AST SpaceMobile - J-LEO Confirmed, T-Mobile Next?

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[00:00:56] Speaker C: You can arrive at a one trillion dollar valuation, which equates to two thousand two hundred dollars per share. This is kind of what I thought for my extreme upside case. The probability of fifty-six sovereign satellites constellations being built is precisely zero. Okay, vive la résistance! Cannot keep Space Mob down. I'm hiding in a closet in France. I'm sure it's a violation of many rules in France to be doing podcasts on Sunday in August, but you know, I'm willing to risk arrest and guillotine to keep doing our work. And so, uh, one thing about Paris is despite all the internet telling me that Europe, um, has imploded, it's actually quite a pleasant place. So I've been working to adjust my X feed to try to filter it so that I don't have the constant psyop being committed against me and instead try to have updates about which million-dollar cars Ruff is making. Although truth be told, under no circumstance would I ever want to own something like that. I definitely have gotten more down the route of like walking and being more simple. But let's get into ASTS and apologize in advance if the connection isn't great because again, I'm in a closet in a building. that's made out of concrete where they probably did not envision the need for really good Wi-Fi connectivity in a closet. Although that just made me realize if I put the phone outside the closet, that might help me get a better signal. There we go. Tethered by my Bluetooth headphones. So anyway, now if you comment, I can't see you because my phone is outside of the closet. So we had earnings last week. And, you know, as I kind of thought about this, it's always a little bit more clear in hindsight. We always have this sort of problem where, you know, we're always hoping for some sort of big, big event. I certainly am. And frankly, when you listen to the call, we, we did have a big event. It was really exciting call. But when I kind of go back to my volatility trading days, as I've kind of alluded to over many calls and posts that my initial background in my career was as a volatility trader at, uh, the first shitco hedge fund that ever existed. And so I know quite a lot about it, yet sometimes I don't think about it enough. And so when you have this many people set up on effectively vol trades, the hangover after that is quite a big compression in vega. So the vega collapses, which then changes all the deltas of the options. And as I kind of thought about it, it just sort of creates this big mess. And I was looking at how vol was rerating at the end of the week, and it was completely crunched. Just seems like a mess. And so then that sort of clouds, from what I could tell, a lot of price discovery and certainly confuses things. And as Reformed Trader was pointing out, the stock has been trading really in these gamma bands about where the gamma kicks in for market makers based on the outstanding option positions. So there's a lot of noise and It's important to kind of separate the noise. And I always take a step back and realize, you know, as bummed out as I feel at $70, which I just take a second and I go, well, hold on. Back in 2025, remember correctly, um, when the stock first went to $70, I remember feeling like I won the lottery, and I did. Um, now, you know, there's cause for group therapy at $70. And this is a point I think I made a couple weeks ago, but the psychology of the market just never ceases to amaze me. It really does take advantage of all of the weaknesses that were somehow wired into us over millions of years. And for the life of me, I don't really understand other than humans must be wired to be in this constant dopamine hunting phase, otherwise the species won't survive. And that might be it. But, you know, I certainly feel forlorn, but then I take a step back and go, if this is like down in the dumps, and it's higher than this high I remember vividly at the end of July 2025, right before Scott whacked us with a convertible bond, then thinking I had foregone generational wealth when the stock corrected down to $37. If we're now back at $70, that's amazing. And so then we look at the earnings calls. For one, we were noticed by the Wall Street Journal. Unfortunately, Wall Street Journal chose to put a picture of Blue Origin New Glenn 3 as the COVID of the story. That's sort of an inauspicious picture for us. But you know what? From the ashes, we will rise again. And so I thought there were a lot of really incredible earnings call summaries. I was— where was I? I was in London when it hit. So I wasn't able to live tweet everything. And it was also super late at night for me. But the key points, I'll read a couple of these, is And basically they confirmed JLEO. And so it looks like that really is just going to be a billion-dollar subsidy for Japanese-flagged satellites. But then otherwise those satellites are pumping around for the rest of the constellation. So it was really neat. And I actually don't know how CFO Johnson would think about this, but when they're giving guidance on the cost per satellite, I highly doubt they're thinking about the net cost guidance net of