Kook's Weekly - May 3 - Uncorking the AST SpaceMobile Production Line

[00:00:06] Speaker A: This is the AST SpaceMobile Podcast.
[00:00:09] Speaker B: It will just basically come to your phone and be seamless regardless of where you are. We don't want the user even to know that it's connected by satellite. Listen, the opportunity that we have is very, very, very large.
[00:00:27] Speaker C: Good evening, everyone. Thanks for joining. This time I can actually see people joined, and I'm just trying to fix my microphone. It's a little off. So shocking to see people still joining after all the people on the internet saying that Anpanman, myself, and Katzy are scammers, pumpers, and retail predators. So, you know, with that as a preface, anything you read on the internet, assume it's true. And then, you know, let the people who are sharing their diligence, their opinions, their research, you know, fight for themselves. And so I know, you know, it kind of blows my mind at this point for someone who's been sharing all of their research, which I believe all of my stuff is cited. I get that I'm a little bit of a cartoon. Certainly a little bit loose on my shitposts and things like that, but I think a lot of you know me at that point and you can see my research and the grind I've really kind of undertaken for the past 5 years along with Katzi and Panman, and then other people obviously like Tanner and Kevin and a lot of people on this phone. And so what always makes me wonder, why the vitriol toward this? why don't these bears and shorts sort of just do their thing, leave it alone? Like, why is there such catnip to this name? And it really reminds me a lot of how Tesla evolved. There was just this hatred and this desire to see this really deterministic entrepreneur fail in Elon Musk. And there's just something about it. People really don't like these sort of visionary founders and I'm trying to think of an exception where that visionary founder actually really failed, because they'll point to the Trevors of the world, but there was never any substance to that. You never really had the bona fide validation. Now the bears will say Nikola had GM validating it, but we all kind of know that was bullshit research. GM just didn't do any. And we know, and it's verifiable that The many, many partners, not just one, of AST SpaceMobile have done an incredible amount of work. We don't have to take their word on it. We can see it all in the testing and the third-party validation and things like that. So I find it remarkable, and it really comes out in force when the stock is crappy. Last week was really hard. I certainly take a toll. Unlike a proper pumper, what I don't do is be like, buy the dip, guys, it's going to be okay. I have real of gallows humor. It's just the way I'm wired. I think it really drives Anpanman crazy. He's usually like, kook, your dark humor is scaring people. And I'm like, bro, it's who I am. There's darkness in my heart. And Anpanman can be the happy baker or whatever. That's his persona. It's actually how he is as a person. He's a very pleasant, nice individual. I'm a little bit more of a Gloom, doom, gallow, the world is falling. I like to embrace the darkness. And so when the stock is trading terribly, I don't fight it. I let it enter my soul and course through my body like a virus waiting for my immune response to trap that virus and kill it brutally and totally. And so last week was one of those days where I just let my emotional gate open and let it come in. And it sucked. Last week sucked. You can see the burnout, you can see everyone fighting and crashing out. And usually that happens at times at the bottom. So this decline has been somewhat vexing, but kind of actually on schedule. In my experience with ASTS, we'll have these awesome runs up to $130, high five. You know, I'm like, Tanner, bro, why don't you like move in, man? We'll start a fraternity. And that's always the top. And, you know, classic, that's what happened. And then you get the decline and then usually it's like, okay, this is going to be short because look at all these events. And that's when bottoms don't form because there's still hope. And then we have all the TA guys come all of a sudden. I'm like, please, Reform Trader, show me the way. And unfortunately, like all of his triangles, there's always a story and he's always the first to admit these stories can change. And he's looking for narratives that then take hold. He's not predicting the future and he never is saying he is. He's looking for probabilities around risk-return. And then you can see how it shifts. And I find the TA so interesting because it really shows the collapse of the human spirit at various levels. And, you know, when the weakest new people sort of fold and capitulate, and really like, where does a stock have to go for people who don't know it well and don't own it to step in. And one thing I've always found in my career that has been the spear that has sliced my heart is I generally know more about an investment than anyone else. And in this instance, anyone else is like, with the exclusion of Cathie Wood, Anpanman, Tanner, Kevin Chen, there's like, okay, there's a couple people that know better than I do, but by and large, I, I probably know it more than anyone else. And so as a result, I have the most confidence. And guess what happens when you have the most confidence? My discount rate is the lowest. I'm willing to price it the highest because I hold it when it goes up. And then what happens when the stock goes down? Guess who does not have buying capacity?
[00:06:03] Speaker B: Me.
