Kook's Weekly - May 18 - SpaceMobile's Global Checkmate

[00:00:07] Speaker A: This is the AST SpaceMobile Podcast.
[00:00:11] 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.
[00:00:30] Speaker C: Okay. Good evening, everyone. Thanks for joining. And what a week. I'm just looking at the beginning of my notes and thinking the company reported earnings last week. And so I'm just always amazed at how much progress and how many events there are. I'm just kind of getting reoriented. I just got home from a camping trip where You know, a successful trip is one of the new guys we were trying to recruit stabbed himself with his diving kill knife, which I didn't know what it was. And like to the bone, like cut his leg open. But luckily we have a surgeon with the US Navy in our group. And so he was able to clean him up, but then the surgeon went down with food poisoning. So last night when my friend's wound was kind of reopening, Unfortunately, our 24-hour urgent care was not 24-hour when the surgeon goes down. But, you know, it's like, it's like how, you know, you have a good weekend when that guy comes home to his wife and he's like, yeah, I got stabbed, repaired by a US Navy surgeon and lived to tell about it. Fun was had by all. So catching back up sort of with the context switching from that is a lot, but as luck would have it, a black Porsche 918 just blew past me when I was walking back from dinner, which is almost certainly a good luck omen of what's to come. So then we always want to look at what the recent past has had when thinking about what type of luck will come. And so let's start before even earnings. Let's just start about thinking. And so one guy that I always dismissed despite working in 767 Fifth Avenue where Ron Baron works. I'd never really thought much about Ron Baron. It was only sort of later in my career that I began to appreciate his way of thinking. And so as a hedge fund guy, I would always think like, you know, these long-only guys, like they're so slow. And some of his high-level ideas and pitches always seemed so simple when I was doing really complex event-driven things like backflips. to try to make a buck. Guys like that, with the benefit of hindsight, were doing a really amazing job of zooming out and synthesizing secular trends and most importantly, identifying generational founders. And so the first time I really kind of dug into Ron Baron's way of thinking was with Tesla back in 2016. And I remember kind of just reading an article about His thesis, and it was you know really simple. He's like, well, you know if they get you know five percent of the market for their car with this gross margin, that's the amount of EBIT they're going to have. And you put a multiple on that, and bang, you know huge company. And it's just funny. I was like, yeah, you know that's actually really defines the questions well because then you've really just reduced it to do I think that they can get you know this percent of the market? And then you'd ask yourself, well, why would they? Is an electric EV designed from first principles at an affordable price point that looks like a Mazda. Is that what the market will want? Mazda looks notwithstanding, previously people had these weird, crazy vehicles that no one really wanted, and certainly no one was designing a Mazda to compete with the Mercedes S-Class. And when he did that, that was a new product. people glommed onto it and that answered your market share question and the math followed and then the market cap followed. And so Ron Baron is one of these great thinkers who has identified many of the world's great growth companies over time. And he strikes again with SpaceX and he sees this monstrous opportunity with launch and Starlink and all these other businesses that are going to emerge from the space economy. And so what I've really done is try to learn how to think like that and really embrace this. I mean, it's not even learn how to think like that. It's embrace the simplicity of that thinking so that you don't overcomplicate it with yourself. And so I was hanging out with Tanner, really trying to teach Tanner an important lesson because I know who he is, but he doesn't know who I am. And so when I met up with him, I really thought about actually renting a white van and just really scaring the shit out of him and just pretending I was going to just grab him. But then I thought, hey, that wouldn't be very nice. But it is important. Don't trust people you meet on the internet. You never know who people really are. And I did feel like it was a missed opportunity for me to teach him this lesson since he's at a young age and has many years to look forward to. But aside from the opportunity that I seized to take in grabbing him in a white van, we were just talking about the fact you just don't have to do that much. And I was talking to another investor this week and he was asking me, you know, what new ideas do you have? What, you know, I said, I don't have any new ideas. I don't want, well, I want new ideas. I'm always looking for new things, but I don't need to be cycling through all these new ideas. I just need to make sure that the thing I have works. And if I think the thing I have is going to work, the hardest challenge is doing nothing and just realizing that the secular trend and the generational founder and the unique lead the company has, which, you know, for me it's AST SpaceMobile, Is all I need to do. And even looking at year over year, and Tanner and I were reminiscing on this point, it was over a year ago, less than a year ago when the stock hit $60 at the end of July, and then the Lewski