way, shorting into this type of environment is not easy. Like when you've got stocks down, I mean, obviously the market, I think the S&P is off what, 5, 6% from the highs, but it's hard to short stuff when things are down. If you look at like some of these momentum names and AST, I guess you can kind of include in there as a high growth name, but when stocks are down 10, 11, 12%, that's not something that you probably want to press as a short. If anything, you're probably looking to cover or cover some part of your position if you were, if you were, you know, if you had some profit. But yeah, I think having the ability to, especially for retail investors, you know, having the ability to commiserate with others and kind of keep an even keel and vent, And you see it in Twitter where people kind of use it as therapy where they'll just vent and they'll like go off on management or they'll complain about, they'll find some reason like, oh, short sellers are doing this. And it's kind of interesting because I think there was someone today who was kind of lambasting management about today and whatever wrongs that they were thinking or that the commander could be doing better over the last few weeks just came out. And it's like, guys, like, and, you know, price writes the narrative, right? Like people freaking out and it's like, you know, it's this, the company's no different. Like every stock is down from October peak, like 50, 60%, 40%, whatever it is, right? And so just be able to recognize and be aware of that in yourself. And so next time you'll be a better investor, right? Like maybe if you do have that regret now and you feel bad, then the next time when you do have kind of hit all-time highs, like you should, instead of thinking— and by the way, like people have this fear, they're like, if I sell now, if I sell some now, then, and it goes up even higher, then I'm going to be kicking myself or I'll feel worse. And it's like, well, do you really? Would you feel worse or would you feel worse if like there's a 50% drawdown and you didn't do anything about it? Which I think like to me, in my case, like when I do something, when I'm at an all-time high and I take some action and crystallize some profits and take it off the table, like I feel better because it's like mentally I have a win and then I did something about it. And then when there is a drawdown, it's like, oh, well, it's okay. Like I I took something off the table and so I feel good about it and I'm able to ride volatility much better in that case. But anyway, it's something to think about. But yeah, I agree. I think having people with a common interest in particular, like this company, it helps you through the ups and downs, right? And so even me doing this space, I mean, some of you guys are benefiting from listening to me just ramble, but then I'm also benefiting because I'm Getting all this stuff out, right? And so it's almost like I guess as Kuku would say, it's almost like therapy. But let's see here. Just going to see if there's any other questions on here. But yeah, it's a tough time. You're not alone. Everybody has drawdowns. I think I think importantly, just make sure. You don't do anything rash. Like, I think not going into margin in this sense under a certain environment. If you do have margin, like I would recommend, you know, cancel, removing that margin. 'Cause I think the other thing is like when you're on margin in a highly volatile stock and in a volatile backdrop, one of two things can happen. Either Or one of 3 things happen. Either you're lucky and stock rebounds and you do well because you're on margin, and hopefully you take it off at that point, or things get worse and you get tapped out. You're forced to cover, which is like the absolute worst thing because when you're forced to cover, sell and cover your margin, that's usually at the worst possible time. And then the third part, Which I think is even worse, is that the mental anguish of being on margin, right? Where you're sweating every tick. And by the way, like if anyone feels this way where you're watching a stock and every tick is like brutal, whether it's up or down and you're praying like it's the stock's going to go up if you're long or down if you're short, then you're too big. You're sized too big to the point where it's mentally, it's going to crush you and you're going to end up possibly You know, make bad decisions. Like you might decide to, you know, do more margin or you might sell at the wrong time or whatever it is, right? You're being forced into like this unnatural decision, which is not good. Or at worst, like it mentally, you know, takes you out, which is not good either. So I think it's important to have mental health, you know, physical health, of course, but By being on margin, you're just forced into this like construct where you can't just kind of let the process play out, which is what AC Space Mobile has been over the last 5 years. And it's not always been happy. It's been brutal, like absolutely brutal at times. And then for those people who were able to, who had the conviction and mental fortitude to ride through those periods of uncertainty, And destitution, it was highly rewarding, right? And everything has come together and we're at this point, like I've talked about this with that meme of the guy who's running with the football and he's about to, and he's celebrating, right? And he's like pseudo spiking the ball, but basically like drops, you know, because he's so cocky, he like drops the football on the 1-yard line and doesn't score the touchdown. We're kind of at that point right now. And I think Don't be on margin where the football's being forced from you and you can't run the ball into the end zone. Like you've got to be able to, I don't know, you've gotta juke a few more players in order to make it into the end zone. And so that's what market volatility is. And I think heading into 2026, you know, we're here at the end of 2025, the process, like everything looks so good for this company. You know, you've got commercial momentum and we've got, we just signed like the biggest commercial contract ever with Saudi Telecom. And it's not like Saudi Telecom is some little, you know, MNO out in the Caribbean. Like this is the marquee mobile network operator in the Middle East where they're kind of like the, you know, the AT&T and Verizon in the Middle East where people look to them.