[00:06:04] Speaker C: You know, we're not all Anpanman who can like buy the dip with his royalty streams from selling like assorted consumer goods. All across Asia. You know, I don't have that sort of backstop in life, so I just eat it. And that's what happens generally in the market, is the people who know it the best already own it, and so they don't provide any buying support. It has to reprice so that, you know, people who are generalists can go like, I get it, I, I don't have this knowledge, I don't really understand non-communication use cases, I don't really understand L-band, like Da da da da da. But I do generally understand this NAV framework, and so I can see a floor. You know, I not me, but this hypothetical buyer that steps in, I can see how there's downside support at call it fifty bucks. You know, whatever. And that's where then you start to have this support, and it's this tiered level of buyer graded by people who are the most bullish, who know it the best. and then the people who are the least bullish know it the least and use a different valuation regime at various points, that's who's going to set the price. And I've seen this throughout my career. This narrative works really well on stylized examples like oil and gas, where you'll have things like 1P reserves versus 3P reserves. And so using that as an analogy, it actually makes a lot of sense. It's like, okay, what's the hard NAV here? That's where the conservative distressed guy just steps in and goes, I own it here. And then the person that really knows the, you know, the geology, etc., is like, well, I'm going to give these like 3P reserves value because I actually really have a view. Well, they're the ones that will own the stock at the highest price, and it doesn't mean they're the dummy because if they're right, the stock might go up a ton. The distressed guy never bought it because it never got to his clearing price for entry. And so there's no right or wrong answer here, but it's very useful to understand sort of the path dependency of where these levels come into play. And this past week, we've really had a lot of despair. And again, like I said, and now I can see Anpanman join. Um, while Anpanman was away, I was, you know, just to remind him, especially when he's on mute and can't respond, I was just saying how he's usually like, you know, kook, your dark sense of humor, you know, scares people and things like that. And I just, again, I just try to embrace it. Anyone, you know, everyone should know me at this point where when I'm posting like all caps, like there is no floor, You can go six feet under in like pictures of like screaming cats. I'm usually laughing my ass off when I post those things right about you know right before I go jump in and surf and like leave everyone to ponder those posts. So don't freak out when you see that. That's actually when I'm like the most bullish because I'm just screwing with myself. And anyway, so let's get to the let's get to the facts of the matter, which really is people should realize that I'm a total wingnut. Nutjob, unstable person who channels all of his frustrations in life through researching one stock and one stock only. And so know your sources, do your own work. And, you know, all these people are calling me a retail scammer. Again, I have no idea. I'm not a retail scammer. So that's my, also my comment is I am not a retail scammer. So I hope that allays everyone's fears. But next week, not this week, but the next coming week, we have ASTS earnings. This is going to be a very interesting call. So on one hand, they're going to have to talk about what we already know, which is the failure of BB7 to make orbit, and, you know, past tense. So what everyone is focused on is batch shipment number 1, and really what that means in terms of, you know, what I call 3 till infinity. So yes, I have the meme all prepped for people that Go back to early 1990s rap. 3 to infinity is my theme of what's about to happen. Once we have the next batch of 3 satellites, they will presumably have uncorked and debottlenecked the entire production line. And so it really is 3 till infinity. And I believe that on the earnings call, we're going to have, if not shipment already, but very high visibility toward the next shipment. which might not be enough for some people, but I believe for a lot of us who are long-term investors is going to be quite enlightening. And then we could very easily have some developments around some military contracts and things like this. So it's going to be an important earnings call and really set the tone because it's going to define the timeliness of this investment into the back half of the year. And so if they can convince people that they've really uncorked The production bottlenecks, which I think I personally have a pretty good handle of. And it's one of those things where it can certainly seem darkest before dawn. Many people can confuse darkest before pitch-black death, end of the world. That's what is fun about markets is, you know, the same information can lead people to believe that the patient has in fact died. I think that this earnings call is going to be one of those awakenings and could set The fever for people realizing that this is a second half of 2026 gangbuster investment. And what is going to really help too is any increased visibility the company can provide around monetization, because now the bears are back out of like, oh yeah, of course the tech works. Wait, what? And oh yeah, I guess they'll be able to build all these satellites even though they still like to rain on that parade. But now we're kind of back to, you know, there's no market. And, you know, it's just, it's interesting to see the bear narrative change, which is fine. They're entitled to it. I could care less, but it is interesting to track. And so into this earnings call, let's review what our bakery correspondent reporting live from his high-carb lifestyle shows that we have in terms of a setup. We have all-time high short interest. We have acutely negative investor sentiment. So yours truly has certainly crashed out, like angry, want to go break stuff. Having my kids tell me that I rage bait them, which I don't think my kids actually know what rage bait means, but that's what they said. They're like, Daddy, you rage bait because the stock went down. Like, okay, wake-up call, probably should. Get more balanced life. But then we see the implied and realized volatility near their lows, you know, about to have an explosion. And then we have the big upside catalyst to come. And then a lot of us, as you might not be surprised, are tracking very, very carefully all sorts of little, uh, tea leaves that, that make us believe that a lot of things are going really right. So we have a really great setup, which is nice. The company has to deliver. And almost sort of like you need, you know, that invisible hand to come down from heaven and guide you toward the light, AT&T pops up and, you know, gives us a little bit of love on X, which is interesting because just the other day we, or actually last week, we had that conversation about analyzing John Stankey's comments from the earnings call where despite him saying, oh, we have all these options and we're going to partner with, you know, SpaceX and Amazon, What he really said is we cannot let ASTS fail because we depend massively on them, and we have no idea when these other services will actually be available. And so the forensic analysis of what Stanky said was incredibly positive. And anyone that you know is wondering about that, go back to last week's weekly where I've documented all this. And so sure enough, AT&T is out kind of pumping, letting us know. Um, that, you know, they still love us. And what I think is also useful is, remember, we're not in a political debate where there's