struck with a convertible bond and knocked us out of bed on that. But even taking that $60 print year over year, the stock, you know, up nearly 30% from the high print. If all you did in life is compound at 30%, you are going to outperform literally everyone except just a handful of statistical outliers. And so the real art is finding those securities that can compound at 20 to 30% a year and then just do nothing. And it's so tempting, especially on FinTwit, to be cycling through new ideas, to be hunting through chart opportunities and things like that. And I've just always found that action is really the enemy of good investment returns for myself. Could be different for other people, but certainly true for myself. So when I sit down to do work, it's really just trying to make sure I know what I own. And so I was just reading the Hennessy letter, which was pretty interesting, and they write as if they know something is really kind of how I read that. Letter, they're writing like they've stumbled upon some uncommon wisdoms, especially around the military use cases. And so we learned a lot about that on the earnings call, but kind of starting backwards before we even get to the earnings call, the shocking news this week was the Empire Striking Back. And so really out of nowhere, the MNOs created this JV Which is shocking to say the least. But when I got woken up by Anpanman, I think he called me at around 5 AM my time. I just went to Bloomberg, checked the news and just saw MNOs create JV. It didn't mention ASTS, didn't mention SpaceX. From that headline, anyone that's been following this company should have known immediately what this was about. And it was interesting because Anpanman definitely did, and he was saying, Cook, wake up, buy, buy, buy. This is the Verizon moment. And I was thinking, yeah, the difference was when Verizon hit back in 2024, I owned 20% of what I own now. And so I had a lot to buy to catch up. And so I kind of just went back to bed because I feel like I own plenty. But it's really great news. And so a proposed direct-to-device joint venture by US mobile operators could have left, I guess, a couple of people confused about what that meant. But you have to be pretty dense to then not realize that when Abel Avalon immediately tweets out an AST SpaceMobile press release commending the JV, which had been prepared very clearly for this moment, and then @AT&T, Verizon, and T-Mobile with a smiley cowboy face. I don't think this JV is bad for AST SpaceMobile. And if that weren't enough, um, you have the Starlink executives going wild on the internet. But this structure is interesting because we don't really know how it's structured yet. And they have to be exceedingly careful about Department of Justice actions against it because what it cannot be is a buyer's cartel. You cannot do that. That would be bad for markets, bad for choice, and anti-competitive. And so if you know it's not going to be that, you need to start thinking about what it could be. And more likely than not, the JV is going to be very narrowly scoped and really be a thin layer that does spectrum coordination, technical specs, and potentially some gateways. But it almost certainly is not a single buyer that would be facing AST SpaceMobile and or Starlink. But what it probably is doing is pooling the spectrum. In a way to make sure that SpaceX is effectively boxed out. Really, there's only one way to interpret this press release is T-Mobile woke up and went, what have we done? What have we done giving Starlink an initial foray into our core market right as those guys, those guys being Starlink, get spectrum? Which can be terrestrial as well. Why in the world would you leave the drawbridge on Noah's Ark open for that animal to come on your boat and devour your flock? You wouldn't do it. T-Mobile did it. But you know, there's nothing like the present to make up for idiotic prior decisions. And so Now they have. And it was interesting, we had a guy who works for a major corporation's legal team at James Zington, and he just also stated the obvious, is this press release, from his perspective as someone that does this all day, is not about dead zone coverage. It is about keeping SpaceX out. And he points out that AT&T and Verizon already have commercial agreements with ASTS. Those run through 2030. They can't change that with a JV. So those preexist commercial contracts, which were separately negotiated last, unless ASTS proactively decided to amend them. And maybe they have, maybe they haven't. We don't know yet. And so they also definitely didn't Decide to just let Starlink into this deal. I think they all just sort of realized that as much as they despise T-Mobile, and AT&T and Verizon do despise T-Mobile, T-Mobile making irrational, stupid decisions and being left out of the AST SpaceMobile Club was going to be bad for all of the carriers because this was no longer the issue where T-Mobile maybe ran the wrong type of pricing promotion on a Super Bowl ad. And sort of messed up AT&T and Verizon for a little bit. This is a permanent competitive change that could be happening if T-Mobile does stupid stuff and lets Starlink become a bona fide MNO. All of them suffer forever if there all of a sudden are 4 big MNOs versus 3. They really can't have that happen and they have to really do everything they can. And so a lot of us over the past year or two had speculated and were mocked thoroughly, for what it's worth, but we had predicted that T-Mobile would one day flip to AST SpaceMobile. What we had found out, subsequently confirmed, is that T-Mobile only had a 1-year deal with AST