any subsidies. That would make no sense that they would subtly layer in a definition like that. But all of a sudden, if there's this billion-dollar non-dilutive government grant going into the constellation, based on my personal current understanding of how this might work, which again could be wrong, could change, all of a sudden our actual net cost per satellite— sorry, as usual I'm sick. I did a double red-eye flight to get here, one to travel to get my daughter, which is where I did my Spaces last week, and then another to get to Europe. And With my weakened immune system, that was not a recipe for success. But anyway, that type of government credit would go to actually make our constellation a lot cheaper. And what this reminds me of is back in the early days, if you were really smart and could see the future, you would have appreciated that Tesla— there's an analog I make quite often as it relates to ASTS, notwithstanding any potential ironies people point out. Tesla initially had its sort of high-octane fuel poured on it by government grants. That's what allowed it to have its initial non-dilutive financing, which really helped accrue an enormous amount of value to shareholders. I see some parallels with how Jay Leo is structured, and I'm anxiously awaiting further details on it. So this is a deal that's waiting for definitive documentation. And could take a while based on my general understanding of how definitive documentation occurs with deals like this. But my other understanding is how things work in Japan. When something isn't announced, this is a done deal, sort of each side exchanges ceremonial samurai swords upon one's honor. And I would be astounded if something changed adversely from here on out. And so to me, this is a done deal, whether the market, the feels like it's appropriately discounted this or not, I don't know, but I certainly go to bed every night realizing that this is important. The company also announced 3 new government contract awards. So these are starting to really pile in. And again, the US government's not a charity. Trump, not a charity. And so that means that these satellites are actually demonstrating things for these contracts to start to roll in. And considering just how early we are in the constellation, The fact that these deals are coming in, $100 million plus in funded near-term value, the fact that these are already coming in to me is incredibly optimistic.
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[00:10:01] Speaker C: Prelude to what will follow. And then sure enough, Scott was very quickly talking about how these were going to scale to maybe half a billion dollars next year. Then we have Deutsche Telekom. So they've all but told us that T-Mobile is going to do a contract. And so I think that the company is trying to give you as clear a read of what's happening without being able to just say it outright. And so the signals are there. And I just again go back to, you know, how many companies do I follow at this level of detail where I don't already own a huge position? Zero. There's only so many hours in the day. And so I'm also not a pod analyst. So, you mean, just thinking about that, so let's say I were a thought analyst. Well, I hope you would all pray for me because it's a terrible lifestyle. And I'm not, thank God. That opportunity was stripped away from me at one point unceremoniously. But you'd have 40 names to cover. And so these guys are generally really sharp. I'm always really astounded at my friends who are PMs at these places, how much they're on top of things. What I don't know is their analysts. So at this point of my life, my career, my friends are PMs, not the analysts. So I actually don't know what their analysts know. But I would again be astounded if you have a coverage universe of 40 names and then there's this free revenue name in your coverage group. Because if you're a TMD analyst, you're thinking about AT&T, T-Mobile, things like that. The chance you're able to spend all this time on ASTS is really crazy. Your PM, for example, my friends who are the PMs, would never let their analysts go down the rabbit hole like this because they would say, we're never going to be able to size it. It's too early. The vol is too high, things like that. And so when you just think about the available alpha in the name, which is another theme that I've talked about, first of all, there's an incredible amount of idiosyncratic vol. So that's just a statistic. ASTAS makes its own weather more so than big mature stocks. Definitionally true. Then the availability to develop a really important view on that alpha, I think, is unmatched because of the research that Space Mob does. But also, once you learn how to read the company's own earnings calls, they literally tell you everything. They just don't come out and pump the crap out of things because they're professional. And they don't need to, but they certainly will tell you which way the puck is going. And so they're telling you that we got a deal with T-Mobile. Exciting things. Well, I don't know what the stock price announcement will be if we do get some sort of big bang announcement like we got from Verizon and AT&T, but I'd have to believe it would be