like little gotcha moments. Like, this is not fake life where you're trying to impress a CNN anchor about something ridiculous. This is real life where you're trying to either create value or die. And it's binary in the ultimate outcome of like, you have done it or you have not done it. And the experts will like to measure all these goalposts on a relative, like what they said and what they did, but failing to recognize that the movement of a company toward domination is very hard to do. And so when you look at, there's this guy, I think he's, I don't know, some language I can't say, but his username is @StefanPoo13. And he's from some country that uses Cyrillic. I can't remember what you'd call that alphabet, but non-Roman alphabet. And he goes, the problem is this company grew the valuation by setting unrealistic expectations, not by delivering what they guided for. Well, he's got this totally wrong when it comes to the primary act of like making money. And so I view myself again as a shadow board member. I view myself as running my own family office, thinking like an industrialist. You know, hidden from view, but trying to control the world through my investments, trying to kind of be Iron Man, honestly, in my spare time. And so when I think about this, sure, I could get wrapped up in like what guidance was and the fact that they annoyingly miss it almost for sport at this point. But then I step back and go, what is it I am trying to achieve as Iron Man? I am trying to have ASTS win. And so initially the experts said the satellites would not work at all. They would get no contracts. The FCC would not approve them. They could not hire. No one would launch them. There is no spectrum. There is no government business and a whole host of other things. And so then what have they done? The satellites work. They have almost all the MNOs. They have FCC writing the rules for them. They've recruited Global talent. They have launch contracts galore. They own their own spectrum in the most valuable market in the world. They are part of Golden Dome, in addition to 10 other programs. And there's a lot of other things they've done, like set up a European subsidiary. God knows how many other things they've done that haven't been thought about. And so again, expectations are relative. The market ultimately sets expectations based on the price of the stock. When the stock was $2, the market expectation was this company goes bankrupt. So they have exceeded the market's expectation at $2. The market's expectation at $20 was they might not go bankrupt and they might muddle along, and maybe there's some strategic value to this company, but we have no idea if they can actually deliver anything. The company has exceeded that expectation as well. And so first, for, for those of you that are not professional investors, it's very easy to get influenced by others And to really be infected by this line of thinking of like, well, they missed their guidance. Tesla has missed their guidance. Lots of companies have missed their guidance. The question is, did they miss their guidance because they were a mature industry leader and they're missing guidance like revenue because of competitive onslaught? That's a problem. And so when like Chegg started to miss guidance because ChatGPT was invented, you have a problem. When Tesla missed guidance because they were revolutionizing the entire concept of what transportation was by commercializing and building the first scale electric vehicles that people wanted to buy in the world, that's a different type of missing guidance. When SpaceX is unable to hit a launch target for Starship, that's a different type of miss. That's an innovation miss versus pressure from competition miss. And so when I look at this, the whining and crying and moaning and groaning on ASTA missing guidance is not the same thing as Blockbuster missing guidance. Because Netflix is destroying their entire foundation of being is not the same. And people can do whatever they want, uh, surely. But what I really want to make sure people at least think about is making sure you're contextualizing a disruptive guidance miss because a business is about to suffer versus a guidance miss because a company is embarking on making the impossible possible? If the latter and they succeed, you're going to be okay even if they miss some guidance, because what it means is that everyone else that's going to try to copy them is really far behind and they will probably also miss whatever timing. And we're already seeing that with Starlink. Their service sucks and who knows when it will not suck. And Kuiper has had all sorts of problems and they're really far behind. So it's really important to contextualize this. And then the goalposts are being shifted by the FUDsters all the time. And so what I wrote in the tweet is the world previously thought ASTS was, you know, 4th down and like a million yards, basically impossible. And it's just not the same when looking at the nature of what they're trying to achieve, the difficulty. in the immateriality of missing guidance versus getting it right and solving the natural challenges you have of doing something no one's ever done before. So that's an important point. Then let's go check in with CATSI. And so there were some interesting developments around spectrum. I actually meant to look into this a little bit more. Um, I chose to screw around on a 6-foot-4 surfboard instead, which was a way better use of my time. I can catch up on the spectrum stuff, uh, tomorrow. But point is, the company is using all sorts of techniques to massively increase the capacity of their spectrum. What's really neat about this stuff is using different waveforms on the same spectrum, so those waveforms aren't going to interfere. So you can kind of shoot wave A and shoot wave B on the same spectrum and achieve different things like Radar versus communications, and so that obviously provides an incredible opportunity for monetization of of the company. And these are all sort of the exciting things. And when Katzy brought these things up three years ago, to say he was laughed out of the room is an understatement. And again, that's where people like Tim Farrar went truly batshit and would say some of the most vile things possible to Katzy, which is just again remarkable if you know the guy at all. He's just like a really nice guy. And to accuse this guy of some of the things that Tim Ferriss accused Cathie Wood of being is just simply like spitting derogatory words at Mother Teresa. And then it turns out Cathie's right. And the joke we have of Cathie's right about everything, guy's kind of been right about everything. And it's not because he was guessing. He saw it in the documents and he put one and one together. And so the company, despite some of their efforts to hide some of these things for competitive reasons, would give just enough little clues. And Katzy would bury himself in these FCC filings and ITU filings. And he's a very inquisitive guy with evidently a very technical background, but certainly a capacity to learn. really unlike anyone else I personally know. And he used that to figure some things out, and he was very generous to share it all with us. And lo and behold, he's right. And so it is useful to go back. And, and for— I know for AntPam and I, we're always just sort of amazed because we were the guys that had to kind of listen to this guy, you know, 3 or 4 years ago when Space Mob was like 6 people. And, you know, we didn't really want to be dismissive of him, but at some level we're like, are we really on this conference call with this guy? And it's like, the stock's at 2 Bro, like no one gives a shit about your radar theory. Like we just like can't go bankrupt, and you know. But we entertain him because we're nice guys too.
[00:22:27] Speaker B: M.K.