SpaceMobile. They had an LTV of about $100 million. We have that information confirmed from Starlink interviews as well. Then we started to see Grain Management, which has this 800 megahertz spectrum with T-Mobile, and their docket has been pretty active. I haven't followed it with a fine-tooth comb, but I've read it. And this deal closes with Grain and it gives them this juicy spectrum and they want to operationalize it as fast as possible. And there's been an active docket with the FCC. And they talk about putting that into use right away. I'm looking for the exact quote, but that's the essence of it. Well, there's only one company on a D2C basis that can use low-band spectrum, and that's AST SpaceMobile, or at least use it effectively. I guess Lynk, in a way, might be able to use it, but not effectively. And the reason why Starlink can't use it is, again, the basic physics of how D2C works. And we've talked about this quite Quite a lot. But the punchline is that low-band spectrum has a wave that is bigger. Low-band waves are just physically bigger. And so then the elements, or so the parts of the satellite that create the electromagnetic energy to create the wave, must be spaced further apart. Otherwise, the waves smack into each other and interfere. As opposed to high-band spectrum, those waves are skinny, and so those elements can be closer. You need a certain amount of elements to have a phased array big enough to have enough of these beams or waves to create beams. And if you're using low-band spectrum, those elements, you need a certain amount of them spaced at a great distance. You need a phased array that is big. And the only company that has a phased array big enough is AST SpaceMobile. Therefore, GRAIN, you know, just using induction, Grain must be about to do a deal with AOC Space Mobile is the thought. And this really goes to spectrum will go to the most efficient use case. And Katzi has really been predicting this for quite a while, and he put out some interesting tweets, which I've linked out. We have Kevin Chen out there with some interesting tweets, and he also made the point that the data we got this week on the testing speeds from AST SpaceMobile show that AST has also been able to figure out carrier aggregation, which is to use multiple chunks of spectrum at the same time transmitting to a single device to achieve really high speeds. And so, for example, to hit the effective 100 megabits per second, We know that there's a limit to the spectral efficiency. And so if you have 100 megabits per second and say that that's divided by 4 bits per hertz, something like that, um, well, it's not possible that ASTS was doing this just on a 5 megahertz sliver of spectrum. They must have been using, you know, 4 slivers of 10 or something like that. To have achieved these speeds, which means that they've achieved quite an incredible feat in terms of doing carrier aggregation of the spectrum, which means that more spectrum can really find a way to this platform. And then we have confirmation that the next generation satellites, which are bigger, bigger means more beams, And more powerful beams are going to nearly double those speeds and so do 200 megabits per second. And so ASTS has been blowing away the prior technical specs that they had guided us to, which is really great. By contrast, SpaceX has hit a whopping 3 megabits per second. And so on one hand, you have FM1, which is going to be doing 200 megabits per second versus the tested speed. So we have guys out in the North Sea able to test Starlink on a real bona fide, as a user would see it. You're clearly not sharing that beam with anyone when you're in the middle of a harsh environment, and Starlink is just doing 3 megabits per second. And so they are not the same. Starlink, good for some text message servicing, but it's not true broadband. ASTS is hitting that. The MNOs want that. It's a great use of their spectrum. It's a great product that people are going to be excited by, and you have to really understand that. The sell side was quick to come to the same conclusions that we came to. So you had Roth Capital, say that the triumvirate JV caters to AST SpaceMobile. So they're again drawing the right conclusion, which you really saw in the stock price reaction. The stock was kind of like, ouch, up, up a little bit before really taking off. And so the market in really general has had to take some time to digest and really understand what did this JV mean. And to be clear, I don't think we fully know what it means because we haven't seen the details of the JV. But the quick conclusion is that it is the MNOs teaming up against SpaceX and the weapon of choice for them to do so is AST SpaceMobile. That's really the simple conclusion. And then let me just see who else we had really on the sell side. We had, yeah, well, Will Townsend knew about it in advance and was briefed. I didn't see any further analysis from him, but he does say that this isn't really about eliminating dead zones. He goes, quote, I also view this alliance as a defensive move to mitigate the impact of any non-terrestrial network service provider that might wish to more directly compete with the mobile network operators. That's exactly what I think. And so the takeaway by the market should be that the MNOs Have finally woken up to these Leo providers. It's the explicit acknowledgement that these Leo operators are competitors, and so that means Starlink. That means Amazon, AT&T, and Verizon see where this could go, and they don't like it. They cannot cede customers to any new entrant. The good news is they have this. Unbelievable moat, which is the