[01:03:06] Speaker C: Right.
[01:03:06] Speaker A: And so, not only do they cover the Kingdom of Saudi Arabia, they also cover 13 other countries and they provide services there. It's over what, 170 million subscribers that they cover. And they've got access to 60 megahertz of S-band spectrum. They also are probably going to get L-band spectrum. The setup is so amazing. We're going to dominate in the Middle East. And of course, Saudi Arabia, The prince just met with President Trump and signed a defense pact. Like, yeah, we have these satellites orbiting the Earth. Like, you know, what if Saudi Arabia is like, hey, we want a Golden Dome too? Sure. Like, we're already partners with Saudi Telecom. Like, yeah, we can make that happen depending on, you know, the comfort, of course, of comfort level of the US government. But that's just like one MNO out of 50. And we've got all these other more, you know, these others to sign. Now, obviously, you can't sign all 50 at the same time. You need to stage this out depending on how the constellation's deployed. And obviously, you turn on each country and each region at a time. And then once everything's okay, then you turn on another one. But that kind of gives you the— A sense for like the power, right? Like, We got a $175 million prepayment. That's nuts. Like we went from $20 and $25 with AT&T Vodafone to $65 with Verizon, and now we're at $175 with Saudi Telecom. And then who's next? Like, you know, Bell Canada, Etisalat, which is Abu Dhabi, which, you know, there's some links. The reason why I keep bringing that one up, like there's some speculation that that could be another MNO that comes online and potential premium there could be pretty big. So yeah, there's Telefónica. I mean, there's a whole host of them. And then we haven't even talked about like SATCO JV. We just established our network operating center in Germany and you've got like people from Vodafone who are now part of SATCO JV that are talking very bullishly about all the MNO interests that they've and signed up and we're well positioned to get 2 GHz S-band spectrum out of the reallocation in 2027 for Europe. And yeah, there's just like so much, like there's so many positive things that are happening. And yeah, the market, it sucks. We had the drawdown price change of sentiment. People are now— When the stock's at 100, everyone's thinking about everything that's positive about the company. When the stock's at 50, it's like, oh my gosh, what if BB-6 doesn't launch in the first half of December? Or what if BB-7 doesn't go to the Cape? They're just thinking about all the negative things, right? Justifying why the stock is at 50. It's like, well, the stock must be at 50 because of this. And it's like, no, the stock is at 50 because the macro environment sucks. There's so much uncertainty. And for companies that are pre-revenue, they're going to get tagged more. And by the way, like we were, you know, we just had a $14 million quarter. It's not, not massive, but it's a start. And then next quarter is going to be what, $35 to $60 million in revenue, which is the quarter that we're in right now. Right? Like the, we're, what is it? November 20th. So we've got, we've got like 40-some-odd days left. Yeah. We're going to have Material, and $10 million of that is going to be gateway sales. So the rest of it, as the company has mentioned, is going to be defense contract revenue. And so it'll be interesting to see what the company has to say about that. But anyway, but yeah, we've got Golden Dome. I think the timing on that because of the government shutdown is, you know, we're supposed to find out according to our work, it's going to be probably sometime in January or by January. So Yeah, there's a lot of things that are on the cusp here. And so I think I'll end the space with this. I think in closing, yeah, it's important to stay focused. Like there's, the market sucks and it mentally, it's going to put you in a bad place. But just remember, just know what you own. Like this company has raised, you know, in total liquidity and potential liquidity, $3 billion. We have like For marquee definitive commercial agreements, we've got 46, 47 more of these things to sign. So these are all distinct economic events that are going to happen. And then you can start modeling in what the