pretty big. And so I anxiously await that day. We have $3.7 billion of pro forma cash giving effect to the convertible bond. $1.3 billion of backlog. So that revenue backlog is going to be a number I think people are going to start to care about right now. It's funny, I feel like I've almost been inoculated to it because it's out, because ASTS is always covered in so many controversies, most of which are false. I don't know if I ever really step back and go, holy shit, this company has a $1.3 billion revenue backlog and they just started launching satellites. That seems like a big deal to me. And so this number, I think, will start to become the number. And so as it starts really skyrocketing to many, many billions, it's going to be a good indicator of where the puck is going. And then of course, it should at some point really just convert into current year cash flow based on usage. It's not totally clear to me why we're going to have all these long-term contracts, except for the fact that A key part of the company's business model really should be capacity payments, where MNOs pay for 5, 10 years of guaranteed access, things like FirstNet as well, military contracts. But there could be a point where that number becomes less important and really subsumed just by the current earnings of the company. But in the near term, this number going up is really also showing that the customers like it and they're willing to bet big on it. $1.3 billion is a lot of money. We also have 10 launches booked. Some people are still a little bit upset about this where Scott says one every other month. It is what it is. And so these satellites will find a way to orbit and then a lot of additional capacity is coming in 2027. But I think the company is just going to do what they got to do to get these satellites in orbit. We're going to have batch 3 shipping pretty soon, and I'm excited for that. Company is saying that radar in low band is already the majority of US government revenue to date. I can't see why there's any limit to the demand for that capability. The Department of War seems to really like what they see, and government is, quote, a recurring multi-billion dollar a year opportunity starting in 2027. up to half of the target in 2027 of the $1 billion guidance. So this is a very high, high multiple revenue stream, and I think will be viewed as very validating for the company. So when people fully wake up, this is gonna start to really drive the bus. GPS is now on the mission list, and so the use cases keep expanding. Radar, communication, and now GPS. If you have been following the space mob, especially CATS-i, you would have long since known about how 5G satellite technologies have very distinct and valuable GPS applications. The company is showing incredible data rates, 100 megabits per second already demonstrated with a path to 200 megabits per second, which is something far greater than anything I had ever dialed into. The company is also rapidly expanding their factory footprint, and it's explicitly for US government scale. This is something I had remember really putting together last September. Trying to remember when I was— I remember where I was. I was walking on New Jersey Shore listening to Scott talking, I believe, at a Deutsche Bank conference. And that's when it hit me and went, whoa, they're doing this because they have a dedicated kind of Blackbird facility for the government. Now that seems to be more or less stated. So a lot of really cool things here, and Let me quickly just look at some of these other summaries that I linked. But there were some really high-quality summaries. DePaul did a great one. Yeah Dave did one. I like Yeah Dave's commentary a lot because he's a busy guy and looking all over the market, seems to be a phenomenally successful investor, far, far more successful than I am based on the metric that matters, which is returns. And so I really like to read, read his things very carefully. Also knowing that ASTS has to compete for his time because of all the different things he looks at. And so we made the point that each, each line in this transcript effectively is confirming a big deal to him when taken as a total picture. And so really cool here because it's really an annotated transcript for him, but he points out the things that we've always talked about a lot, like the ASIC chip, So that's coming. But the thing that seems that really caught his attention was the applicability of IoT. And so expanding far beyond the simple elevator pitch we talk about in terms of dead spots and things like that. But then he goes to what we'll talk about in a second, which is the space-based AI edge compute. I thought this would have gotten more attention, but I get how AI right now is a little bit in the healing process. But the company is now taking this beyond the hypothetical to telling us exactly when this is going to enter the product roadmap. And this is something I had been anxiously awaiting. I am a good guesser, and so knew that Abel would think about this opportunity because Abel is an aggressive founder. The question is, when would the general public get the big reveal on the product roadmap? And I was expecting something that's going to be much more