low-band spectrum, and they will never give it up. And so it seems very difficult to see how any new entrant could be a bona fide true competitor in the US mobile network. But at the same time, I could see how this market could evolve. And so the ways in which people use their mobile device, for example, could really end up being an AI device. You just really don't know. We don't know what the new hardware might come out in some ways as easily as the iPhone came into the market and changed all of our lives. We have no idea what might come next. And so there's reason for them to be worried and reason for them to invest massively to stay ahead of it. And they do not have the technology AST SpaceMobile has, and they most likely will not have it. It's a very unnatural thing for them to control And John Stankey has said the same thing previously when people have said, well, why don't you just do it yourself? He would go, we can't. It makes no sense. This is a global asset. We're a regional player. This is a multi-client economies of scale business. It makes sense for us to partner with someone, but does not make sense for us to own it ourselves. It is something they would not be able to monetize appropriately. So that's good. That's our thesis that's taking form, is that we are a global infrastructure layer that has a lot of commercial barriers to entry that make it very difficult. And now we've had the current buyer set that we're most interested in wake up. And I say current buyer set is that presupposes that AT&T, Verizon, and T-Mobile will continue to be dominant in their markets, which I think is a very likely scenario for years and years to come. And now they've woken up and they're doing everything to hug us and embrace us to fend off SpaceX. Seems like a really good place for us to be. So longer term, we saw some of the, you know, FUDsters aside, saw some real people ask some questions, you know, going to this idea, is this now a single buyer market? Is there going to be pricing pressure and things like that? Those are fair questions and things we need to really Think about goes back to, is there actually going to be an OPEC of MNOs teaming up against satellite players? I think the answer is no. It gets very difficult when you actually start to think about it. Let's just say they wanted to try, which again, that would be presumably very difficult with the DOJ, but the US is one market, not all of the markets. It is an important market, but it is not the only market. So they can do whatever they want, but ASTS could say, no, we don't want to. And you know, in the extreme, not serve the US market. Again, US market's very important. And so they have Europe and all these other countries in Africa and things like that. Again, not nearly as attractive in higher ARPU markets, but just thinking about the extreme, if you try to have someone gang up on you and create an OPEC against you, will it work? And then you cut into the government market. So then all of a sudden you go, well, look, we're not going to get bullied. We're just going to serve government and first responders. And so you start to go geography by geography where you have lots of power as AST SpaceMobile, but then you start to go market by market. Now, what we haven't seen, which I fully expect, is that we're going to start to add some non-traditional buyers to our cadre, like Meta and Google and things like that. I think the thing that has not flipped yet is when the MNOs start to actually get disintermediated by different types of devices. You think Anthropic is not thinking about ways to have connectivity to enable its service to people? We already know OpenAI is thinking about an OpenAI phone. And so the ability for these 3 MNOs, as important as they are, if they were to try to go hostile, the multiple layers of ASTS's moat are, are simply too strong. And so you can just start from the first place is I don't think that they have an alternative. Even if they wanted to, there is no alternative to AST SpaceMobile. Uh, to use the tagline of another company for You know, that I like, there is no substitute. They didn't just build a satellite, they built an entirely different type of satellite. It is bigger and more powerful than anything that has ever been built, and it's showing its performance as being 60 times that of what Starlink presently has. And again, the company isn't standing still. So they have done something that people cannot do. And so there is not a fungible commoditized satellite market. There is a company that can do things and there are other companies that cannot. There right now is one choice. Maybe that will change over time, but right now there is no choice. And then you get to think about, well, can other people copy you? There's an IP moat. There are years of innovation And engineering and patents and pending patents and the production platform to build all this stuff that make this very difficult to do. For example, can MDA actually build something that's comparable to this? I think no way. And so it is really an ASTS versus everyone situation. Versus a consumer, for example, can have real choice in buying an iPhone versus an Android phone. You know, there's there's real options. There's a lot of you know balkanization, like I'm an iPhone guy and you know whatever. But there's choice, and both devices are pretty great. That choice does not exist in the satellite market. It's AST Space Mobile or or the highway. ASTS is already integrated, and so the thing I think people forget is. It wasn't like they just walked up and inserted a plug into AT&T and worked. AT&T has talked about