[00:22:27] Speaker C: Man and I both are generally not. We're not gonna be like, "Yo, you're wasting our time." And we're really glad we listened to him because it gave us incredible amount of confidence about all sorts of other things and made us sort of believers. But it is you know worth calling balls and strikes. And so now we're seeing a lot of these things come out into the open, and it's. Remarkable. So now let's get to the AST proxy statement. And so look, people call us paid pumpers. I would just like to point out the company doesn't even pay its executives, so they really don't have a paid pumper budget. They give us XL-sized t-shirts which don't fit me because I am a solid medium. So even the consideration in which they give their paid pumpers Some swag, like I can't even wear it. So I would you know put that in the proxy. You know, gave Cook an XL t-shirt and he wants a medium, and that's my bonus for fifteen thousand tweets. Say that's a bum deal, but it's a better deal than a bell got because a bell got zero. And it's really useful to appreciate that again we have an owner operator. He is he finally got a stock award, which is. I'm sure forced upon him. But then the other executives. And so a guy like Scott made $250,000 base. So sure, you know, better than working at McDonald's, but he's also, you know, senior managing director level at, you know, any global investment bank. Shanti Gupta, partner-level guy at any Big 3 accounting firm. In fact, that's what he was. Those guys make a couple million bucks a year. God only knows what Dr. Yao could make, like what his value at market is. It's probably a lot. And so these guys really make all of their compensation in stock. They are bullish, and they're not just blowing out of all their stock when they get it. They're taking, you know, relatively modest prints to get some liquidity for their families to pay for stuff like schools, trips, um, probably healthcare because they're probably working their ass off and, you know, need to get their Prenovo exams. And so it's good to see this proxy and just remember, Abel is playing to win and we have an owner-operator. And for a lot of us, the fact that Abel wasn't really leaking anything to himself and was only earning economics in the exact same way we were, you know, probably in order of importance, Abel taking $0 in salary and being an owner-operator. And then number 2, CATSI existing. Those are probably the 2 most important things for my investment thesis. And so I recommend everyone to learn how to read a proxy because incentives drive outcomes. I think Elon says that the most, and I truly believe it. Incentives drive outcomes. And so Abella's incentive is make the stock go up. So far, that has been generally the outcome. Worth noting. So now let's get to stuff like building, you know, metal in orbit, which I guess, um, some of our learned people care about. Well, in order to get metal in orbit, you need people on Earth. And AST investors pointed out that the AST SpaceMobile recruitment drive continues. And so there's now more jobs outstanding on the website. than there were previously. So there's over 200. Company continues to grow and we have to ask ourselves, you know, what are they delivering into? And we believe that that's a multiple shell company. The more I sit back and think about this, there's some analogs that are close to home for me, one of which is the rise of my personal hero, Ken Griffin. So some people might be taken aback at how the person who is responsible for the short ladder attacks could somehow be my hero. Well, Ken Griffin is an S-class badass. I don't know that I've ever met, and yes, I have met someone who is a more brilliant business tactician with an ability to hold in really exclude complacency from a business to innovate and see opportunity and adjust with markets like this guy. But the real genius behind Ken was figuring out how to build a business and infrastructure, A, very efficiently. Doesn't really apply to ASTS because what Ken did is basically build out world-class infrastructure through pass-through expense reporting that LPs in theory got the benefit of through returns but never really got the ownership of what ultimately led to things like Citadel Securities as well as like the entire high-frequency trading business. It's my side note. Um, but what Ken did is he woke up one day and boom, he basically has Goldman Sachs as a guy without having taken outside money. He's raised some bonds, but it's, it's actually just astounding that you look— when you look at the rise of Citadel and how they did it. And so now he has weapons-grade infrastructure around the world. Pretty cool. What gets me so excited, again, as a shadow board member, Iron Man, um, secretive industrialist trying to control the world through my, um, investments— reality, I just own the stock in a stupid brokerage account, but you know, it's kind of fun to, to say this stuff. Um, what I think about is, yeah, cool. We have like all these satellites, but what we also really have is this unbelievable infrastructure to build satellites. That's really neat. And what we've really seen in the world is this value of like, wait for it, manufacturing, you know, pretty wild that for the whole, you know, big chunk of my life, everyone was like software eats the world, software eats the world. And people were really investing in Electrons. And then, you know, you wake up one day and you realize like the stuff you actually really need in this world still requires atoms. And so it's physical plant. And, you know, look at what's important in the world right now. It's, you know, do you have the physical plant to go build a bunch of Tomahawk missiles? You know, do you have the shipyards to go build a bunch of ships? Do you have the big battery manufacturers to build EVs, to make humanoid robotics? To build chips, to have data centers. It's actually like the atoms that have mattered. And I still think that ASTS, when people take a step back, they're going to go, holy crap, this company has global infrastructure to be one of the largest satellite manufacturers by tonnage in the world. And what really hit me was last week when I was watching this video from SpaceX, there's this 28-minute video Elon put out. It was so cool. And so I highly recommend people find this and watch it. It's about Starship because you just look at the physical plant that they've built, the rocket manufacturing facility, the test facilities. It's unbelievable. The physical infrastructure they've built. I know it can be replicated because Blue Origin has done it, but Blue Origin is, you know, it's like one of the top 10 richest guys in the universe decided this is the thing he was going to focus on. So yeah, the barriers are pretty high. We'll see if Rocket Lab can do it, but there's very few companies that can do this. So If you're building up the infrastructure to manufacture rockets, test them, and, you know, really then do cool things with them, it's pretty scarce good. There's some real barriers there. What ASTS is doing is this vertically integrated sort of Manhattan Project for satellite manufacturing in a world that's now realized that the secular trend is space and satellites. And I go, you know, again, from my little would-be, you know, Bruce Wayne mentality, like, That's cool. That's my little industrial empire. And I don't think