of sort of a PowerPoint AI opportunity, sort of like, hey, these are things we might do in the future. What we got was far more than that. It's here is what we will do and here is when it will start and boom. And the background is we have all the patent data to know how they're really thinking about it. But he really says what we've said for quite a long time is that when you think about the key innovations of ASTS, it's really not connecting the unconnected. It's not that front hall part of the satellite that has the RF. RF antennas. It's actually on the dark side of the moon. It's the solar panel configuration. It is the ability to have the most power in orbit. And so if you think of ASTS as some people who invented Iceland, so you invent Iceland, what do you have? A lot of geothermal energy and some wonderful people, although I do not recommend walking around Reykjavik at 2 in the morning because it turns out Vikings beat the shit out of each other. when they drink too much. But other than that, Iceland is an incredible place and blessed with incredible amount of power. And so if you had created Iceland, first of all, congratulations, you're God. But then second of all, you'd say, what am I going to do with it? And so you call Alcoa, easy to find in a phone book because it starts with A. And you say, hi, Alcoa, could you put an aluminum smelter on my island? And they would go, sure, you have cheap electricity. Then you become involved in Bitcoin farming. You basically do anything that has the highest and best use to monetize your power resource. ASTS has what we believe to be the low-cost power resource because it has the most efficient use of phased array space within a fairing. And so in terms of solar energy to fairing volume, my belief— I actually haven't done this exact math, but you can kind of just see it very clearly that is the case, is the most efficient at putting a solar array in space that has the thermal dissipation properties to then do all the other things on the other side. But initially, that is RF communications. Telecom has always been where the big money is in space, and sure enough, that's what we think is true as well. But then with the other things you can do in space, like compute, that all relies and in fact has a critical path being power. So we're now at the moment of truth where this is no longer Cathie speculating on things and Ant-Man doing random, you know, Wednesday afternoon Spaces that I miss every time. This is now on an earnings call, and it just happened to be in the middle of August after the market is triaging the destruction of Momo in July. And I think was largely just something people went, not going to deal with it now. Let's just figure out some other key milestones in the interim. But this seed has been planted, and this seed will at some point be very, very relevant. So I look forward to seeing this flower flourish, but it also to me shifts what my ultimate upside is. And so where 3 years ago, I remember when the stock was $2, I remember telling Ant-Pan Man, this thing's going to go to at least $20. Here's why. And then there's obviously all this upside beyond that. I thought it could go to $500, things like that. But you could really clearly see these paths. And then we got Verizon and you go, oh wow, so we just got instead of 30% of the US market, we got 60%. That shifts my goalposts. It's not like I'm a goalpost shifter randomly. It's because the goalposts actually shifted. And so now we are going to get T-Mobile. That shifts my goalposts even yet further. Good things get better. And now we have a lot to learn about the AI edge compute modernization potential. What it's not is it's not going to be powering OpenAI for you to query, how do I say I want coffee in French? It's going to be used more likely than not for very sensitive military applications. and compute that is staying in space. And so that's something I think is lost on most people when they sort of dismiss AI space compute, is they fail to recognize this is about market segmentation. Not all compute has the same use cases. Not all compute has the same value. And so this is going to be of one of the tiniest, tiniest, tiniest slivers of the overall AI compute market. that is going to be isolated at the absolute highest value uses for it, which can add up to be quite a lot of money. And so take another analog. As someone who really loves Porsches for reasons that probably started at birth, I was seeing the rumors of Porsche potentially trying to buy Ruff or trying to buy Singer. And so if I were on the board of Porsche, which they should invite me to, So that's my open invitation. I should not be on the board of ASTS, but I should be on the board of Porsche. I would say, you guys, we have to buy RUF. This is our AMG. We have to buy— this is our Alpina. For Volkswagen, this is our Bugatti. This is important because this allows us to capture this extreme slice of the high end of the market. It overall elevates our brand. This is a good idea. And so to have a, a rough, you make it a little bit more mainstream to have one of these in a showroom for people to gawk at. And, you know, screw your GT3 RS that looks like a cartoon. You're going to have one of these