teams, I think it was like 200 people working on this because they want ASTS to work as if it's native on their network. And it is native on their market, on their network. It's not a parallel network. It is treated as native AT&T traffic integrated with AT&T's billing, IMS, voicemail, lawful intercept, Everything that integration took years of engineering and regulatory work. A lot of IP behind that. You're not creating that overnight. And the other thing is just the regulatory moat. You have to go get your spectrum and constellation approved. You'd have to go get your own SES authorization for the same bands, which are AT&T's bands and Verizon's bands and FirstNet bands. That's not fungible. And that's a 2 to 3 regular, 2 to 3 year regulatory pathway at a minimum. And so even if the MNOs wanted to commoditize this, there's no equivalent. The tech is hard. The IP moats are hard. The integrations are hard. The regulatory hurdle is hard. It seems really difficult to try to do something adversarial to AST SpaceMobile. which then just leaves the corollary of this JV was probably good for them. And that is probably the answer. And you could see the frustration. I know a lot of us took quite a lot of joy in this, but you could see the frustration in the SpaceX executives. And then you kind of ask yourself, well, why don't they just give up? Like, why not just do Space AI? And then just look at this interview with Sean Maguire, who's the partner in Sequoia. talking about this, and he thinks that direct-to-cell is probably going to be a bigger market than the original consumer internet business. I think so too. I've said many times that when you look at Facebook's original business with desktop, mobile was bigger. I don't know why that wouldn't be the same for connectivity, and I've certainly placed my bet on that. And It seems like it's a difficult thing for SpaceX to give up on, but what we might have is the same type of permutations of what XAI has gone through. And so Elon also understood that AI is not going away. That cat is out of the hat. But XAI kind of sucks. Grok is, you know, fun for making pictures and stuff, but it, it kind of sucks. And so he's invested huge amounts of money, really doesn't look to have a pathway to be a leader in it. Looks like Anthropic has run away, but then OpenAI is still around and you have some more consumer-grade products with Gemini. It's just not really obvious to me where Grok fits in. I'm a subscriber for the premium product too, just to make sure I'm on top of it. And then you saw that Elon's starting to do some stuff to basically amortize his exposure there. Buying Cursor makes sense because you can leverage a lot of that compute, vertically integrate Cursor. Then he's just wholesaling his capacity to Anthropic. And so you really have to ask yourself, what is SpaceX's long-term plan with the spectrum they invested in, $20 billion? And I don't think we really know, but their path in the D2C market just got really hard. If they lose T-Mobile, which again, all the signs point to that happening, what's their pathway? And I don't know, because you're not going to just go build a speculative constellation. Starlink has opportunity costs. They're great capital allocators. For them to throw up a bunch of D2C payloads, Is presumably at the expense of the fixed broadband payloads and at the expense of a third-party cargo and potentially moving forward in AI data center cargo. And so if they throw up a lot of satellites and there's really no usage over the US market, and then a bunch of teeny little customers here and there in Europe, I know they have a lot of MNOs, but some of these are not the big ones. I don't know if the numbers really work. So what are they going to do? And, you know, maybe there's something else other people see, but I'm just looking at, are they able to deliver their constellation into a big opportunity given that ASTS is getting effectively turned into the standard by the MNOs? I don't, I'm sure that I'm wrong on this statement, but it looks like there is not a very clear path for them and that they might Sort of pivot away or do something else that's non-traditional with those assets. But it's a curious question that we have to ask and think about. And Starlink's going to have to talk about this in their IPO. And so that's where I think their answer is going to be. We're going to roll out a SpaceX phone. That seems like the best answer for their audience, which is going to assume that no matter what they do, they're going to win. That's sort of the SpaceX way. And that's ambitious. It's on brand for them going direct. They've proven they can go direct. They've done a great job with hardware with Starlink. I mean, they have all the necessary sort of sets of experiences. You know, if you can build a car, you should be able to build a phone. And so that might also be what the MNOs saw coming imminently is that SpaceX had sort of a crappy commercial plan for D2C as it currently is with the MNOs. And they have to figure out something going direct. And you think about Elon's going to have payments. It's going to be wrapped into the Tesla vehicles. He's got social with X and AI. Maybe his integrated device is good. We'll see. Seems very hard to do a device. What software is it going to run on? How are you going to get the app ecosystems? these are the things that would make me very skeptical of that. But sometimes, you know, you don't want to let details get in, get in the way. So then amazingly this week we also had earnings. I thought the earnings call was great. And the idea that people were upset about this because