impact is. And it's like we, someone mentioned Bank of America has like, I think in 2027, just a few hundred million revenues. That's going to be— and that's the beauty of it, right? Like, the Street is underestimating this company, and that's what you want, right? You want the ability for the company to come out once commercial services launch and financial performance kicks in. You want to be in a situation where analysts are having to revise their finished projections higher, right? And raise price targets. And these guys— and we're actually lucky that we have a number of research analysts now that are neutral, or we even have some that are underperform. Those are the ones that have to ultimately upgrade the stock later, right? When things kick off. So let me see. Actually, there are a few more questions that came up. Let me talk. Let me just see real quick here. Actually, you know what? I do have to end the space because my son should be done with soccer soon. But yeah, everyone just stay focused. Like, yeah, tomorrow the market could be down again. and the stock could be down a few more bucks. But just keep in mind all those things that I mentioned that, you know, the market is, the macro is going to kind of move stocks around and volatility in situations like this is actually your friend. Because if you're playing your cards right, like you might be able to stack more shares and use these opportunities. And I think Knowing, you know, to the layperson who might be short the stock or, you know, might be looking at it and thinking, oh, you know what, it was really high up, it's pre-revenue, like I'm not going to touch it. Like that's their lost opportunity. Like for you understanding that, hey, there's some of the parts story here. The spectrum value is $15 billion and the stock, you know, the market capitalization of the company is $18 billion. Like What's the disconnect here? And so it's like, oh, there's an opportunity to buy it and you're buying it for $3 to $4 billion right on the cusp of this launch campaign, which we know like has usually positive momentum to it. You know, commercial service is going to be launched. You're going to be signing more M&O agreements. You know, Bell Canada is going to happen, Addis Ababa, like some of these others are going to happen. And so now's a good time. Like the market sucks, but I think it's weird. Like some people find it easier to buy a stock at $100 versus buying it at $50 after a big drawdown, right? And so, you know, try to think like a long-term investor and know what you own. And yeah, I think it's these types of corrections and pullbacks are what really determines like who The ability to generate wealth, long-term wealth versus people who get money taken away from them, who don't have the ability to, who don't have staying power. It's like when you own a stock and you don't really know much about it, like maybe you put on a speculative position. Those are situations where it's down 20 or 30%. You have no idea, like, should I buy more of this? Should I own it? Versus like AST SpaceMobile, you know what you own, you know what's coming. It's like, yeah, I'm going to buy more. Or, you know, depending on your situation, like you'll have a better sense of what you want to do, whether that's, you know, buying more or, you know, maybe you did take a speculative, you know, margin position and you want to stay in the game, but you're faced with a tough decision. It's like, you know what, I'm going to close out this margin and it's going to be painful, but I want to be able to ride this because, you know, the volatility, I don't want to be tapped out. But anyway, that's— I'm now rambling, so I'll stop there. But yeah, I hope this conversation was helpful. I know it's painful, but you know, I think long-term everything's fine. And yeah, we'll see what tomorrow brings. But anyway, I'll end it there. I'll let it run for a bit and we'll catch up again soon. Take care, everyone.
[01:11:52] Speaker B: Thanks for listening to the AST You've been 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.
[01:12:13] Speaker C: We're doing something very, very big, and I think with this technology we can really affect 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 NMO.
[01:12:53] Speaker B: Listen.
[01:12:53] Speaker A: Mmm, waffles.