things. It's going to elevate the brand and your ASP is going to be, you know, $2 million a car with insane margins. So even though you're only going to sell 100 cars, it's going to be very, very valuable. That's the same analog for ASTS's AI compute. It's the rough CTR that elevates the brand, but here it's really not about elevating the brand, it's just simply about driving monetization potential against each satellite. So the beautiful roadmap was revealed on a slide, and it's non-comms, radar, secure government communications, funded networks, IoT, AIH compute, and federal emergency services. We have the roadmap. It's almost like ASTS has listened to these calls and my pleadings as a VC to say, we as a community of VCs want to know your product roadmap. This is how we evaluate our founders. We know you have it, show it to us. And they did. And at some point, as they execute against this, the market will start to really get excited by it. And again, on the earnings call, Other things to be excited about. T-Mobile is coming, and so let's again just check in with Rocket Tank One Two Three. Let's see what he said. I go to these tweets, and so not only did they say it on the earnings call, but the FCC has granted ASTS and STA to test on the spectrum that was sold by T-Mobile to Grain Management. But what we found out, which is really great research by these people, is that it must comply. With quote an existing agreement between ASTS and T-Mobile. This is where you kind of do the scratchy record noise. It's like what? And so all testing must comply with all existing agreements between AST Space Mobile and T-Mobile USA. And as Anpanman says, this is strong evidence that ASTS and T-Mobile have already a direct contractual technical relationship around the spectrum. The timing lines up, and now we have Deutsche Telekom. confirmed with ASTS. Just like we really nailed the Jay Liao tightening of the uncertainty bands, and we're ultimately right because now it's disclosed, this is another example where I think the space mob has totally nailed it. And I think that it's going to become announceably clear very soon. But in the near term, the thing that's ultimately going to drive the stock most reliably is just simply the completion of satellites. And so we got the update that batch 3 is getting ready to ship very soon. So that could be as soon as next week, actually, now that I look at my calendar. And then BB-17 through 46 are in various stages of production. So we're about to really have a swarm of bluebirds, which is supposed to be funny because Starlink's D2C technology was based on the acquisition of Swarm. So that's a lame pun, um, so I had to do it. And the other thing we got— and let's just check in with one more Smith here— is the burgeoning government opportunity. And so this is again just reemphasizing the quote about the radar opportunity. And so we already covered this, but the company's saying that this could be a Multi-billion-dollar-a-year opportunity. Multi-billion-dollar opportunity from non-communication US government use case. What's that worth? So that's what gets really exciting to me is depending on where the multiple of the stock trades, let's just say 5 times, for example, which would seem pretty low to me, that's $10 billion of value from that opportunity right there. Say it trades at 10 times on $2 billion. There's $20 billion of value. You see quickly how this gets so exciting on the revenue ramp, and because the revenue is likely going to have a hockey stick, the trading multiple, at least in the early growth days, should be really crazy. So that's what sets up to the Nvidia-type stock price rerating that Nvidia was able to experience a couple years back, and that's what I'm hopeful we have yet to experience. And so anyone looks at the stock price of ASTS and goes, I missed it— well, the reason why I own more shares than I ever have is because I don't think we've missed it. I think it's actually still ahead of us. I could be wrong, but that's the bet I'm making. And so then looking further at some of the updates from the weekly, more of the details on the Jay Leo deals, really exciting. And then we had kind of a weird update from Fairwinds, they've finally branded their collaboration with ASTS and it's called AetherLink, which is just an atrocious name. But AetherLink is the global 5G and next non-terrestrial network service for mission control defense communications. So it's getting more formal for reasons that aren't totally clear to me, but formalization Probably means that it's closer to being in market, which is good. But let's go back to the things that are really exciting, which goes back to this AI capabilities. And so starting with Bluebird 47, we see the beginning of what is our future. And so Interalia 51 and Alex from Babylon did some nice posts on this. Let me just first check in with Interalia. So here, and Ralia points out that, uh, there— these patents were dated back in June 2021 about how the Micron can be used for data centers in space. And so that really blows my mind. I'd love to get inside the headspace of ASTS engineers to know exactly how they had seen this opportunity and really how clearly they had seen this opportunity. Or