they missed on revenue, it's sort of like, can we just go back to being a pre-revenue company? Kind of like in, uh, in Billions when the the guy, I'm forgetting his name, was coaching the Pied Piper team, like, don't have revenue, then they're going to want more of it. You're going to have to have targets and things like that. Whatever you do, don't have revenue. You know, it's like, I kind of want to go back to that all of a sudden. You were starting to have revenue and now people want more of it and to be on target. And so I think it seems like the algos kind of read the headline, but I don't want to blame the algos. I think part of it is there, there were a lot of expectations by enthusiasts for the company, you know, for like me, for example. I thought that we might get, um, some government deals and, and some other spicy things. I'm always pretty excited about earnings because I feel like I have a pretty good understanding of what's going to happen in this company. So it's easy for someone like me to be really, um, expectant, like a, like an expectant mother. waiting to give birth to a beautiful set of commercial opportunities. And people, I think, wanted some MNO contracts and things like that. And then you had also seen Rocket Lab literally launch itself with a great report showing a lot of commercial momentum. And I'm sure that there were some people thinking, you know, I'm going to get in ASTS. Seems like it's set up, chart is good. I'm going to try to catch like a 30% rally in this thing. And then when there really weren't any barn burners in the press release, I think you could probably have a lot of hot money coming out. A lot of people who had bought options coming out, you're selling those deltas. And so sort of created a little bit maybe of a perception that there was a disappointment, but I didn't read it that way because again, I'm thinking like Ron Baron. And so, and I, you know, as I've— this isn't like a recent change for me. I'm thinking like an owner. And so I view this as the report the management is giving me, personally is, you know, Cook, here's the update on, on your business. And I saw scaled manufacturing happening. I saw tech that was doing great. Update on things I already knew, like regulatory posture, uh, incredible balance sheet. Um, what else did I learn? You know, government opportunities. They were talking about some other things we'll get to in a sec, but the The big thing for me is it wasn't a disappointment. I could just see how disappointment is really just expectations that are not met. But in isolation, the company is really doing great. We were able to see that the next Bluebirds were, you know, after batch 1 were in final integration and testing. Bluebird 8 looked to already be packaged. No one knows when they're going to ship. Literally no one knows when they're going to ship. It might never ship. We just really don't know. It's a mystery, but it, maybe it will ship soon. You just really don't know. And, you know, other than the fact that they said the satellites are ready to ship in the document, you really have no idea on how to know whether the satellites are going to ship or not, other than the fact they said they will soon. So that's exciting. But you can see visually that things are looking good and they look like they're going to have 2 batches of satellites ready to ship. in July. 2, I repeat, 2 in July. Pretty exciting. We have new government deals. And what was neat is that Africa looks locked in. We have conquered Africa and that's exciting. And so those MNOs with Axion, Vodacom, Safaricom, MTN, Nigeria, and Orange, we already have the JV effectively in Africa. We have the JV in Europe. We have the JV in the US. We're blocking SpaceX out. And it's one of those things where you wonder, has the market seen how we have totally dominated the world contractually before we have even started? Shocking. Which just again leads me to believe that If, or not if, when we start shipping a lot of satellites, when that becomes something where people get a lot of comfort in our production cadence, which I think is coming soon, I could see how generalists sort of don't have the same level of detail or focus on this issue, not to take away anything from them, but I think Space Mob is very focused on this. And so then the level of understanding of this is maybe more uniquely held by Space Mob than your average investor. And what would not surprise me, and this is what I was telling Tanner too, what would not surprise me is like some of these AI optic plays and things like that where you look at the chart and they're just like a vertical line up. And some of these names I'd owned for a hot moment and then sort of like given up because I didn't know what I owned. Simple as that. I wasn't the right owner for these things and someone else made the money that they deserve to make. But this one, I deserve to make the money. And when you sit on it long enough, sometimes you can lose perspective of when we start shipping those satellites, all of a sudden, I think it's going to rewrite the narrative that's already there of absolute global domination. And so I was telling Tanner, I was like, I don't know if I'd be totally surprised if we start popping out, you know, 3, 6, 10 satellites in a month. And if you wake up one day and the stock is like $500 and people are falling over themselves because they're like, this is Facebook Mobile, they've dominated the world. There's non-communication use cases. They got Golden Dome. And did you know they do radars? And there's this guy named Katzi. He was right about everything. I'm like, no shit.