that people really understand the ASTS thesis in that way. It's usually like, will the tech work? And they're thinking about the little bluebirds popping out of the nest, but the nest itself is an unbelievable source of competitive advantage. They've done 2 things. They've designed the cutting-edge technology, but then they had to design and build the cutting-edge physical plant to manufacture it all. 2 very hard things. And that goes back to the whining, moaning, and groaning thing we just talked about a second ago of when they miss expectations. Well, yeah, no shit, dude. They're, they're building the house right now. It's hard. And I don't think— and the house is actually the, the wrong analog. They're— what's the right thing? I mean, they're literally building the factory While they tried to build the product. And these are 2 very, very hard things. It's not like Porsche retooling and being like, surprise, there's a 911 GT3 SC with a manual. We said we were never going to build a GT convertible, but now we have with a manual, assholes who, you know, all bought Spyder RSs. And, you know, yeah, sure. Stuttgart can just like retool and pop out a new $300,000 car. No problem. But building the factory in Stuttgart, was very hard. So the 911, pretty cool piece of intellectual property, but then the plant to build the 911s, also pretty cool piece of technology. And ANTS has done both of those things. And so again, when you're missing guidance, you got to ask yourself, well, is it because I'm doing 2 extremely hard things, which when complete give me these unbelievable moats and unbelievable sources of value, or are they missing guidance because of some competitive pressure like the Blockbuster analog? Again, they are not the same. And you need to develop some cognitive skills in life to realize when 2 things are massively different that lead to massively different life outcomes for yourself. So that's my, you know, inculcation of this point. So now let's get to the other things that are hard with satellite companies. So you got to have metal in orbit, but you also have to have stuff on the ground. you have to have ground stations. So we had seen— we didn't actually really tweet this, uh, because it seemed like the company, um, hadn't really intended for this to be public, but now it's coming out. Um, there had been something in the SES, which is a European satellite company, in their annual report talking about their, their deal with AST SpaceMobile. Well, SES was buying Lynk, and they're a European sort of satellite TV provider, like What? What are they doing with ASTS? That was really the question. And it came out in an expert call with SES about a partnership for ground stations, which has yet to be announced. But apparently it's a done deal. That's cool. And so we've actually now kind of closed the loop on this. We've seen it in the public filings. We were really all kind of very confused about what it could mean, but then it came out in an expert call and now it's in the public domain. I didn't do it, but, you know, talking to it. And so, you know, now we know what they're doing and here's what they're doing. SES is providing AST SpaceMobile with ground infrastructure, teleports, gateways, fiber backhaul, and the local regulatory landing rights needed to bring AST satellite signal down to Earth and connect them into terrestrial networks. ASTS owns the satellites and commercial relationships with the MNOs, but those satellites are useless without someone to land the data. And you need the backhaul. And so in effect, SES appears to be selling a gateway as a service to ASTS itself, which will be passed through to the MNOs. And that just allows everything to go faster. So cool development. Again, really kind of like a picks and shovels type of thing. Not something for anyone to wake up tomorrow and go, I need to, or wait, I don't need to go buy stock in the overnight market because of that revelation. But if you're a long-term investor and you're seeing how The building blocks are being put together. That's another one. It's, you know, it's good to know. And so now let's revisit the bear argument again. When people get really negative, the sort of fragility of human emotion never ceases to amaze me because I get sort of frantic as well. Like you get negative and then honestly it just spirals. I've again found it very useful to to work with the Space Mob because in isolation it can be a very lonely place. You know, the stock goes down and you don't really know why. You don't really have anyone to talk to, and then you assume you're wrong, something you're missing, get in a bad place, sell at the bottom. That's really kind of what happens to most people. Space Mob is sort of a self-help group for better or for worse. And what it does help you though is contextualize a lot of information and bounce it off a lot of other people who can help frame it and, you know, make it feel better when you're losing unimaginable amounts of money, which is certainly me, but you can really see the bear argument, which is just simply ASTS is not launching satellites fast enough.
[00:35:32] Speaker A: Okay.
[00:35:33] Speaker C: Well, you know, this guy Pat Cakes, I mean, Kevin Chen was pretty funny, but, you know, Reddit is really a cesspool of human weakness. And that's really the bear argument. You can see it in Vic write-ups, you see it everywhere. Everyone just sort of falls on the sword on launch, you know, and they spin it out of control and go, oh my God, there's not going to be any launch and, you know, not launching fast enough. And they're really not thinking through, you know, we've talked about many times. Sorry, I'm trying to also watch this hockey game while I do this. So it's a lot of multitasking. Zuccarella. Hell yeah. I'm a hockey fan for the past one week, so I really don't even— didn't even know what a power play was until I Googled it. But what a, what a great sport for the playoffs. Um, definitely not letting my kids play hockey though. My only lesson from this is like, God, this is violent. I don't know, I can't— like, why can't they make this a little more family friendly? But anyway, going back to business at hand, launch is a really easy bear thesis to dismiss because if you're short the stock based on concern about launch, what happens when you wake up and they launch? It's like, whoopsie daisy. And so what happens if, you know, this week you wake up and realize, oh no, they have like 4 successive SpaceX launches in a row for 3 Bluebirds each. Does that blow up your thesis? What happens if that's true? What happens if the FAA, um, you know, grants an expedited launch approval for New Glenn and they, and they nail it? What happens if ASTS actually has some undisclosed relationship with the NSSL, which is the government launch program? What if, what if, what if? If you have a bear thesis, you have to go through the permutations of how quickly that could flip on its head and what happens. Do you get your eyeballs ripped out on that? And it's, you know, useful thing to think of. And meanwhile, The FCC is just gunning it in terms of making Leo happen. And so the FCC is paving the way for D2C. They want to supercharge choices in the market. And what's really interesting is to see Brendan Carr talk about this. They see it as a big upgrade and competitive with fiber. And so yeah, this is somewhat related to