if they were just smart enough to know how to retain optionality. It's a big mystery to me, but it really just speaks to another hint at how forward-thinking this management team is, which is a very important thing for me to monitor and study. It's one thing to be a really good widget maker, and all of a sudden your widget is useful. It's another thing to be a true technologist, And define the market you will operate in, but then be so many steps ahead, you're defining markets that people hadn't even thought could exist. And so with Abel, what's so fascinating is the D2C market was thought— not thought to be a market that could exist. He literally invented it. And here we are. Looks like world domination. I know the SpaceX bros will not concede that point. just yet. But then we see how far ahead they were on satellite radar, DNT, and now data centers in space. Who are we dealing with here is my question. It's an exciting thing to think about. And again, one that puts you in the mind of a VC. Usually, you're dealing with people that just spew bullshit about big visions about how they're going to, quote unquote, create an empire, but have literally nothing to back it up except a bunch of Facebook spend where they're buying customers at increasingly uneconomic paybacks. That's usually what you get. We have something entirely different here, and I still haven't been able to fully put my finger on it in terms of just how deep that well is. And it's— you don't need to really know right now, but again, it goes to where these goalposts could end up going over time. And so let me read you something about This AI stuff. So all these opportunities are basically on the back of the architecture we have, which is basically fundamentally the largest capacity to generate power in space and the largest gain antenna gain for a spacecraft. We are piggybacking on the space architecture we have and also on the gateway architecture we have. Ah, another hint from Abel. So he's getting all the MNOs to build out all these gateways around the world, and now they can be used not only for communications but for AI compute. Now, don't you think a world that's increasingly going to an AI sovereignty model is going to care a lot about that? I do. I was having coffee with a friend in London who's a software guy, and he made the point, he's like, do you think there's any reason why Mistral gets any money in France? Why in the world would anyone fund an a European AI company, all else equal, when you could fund Anthropic or OpenAI or Google? They just— there's no reason. The US companies are so far ahead. The reason you do it is because these countries cannot just concede everything to the US. You have to have a plan A because you cannot rely on the kindness of strangers. I say this as an American, so I think I'm a very kind stranger, but I'm a stranger nonetheless. And these countries get it. And so you see how the sovereignty-first infrastructure we have for communications, which is clearly getting traction— JLEO being one recent example, European Satellite Connect being another— well, this is going to extend right into AI compute for these sensitive issues, which are likely going to be military in nature. Do you see a trend? And so then Abel goes on to continue that From satellites 47 onward, they're adding compute capability to these satellites. It'll be integrated into the system. So these are all just incremental opportunities. Again, this moves the goalposts in our favor in exciting ways. And we still haven't given up on FirstNet. So FirstNet has a board meeting. Who cares at this point? FirstNet's going to happen when FirstNet happens. I really don't think, never thought— allowed for the possibility but never sponsored the idea that there was going to be a big FirstNet announcement per se. I think we've gotten our FirstNet announcement. We have their spectrum. We are going to have a deal with them. They're going to be a channel partner for us and sell their service to their users. I personally think that that is it. And maybe we get a capacity payment, which would make sense, but I don't know that. And I don't know why there's a rush on that. But that notwithstanding, FirstNet has given us enough details of CapEx authorizations and investing in satellite capacity and things like that to certainly lead reasonable people to a conclusion that there could be somewhat of a sensational FirstNet contract at some point, but it'll happen when it happens. But what could happen when what happens is a rhetorical question that should be asked by deep philosophers. And so you might ask, who is Ozzie and why do I care? Well, Ozzie Ramos just joined AST SpaceMobile. Normally you'd just say great, but here what's interesting is this guy was the vice chairman of UBS, before that vice chairman at Barclays, and Like all good bankers, one time had graced the halls of Lehman Brothers until— wait for it— September 2008. So we know why he left Lehman and then was immediately transferred over to Barclays, fighting the good fight. He's been a very successful person. And so for being the vice chair of investment banking for UBS and Barclays and being the head of communications of Cavill and Satellite, What does