[00:38:48] Speaker A: What?
[00:38:48] Speaker C: Katzi was right about everything? I actually knew that. I have a hat that says Katzi was right about everything. How could I possibly be surprised at Katzi being right about everything when I have a hat that says this? And that's the thing was when you sit on something for so long, sometimes you can be surprised. By the things you already know that other people recently learned. And that's where you want to be really careful, for example, on things like covered calls, because sometimes you might think you know what you own, but you haven't quite understood what the clearing price of that thing is when everyone else learns. And we also have what's going to be potentially a biblical shrinkage of the float because of the short interest that's out there. And so we have, um, I don't have the exact numbers right in front of me, but, uh, 60 million shares. And so it's, I think that's 60, what is that of the free float? It's a lot. Um, you know, over 30% of the free float. If those guys all come in to cover because they realize that their thesis is wrong, that's, those shares are effectively outstanding right now. Someone borrowed them and sold them. that's an effective increase of the float. It's a massive amount of synthetic dilution. When that reverses, that's the same thing as a violent stock repurchase. And so that's where, to me, all bets are off on what the market clearing price is once the operational momentum, which is then going to be coupled by the commercial momentum, really hits its stride. So I get pretty excited. Other things we learned, Let me just make sure I do this somewhat in order. Um, well, before I think about other things we learned, uh, Tanner had a really good breakdown of the images just showing all the different bluebirds that are there. And so he's an engineer, as most of you know, and is able to sort of spot a lot of process issues and could see again, you know, kind of where the guidance is coming from. And so, you know, I spy with my little eye He's seen launch number 5 in final testing. So that means a July launch. Again, pretty exciting. And then we go back to the Africa stuff I was just talking about. Alex from Babylon says the market completely missed this, but AST just locked down Africa in the same way it locked down the US and the EU. It's a lot of people. It's very exciting. The commercial traction continues. And that's again, the issue of if you wake up one day and all of a sudden people are falling over themselves saying, Katzi was right about everything. And you go, but I knew that. I knew that cat. I literally know that cat. I feed that cat. It's my cat. And you might not appreciate your cat until other people try to take your cat. And you're going to know these things. Market's not really moving on this stuff, but it's coiling. These fundamentals are being pre-wired for people to appreciate them later, like a fine wine. Right now we have lots of grape juice sitting in some vats, but this shit is first growth. People just don't realize it. This company is packing barrels of Lafite, and when it goes to market It's going to be priced very well. And right now people see some grapes, but I think in 3 to 6 months they're going to be seeing some Château Margaux, and that will be pretty fun for those of us that have a lot of stock. Europe continues to be really exciting. This account I've never heard of, uh, named Anpanman, Flagged Daniel Thomas, who's in the sales and commercial part of Satco, and he just goes exciting times as we work with our partners across Europe to take out this world tech and enable it for the benefit of our customer bases. And he points out all the customers they have. And so what this account that I've never heard of named Anpanman says is that he predicts Deutsche Telekom. Will join. I think that's happening too. We have actually seen quite a lot of comments from Deutsche Telekom that seem very suggestive that they are making peace and breaking the baguette. Well, they would probably be more of like sharing the Wiener Schnitzel with AST SpaceMobile. That will be pretty fun. And the MNOs, when you kind of step back, the MNOs keep aligning themselves. Toward AST Space Mobile's success. While not absolute, it is useful to remember that Verizon owns a lot of AST Space Mobile stock. AT&T owns a lot of stock. Vodafone owns a lot of stock. And now Telus Canada owns a lot of stock. Google owns a lot of stock. Rakuten owned a lot of stock, owns a little bit less stock, but after printing whatever it was, like $400 million of gains the other day, Sort of, they were able to uncork one of those bottles of Château Margaux and go, the grapes turned out well. And they took a taste. Might end up being an expensive taste for them if the stock goes to where it's going