SpaceX's core offerings and things like that, but it's just showing how quickly what was dismissed as a niche market is now being viewed as like one of the bona fide, you know, 4 Horsemen for consumer connectivity choice. And the FCC is really leaning into it. They're, you know, letting these guys use more power. They're Letting spectrum be repurposed, things like this. This is certainly helpful for SpaceX, but it's also very helpful for ASTS. Whatever is good for SpaceX generally means that we can, we could already do things well under the prior rules and we can do them better with new rules. And then you're going to have things like Legato, for example, where spectrum that was stranded is going to be repurposed and You know, effectively approved for this use. We believe that things like grain management will have their spectrum approved for this. SiriusXM might, and that's just more capacity that is available. And then that just is more demand for that metal in orbit that can process and really make use of that spectrum. So it's very interesting. So then we get back into the whole competitive dynamic. There was this interesting study out of China of all. Places. Um, so out of Tsinghua University, they took a look at how Starlink actually worked. And the punchline is that it's kind of crappy and doesn't work very well. And there's lots of dropped calls and they specifically tested things like WhatsApp, which is interesting. And people don't really like it, but it's better than nothing. But it kind of contextualized, you know, why it is that the Starlink service isn't really having a lot of demand. That's because it's not very good. And so the mistake is investors go, aha, Starlink isn't having the demand, people don't really like it, so therefore ASTS is doomed. Well, I don't know, you know, can you think of some services where the initial thing wasn't very good and so you didn't buy it and then the killer app came out and everyone used it? I feel like the personal computer is an example. The cell phone, Is an example. Everything is an example, and so that's really where the bears are glomming now because they're getting what they think are their first aha moments that okay, supposing you can get regulatory approval, supposing you can build a satellite, supposing they work, no one's going to pay. Well, okay, you know that is the debate, and we'll find out about it. But one would point out that the Starlink system really sucks, and it's not very useful. And so as a result, you can see why consumers don't get really addicted to it because it's high friction, doesn't work very consistently. And that's not how the American consumer, for example, works. It needs to be frictionless. People have really high expectations and they are demanding. And so that's why Abel had first principles to have a service that will be that killer app. Then meanwhile, SpaceX is having these posts about direct to cow. You know, which again we kind of made fun of before, but it's about this rancher using SpaceX connectivity for smart cattle collars, cattle collars that removes the need for cell towers or on-ranch infrastructure. Well, now there's a problem statement you probably haven't thought of, and this is a big Starlink thing. And so it just goes to show you, you know, how much demand there is. We could really quickly see, you know, how many head of cattle are there? How many in, you know, probably Australia, head of cattle in the US? I'm going to guess like a million. I could be off by a lot.
[00:41:39] Speaker B: Whoa.
[00:41:39] Speaker A: Okay.
[00:41:41] Speaker C: A lot. 86 million. And so that's a lot of cows. Who knew? I guess the whole thing about like, you know, methane emissions from cow farts is probably right. And so that's a, that's a lot of cows. Not every cow is obviously going to have a Starlink collar, but you just kind of can think about that. Well, that could end up probably, you know, having a lot of applications in terms of herd management and things like that. Who knows? One of probably 4,000 use cases for this technology. And so as it rolls out, let's see what happens. I'm taking the bet the market's going to be really big. And then the MNOs themselves, I believe are going to be the next part of the AI trade. And so Verizon, for example, came out in their earnings call, said it's in deep talks with hyperscalers, cloud providers, and large enterprises to use its fiber and 5G assets for AI infrastructure. They say a revenue opportunity that could be worth multi-billions of dollars. The company said more details could come in 3 to 6 months. I've always thought of ASTS as an AI infrastructure play because all of the compute in the world don't mean a thing if you can't communicate to it. Signals have to go back and forth to process information. And so sure, maybe some AI can be on the edge. I don't know. Makes sense that there's going to have to be connectivity. Makes sense you're going to want to have this always on. Uh, the demand for things that are then everywhere are going to probably have more exposure to gaps and connectivity issues. And this is my bet that this will be right. And so it goes to the IoT observations and really the AI infrastructure observations that I think could be quite meaningful. Meanwhile, Amazon is coming to the direct polar opposite of user demand. People are addicted to convenience. And so Andy Jassy, who's the president of Amazon, said, The last thing I'll say about it is, you know, your question about Globalstar. Increasingly, what we're finding with our customers and enterprises and governments is that they don't like to have any periods where they don't have connectivity. It upsets whatever customer experience they're going through, even in metropolitan areas. We all hit certain parts of the highway or certain roads where you can't get connectivity, or you're hiking or skiing. We see very large demand for consumers to have direct-to-device. That was really the impetus for our acquisition of Globalstar. They have unusual and scarce global spectrum that's required to provide direct-to-device. So that's what Amazon's view is, you know, what do they know about anything, right? And then more broadly, just space is the secular trend. Government defense is oriented toward that. And it's just really the priority of U.S. defense spending. So that's a good place to be in terms of where money's going to flow. And then the procurement methodology has also changed. So as we've talked about many, many times, they're going to be leveraging the commercial capacity for government use because it drives down costs. It makes the systems much more resilient and robust. And so that goes right to the fairway of ASTS, going back to what I started originally around of how much value there is. In the satellite production capacity we're building, because we are going to be able to make, you know, I don't know the exact stat, but I looked it up the other day, but I think we'll have one of the top 3 satellite production capacity ratings of any, anything. And that's, that's going to have value as new use cases and new needs emerge because our satellites are quite flexible. At the end of the day, ASTS has invented a way to create the most power in orbit. The first way they're monetizing that power is through RF signals. Other ways you can monetize that power is AI compute, actually beaming energy