this mean? So in my limited experience on this world, getting a person like this as an advisor is something I've done. And so I've tried and actually had been successful at recruiting people of this stature and higher to be advisors on one particular instance, a board I was on, and it was for a very simple reason. this individual could get it done. And so on one separate company where I had an issue, he could literally walk into Chancellor of the Exchequer in London and he could get the attention of 10 Downing Street and get us what we needed from regulators. And so he was known, he was powerful, he was respected, and a trusted broker And could help companies accomplish what they needed to do, because you can't just go call anyone in this world without a warm introduction. And so this person seems like a warm introducer, strategic advisor. So what does this person not sound like? This person does not sound like someone that's running the spreadsheet. This does not sound like a CFO. He's not a CFO. This is not a VP of finance. This is someone who picks up a phone to people Abel wants or needs to talk to, to get very important high-level things done. And so what could these very important high-level things be? Well, I have very specific guesses of what they're going to be, but an open spaces on the internet is not where I'm going to share my guesses on this particular issue. And so we'll see. But this is a big, a big-time addition, and it's a door opener. And this is how the world works in my experience. I've tried to get people like this because they help, and we got one at a very, very, very interesting point in time for the company. And I'm anxiously awaiting to see if my guesses are correct. Some other guesses. that I hope are correct is the one from Wave 3 Trades. And so he put out this kind of cool analysis, just showed that for whatever reason, 4 out of the last 5 earnings calls, ASTS stock kind of dips and then goes straight to all-time highs. And it's usually after the company quote unquote misses, which are kind of useless because earnings don't matter yet. But what's kind of interesting, this kind of goes— got me thinking about what I started the call off with in terms of how the vol crush kind of kills us after each earnings call. It's going to kill us till it doesn't one of these times. Like, at some point there's going to be an earnings call where there's going to be some big news announced, and all the people that ripped calls are going to make a lifetime of earnings. And so they'll bleed premium until they don't. But I think that's what causes this dip every time, is you have this just kind of hangover from theta decay, and then the world seems to absorb what's happening. A, I think you clear the decks on anyone worried about bad news or delays, and then people realize like, oh my God, the window of big things happening is 3 to 6 months out, and people pile in and momentum creates momentum. That's what I think is a good explanation for this pattern, but it's a pattern nonetheless. And we also had a lot of sell-side support come in. I'm not going to read all these, actually looking forward to going to bed. But we did have a cool tweet by a guy I respect a lot, PennyCheck, and he pointed out that if you count all the sovereign satellite deals that are being sort of pushed in ideas, we're right now at 56 deals and the cadence is still accelerating. And so there's a wave coming from countries racing to build sovereign satellite constellations and cut the cord on US dependency. So this is a very important tweet, but then you must realize—
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[00:41:25] Speaker C: The probability of 56 sovereign satellite constellations being built is precisely zero. That's one instance where I will say that there is no tail scenario where that happens. It's just not, not feasible by any stretch of the imagination. And so what is likely to happen is all these countries have woken up. The first phase is to realize you have a problem and then you do something silly pretending you can solve it yourself. Then you get paralyzed, then you find an expedient solution to actually get it done. That solution is AST SpaceMobile and reinforced by what they have done with Vodafone in Europe. And so as Quilty says, Quilty, Chris Quilty is a legit space analyst, very trusted advisor. the companies. I've personally spoken to him before, and he has no axe to grind with any of these companies, to my knowledge. And he says the AST SpaceMobile Vodafone venture is, quote, the one challenger with a credible shot at the EU priority lane for spectrum, which basically means it's viewed as domestic by the EU or qualifying by the ownership rules so that it gets to jump ahead of other companies in the race for this 2 GHz spectrum. But the broader point is that ASTS was built for sovereignty. It was built to solve this issue that all these countries are now scrambling to solve. It's uneconomic for these countries to solve this problem by themselves. It just doesn't make any sense. And so being able to buy into a constellation where part of that constellation can have your sovereign flag on it, just like JLEO just showed where there's going to be Japanese-flagged satellites, this is the way. And we're having early signs that this is happening. And so the implication of this, just making up loose, loose, loose, loose, loose numbers, is you could see each of these countries going, I'm happy to be able to put a billion-dollar subsidy into this constellation so that 20 or whatever number of these satellites have my sovereign flag on them, my kill button switch when they're over my domain. And then I can call it my own, solve my problem, have control, but not have to deal with my own constellation. And then you add that up. Well, it's a lot of money. I don't know that each one's going to be a billion dollars. Japan is a really, really big country in the grand scheme of things, but you can see how this can quickly add up to many, many, many billions of dollars on the sovereign angle. That's some exciting TAM. And then the TAM continues each day to get more and more convincing on the cam outside of people market. And so Verizon is testing drone technologies and partners with satellite communications company AST SpaceMobile. And so Verizon is, for example, teaming up with NVIDIA and Lockheed Martin to turn 5G into a drone tracking system. This again is what we were talking about, where drones are going to be a big market and require positive control. Positive control means you have to be able to have connection to it all of the time, and you can't do that with a terrestrial network, and they're going to require a backup system. Enter ASTA. So we also have, you know, more updates out of Blue Origin each week. They're really making some fast progress on getting Blue Origin back into the skies. It seems like only yesterday when New Glenn 4 exploded on the pad, and look at how far we've come. We're going to blink And before you know it, the countdown will be on to New Glenn back at the pad again. Meanwhile, China is showing that this is hard. There's a video of a Chinese rocket not making it. And the last thing we'll just end on is a tweet by Dr. Ollie, another account I greatly respect, someone who's been in the trenches with us for years now. And just always a really nice reminder for all of us to use spellcheck because at the end he goes, know what you own. and misspelled own, which is my trademark phrase. So I will be suing him for desecrating my statement and his reminder to use spell check when you're making influential tweets. But there's another reminder in this tweet with a catastrophic spelling mistake, which is the math. And so Elon, as he points out, talks about a future where communications becomes a $1 trillion a year business because of AI, robotics, and connected devices that consume an order of magnitude more data than humans. And so Dr. Ali points out that if you do some simple math on this, you can arrive at a $1 trillion valuation, which equates to $2,200 per share. This is kind of what I thought for my extreme upside case. And I want to caveat that I'm adding that adjective extreme upside case so that everyone knows this isn't sort of like my base case. This isn't something I expect to happen tomorrow, but it is one of those things on the range of distributions that I think is possible, and the directionality toward it seems imminently probable. And so anyway, it's just good to kind of know what the distribution looks like. It'd be something I'd always really value if I had a high signal source of analysis on which stocks have sort of this big fat right tail distribution. I would really love it because what I'm always looking for is the elevator pitch on a stock so I can sort of to really get the vision and have something to work toward and understand. And so, for example, I really kind of squinted to try to understand things like Joby. I squinted to try to understand things like Merlin. I've squinted to think about, uh, things like Quantum. I just have— I've had a very hard time with those, really seeing how those business models are going to work consistent with how my feeble little brain works. And so I don't have positions in them other than some Quantum stuff where I'm going to be doing a lot more work. as I really thought about the evolution of these technology cycles, but ASTS is one where, because of the simplicity and the mechanical scaling of the business, I was able to really quickly understand that fat right-tail distribution. It doesn't mean there aren't a lot of other stocks that don't have that, but being able to see that clearly just so you have a testable hypothesis, is useful for me. So anyway, that's why I passed that on. So that concludes my Spaces in Exile from a closet. And next week I'll have Spaces back from Cook headquarters back at the usual time. And so appreciate everyone joining. And I hope everyone has a wonderful next week.
[00:48:20] Speaker A: Bye.
[00:48:21] Speaker C: Thanks for listening to the AST SpaceMobile Podcast. If you enjoyed this episode and you'd like to help support the podcast, please share it with others, post about it on social media, or leave a rating and review. To catch all the latest news about AST SpaceMobile, make sure to subscribe. Thanks again, and I'll see you next time.
[00:48:46] Speaker A: Listen.
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