down. There's all sorts of things, but fundamentally the platform is around power generation and really the duty cycle of that power generation. That was the critical solve they did. Once you have that much power in orbit, Hooking up elements to create telecommunication gear is the very obvious first way in which you monetize that power in orbit. Just like Iceland probably thought of all sorts of things of what to do with all their power. And they realized that the highest value at use way to export electricity when you have an island in the middle of the ocean is aluminum smelting. But their critical observation is we have cheap power. And then they got into the aluminum business. So useful to also think about that. Golden Dome is in motion. We continue to have some big awards coming out. According to General Mike Gutland, Golden Dome is real. It is no longer theoretical. We are underway. We are shovel ready and we're building it right now. It is reality in motion. Let's get some contracts, bro. I can't think of anything that can change the sentiment more quickly than a couple of big dog contracts for Golden Dome. And so they're saying it's on schedule, on budget, completed initial classified architecture design, awarded contracts, site analysis and visits are underway. All right. Giddy up. I hope we get some big contracts out of there. I have some real expectations that we will, but you know, kooks can be kooks. And the Department of War has been investing a lot of money. And so we saw some really cool things this week about, I believe it was $140 million. For a Department of War contract as part of a radar system. We'll see if that goes through us. I hope it does. And then we have gotten approval for using spectrum over the ocean, which again has some pretty obvious use cases for the military. So we shall see. A lot of us have some pretty high expectations of some near-term military awards. Maybe we'll get something on the earnings call, but that's really conjecture. On my part, not something I would, you know, really position around. But then we also go back to the competitive landscape. A nice article was out, a SpaceX phone, question mark, not if AT&T gets its way. SpaceX won't be an MVNO if AT&T has anything to do with it, according to AT&T John Stankey. Whoa, shots fired. What? Like common sense has entered the room. And so, yeah, no shit. Like AT&T is not going to say, hey, Wolf. Would you like to sleep next to our nice cozy warm sheep? Just don't eat them. They're not that dumb. And so the MNOs are very clearly on guard about SpaceX. They know that they are an enemy. Whether they kind of wonder whether ASTS might one day, you know, grow into something that is too big to control is a totally different issue, but ASTS isn't openly pursuing warfare against the MNOs. Like, they are being carrier neutral. SpaceX is clearly going to do a phone. They need to do this to justify, you know, $2 trillion valuation. And the MNOs are, you know, they control the terrestrial spectrum, which creates a very interesting dynamic because it just brings into the issue of SpaceX just doesn't have enough spectrum. To do anything that ambitious, Amazon does not have enough spectrum to do anything ambitious. ASTS does in partnership with the MNO, so it's actually a very nice check and balance, which I'm sure the MNOs also appreciate. And then Sam Altman in the room. Okay, you know, hey buddy, how you doing? You know, weirdo. And you know, turns out Sam still weird. But OpenAI is reportedly building a phone designed to replace the iPhone. Well, I can't wait to see that. But it just goes to show you, AI connectivity, hardware devices, they're all going to rely on spectrum. No one has figured out a replacement of spectrum. Now, wouldn't that be a big idea? But I don't know how that would work, and I don't think it will work. And so Spectrum is the critical path item of humanity, and it's about to intersect with some really big companies that have really big ambitions, and ASTS is in the middle of that. I think it's a pretty good place to be. So that's what I remind myself with when I'm crashing out and super sad and posting you know, somber memes on X for no reason, then I remind myself, put on my Iron Man helmet and big boy pants and realize, oh, Rome wasn't built in a day. Stocks are volatile and this company's building out massively strategic infrastructure that intersects with the world's largest and most dynamic growing markets. It's going to be okay. And, you know, then I focus on other problems like Why did I gain two pounds this week? You know, like this is what you got to do to stay sane. And then we have to ask ourselves, well, if I'm focused on like why am I not making progress on my six pack? And I realize like oh, perhaps it was because I ate like three pounds of sugar-coated nuts. Then I ask myself, well, what is SpaceX focused on? Well, again, incentives drive outcomes as per Elon Musk himself. So what is Elon's incentive? 200 million super voting shares. I actually don't know the cap table of, uh, SpaceX, so I don't know what that equates to, but I am sure it is a lot of money. And he gets that if SpaceX hits a $7.5 trillion valuation and establishes a permanent Mars colony with at least 1 million people. So it sounds like that's a joint double trigger condition, which means that he's going to be focused on deporting a million people to Mars. Like, it's kind of interesting when you think about like, so how does he intend to do this? I don't think I am going to live on a Mars colony. And so is this like in collaboration with ICE or like, who are the Martians going to be is a very interesting question. Is there a surfable Point Break on Mars? Would like to know. And so he's got to figure out how to convince a million people to go to Mars and then actually figure out how to Get a million people to Mars while doing that in a creative way, because I don't know the business model of Mars. Are these people paying him all their money, and that's going to be considered like ARR? Who knows? And so these SpaceX incentives are beyond my comprehension. But then the other thing that's interesting is he gets an additional sixty million shares if SpaceX. again hits certain valuation goals and operates data centers in space delivering 100 terawatts of compute. Well, I don't really see anything here talking about D2C or a phone. So incentives drive outcomes. What is King Elon going to be having his team do? Sounds like it's going to be abducting people and hiding them on Mars while somehow getting paid to do it. in a value accretive way. Count me as very curious to see how this plays out. But is his focus going to be on D2C? I think again, it's going to be AI data centers. That's where the Cursor acquisition comes into play. You can see he's basically like, damn it, I have a lot of compute. You know, people asking Grok to like change women's outfits is probably not a scalable business model. I need to do something else. So he bought Cursor, smart frontend, a lot of demand for compute, backend it into Grok. Okay. I'm starting to see something make sense here. Leverage my SpaceX infrastructure for AI data centers. Okay. That makes sense to me. The Mars thing. I don't know. I mean, cool. Hope he works. I hope it works, but I don't know the business model. But where, you know, people can only do so many things. Like, Where is that focus going to come on the DTC segment? We'll find out, but incentives drive outcomes and we don't see that incentive actually being set. We actually don't even see any incentives being set for Starlink at all. And interestingly, so then Starlink seems to be hitting a TAM limit. They're cutting price. Well, it's not the end of the world, but it means you've exhausted the premium tier of users. who will pay the current price. And so you expand your TAM by dropping price. That's fine. The problem is when you have to drop your price for everyone, sort of like the reverse way in which a power grid works, where the marginal unit of power that's dispatched sets the price for the entire curve. You know, Elon can discriminate by market and things like that and by plan. So you can try to get different people to pay different prices. That's fair game. And, um, But he's got to figure out a way to expand the market. At the same time, Zuck also wants to go to space. And so we have an article coming out and see what do we have. Meta is also looking to power AI data centers with solar energy collected in space, taking a novel approach to meeting its insatiable demand for electricity. So we've got Elon with his key incentive being determined by AI data centers in space. We have Mark Zuckerberg Now saying it, we have Google saying it, and we have Amazon saying it. And yet the bears are like, this won't work. But the 4 or 5 most prominent companies with the wherewithal to actually understand this are all focused on it. Good to know, because again, ASTS has an advantage with the most power on orbit. Makes the company very strategic, which again goes to then The infrastructure it's building to produce all of these satellites at scale. Yeah, I get it. A little bit delayed, but once it's going, what a glorious moment that will be. Really neat. So now we have a couple of technical issues and we're almost up on the hour too. It always kind of turns out to be an hour, even though I would happily just go for whatever period of time is required, but we have the Russell rebalancing. So, you know, saw the usual suspects sharing this information. And Panman and Cassie, and you know they have something here. So Russell reconstitution provides an interesting technical event, and so I haven't done the math myself, but it looks like you know in these AIs are pretty good at this. So it looks like there might be ten million shares of demand into the end of June. What's interesting about that is we've had that before. That happened last year. And the stock was really ripping, but then Scott needed money. And so Scott Dalusky struck again, you know, and frankly, like, good for him. And that took all the wind out of the stock, but the stock was really pumping on the back of some good fundamentals, Block.one. And then you had this Russell rebalance that just kind of added some gas to the fire. And that looks like it's set up to happen again. And so the stock is, you know, crushed on the 200-day moving average, really terrible sentiment. We just had a failed satellite, so people, you know, you know, bad fundamental event right as we're about to have a big technical rebalance. My belief, we're going to get what we want on the batch shipments. It does seem like the stock is particularly coiled for something great, and unlike previous times It does not look like ASTS is in the market to go raise money on the back of any strength. They just did that other convert. Never say never, but it sure looks like they really might be done with that, which then coincides to 3-tail infinity, which is, you know, my new little moniker for what we're about to have in terms of shipments. Could finally be the time where we sort of have slingshotted around orbit. Ready to go to the moon, and so that perfect confluence of events—we've seen it before on what happens when we have these sort of traffic jams. And as Anpanman points out, we have almost 64 million shares short—all-time high. The convert guys have been covering because they're on a lower delta. So you've had all-time high shorting offsetting. the mechanical covering by the convert guys. So a lot of people are piling in and it's going to be, you know, 12 noon at the OK Corral pretty soon. I'm always a little worried. I'm like, where do the shorts know? But historically, the shorts really just pile on on negative momentum and they, you know, we kind of see what they're thinking because of these expert calls. When they just have these expert calls, which you're paying like $1,200 for, and it's basically just like, so can they launch? Will they launch? Will SpaceX launch them? Why, Why would SpaceX launch them? There's no launch. Oh my God, launch, launch, launch, launch, launch, launch, launch, launch. Then you, you kind of realize like, okay, they really don't have a good thesis here. It's just literally concerns about launch. And they convince their PM, they go, yo, bro, I did some like work here. Uh, Elon has launchers and Elon has satellites. So Elon won't launch other people's satellites because Elon has his own satellites, bro. And then Bezos, uh, he owns a book company and that book company is now launching satellites, bro. And so his launchers— wait for it— his launchers are going to launch the book company satellites, bro. So there's going to be no launchers. And AST is a satellite company only, bro. And he has launch contracts with launchers who have their own satellites, bro. And so they're not going to honor the contracts, bro, and they're not going to have any launch. You should short it. And they have. And we're about to find out if we're going to blast their balls off. And I hope that we do, because at some level, as I said earlier, I'm a wingnut and I get real psychic joy from watching shorts get their heads blown off so that I can make funny ex posts About various losers wearing Patagonia vests having open-to-work profiles on LinkedIn. That is what I stand for. Some shitposting with my boy Corey, making fun of people wearing Patagonia vests with LinkedIn open-to-work profiles. And so I hope they cover at 150, and we will all be able to say Reformed Trader was right about everything with his magical charts. with unicorns and triangles. And I think he's going to be right and it's going to be awesome. So with that, I missed what appeared to be a pretty cool hockey game, but I'll get over it. And there is some stuff that came out over the weekend with some cool DD people were publishing. So I'll, I'll get to that and I'll update the DD doc too. And I hope everyone has a wonderful weekend and thank you very, very much for joining. And Just remember when I'm like crazy posting scary stuff, it like I'm actually just like laughing. So just also don't freak out. Actually, just ignore me. That's really the best thing is if it's not actually due diligence that I always present that serious, literally ignore everything else I post and you will live a happy, fruitful, successful life. Have a great night.
[01:01:20] Speaker A: Bye. Thanks for listening to the AST Space Mover podcast. If you enjoy 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.
[01:01:40] Speaker B: We're doing something very, very big, and I think with this technology we can really affect a billion lives. 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 MNOs.
[01:02:21] Speaker A: Listen.
[01:02:21] Speaker C: Mmm, waffles.