to go, but they're enjoying the fruits of their labor. But when you take a step back too, Abel has been very smart. He's made all of his customers who have the power to both make this company, but also complicate this company, for example, through JVs. He's made them aligned with their success. They, in the most simplest terms, want AST SpaceMobile to go up. They have huge investments in this company now because of stock price appreciation. TELUS recently made an equity investment, again, a customer that is aligned with our success. Not aligned to beat us up on price and things like that, because that hurts their equity investment. Obviously it has to be juxtaposed versus the underlying TELUS business, AT&T business, Verizon business, et cetera. But all else equal, they're going to want ASTS to win versus Starlink on a pure financial sense, but then doubly so because Starlink is probably going to go compete with them. AST SpaceMobile will not. So it's good to have an aligned cap table. We have another tweet just talking more about the testing results that we already really talked about. And again, it's demonstrating the carrier aggregation where it looks like we are really killing it. And we also have some more testing examples where it looks like we're able to deliver spectral efficiency of up to 6 bits per second per hertz, which is astonishing and just shows to continue to show that these big antennas, our technology is delivering wild performance versus what was previously thought to be possible. And the company's now showing it. You know, they're starting to really pound their pound their chest about it, which is also interesting. It's a different level of really aggression by the company, which tells you that they're feeling very confident of where they are and their ability to really make a breakout move. Speaking of breaking out, the company took radar out of stealth. So the irony is, you know, the radar showed up on the radar in the most recent earnings call. So we had known that this company was involved With radar services, but they hadn't really talked about it. It had always been under the guise of non-communication use cases. That was really what they said. On this call, Scott said radar capabilities out loud. And then Abel said it's been in use today and said it does not require mid-band. It's been used on low-band spectrum deployed today. Well, a lot of us had also been mocked on noting that AST space satellites had always somehow, some way had flyovers exactly when the US was launching very sophisticated electronic warfare campaigns in various theaters across the world. People would laugh at us. Well, now we know that. These capabilities are being used today, and as we have more satellites, will just be increasingly used because our coverage will increase. Pretty exciting. Abel said the core capabilities of what the government is using was incorporated many years back. Katzi was right about everything. He detected it, he found it, he analyzed it, he understood it, and he communicated it to those who would listen. And now here we are. We also got some more updates on Golden Dome. Scott said, what did he say? They received another award related to Golden Dome, and I think we can all expect more of these things to continue. Again, when I read these Hennessy letters, I feel like I'm reading something from people who know more than we know. I'm reading someone's Understanding that we are getting very big deals related to Golden Dome. They're too specific with some of their numbers for investment firm. They should otherwise just be like, we bought this speccy satellite thing, went up a lot.
[00:48:30] Speaker B: Awesome.
[00:48:31] Speaker C: Talk to you later. They're being very specific about the government revenue expectations they have. So I kind of read that. and just kind of wonder when the rest of the world will catch up on that. And this is great because again, it allows us to use our services in the US market where even in a scenario that I do not believe is true, where JV tries to mess around with our economics, we have plenty of stuff to do in the US to drive a hard bargain. Company is doing a really great job having commercial diversity across geographies, And customers in those geographies to have a very robust business that will be respected and paid according to the value it creates. Do not mess with Abel and Scott. They seem to be very commercially savvy at not getting pushed around. We also learned that the ASIC is complete. It's been incorporated into the production line. It's very exciting as well because it allows us to process more bandwidth. So the beams are the beams. Beams relate to speed. How many beams you can have relates to the processing capacity of the satellite and the use of power, which relates to the ASIC. So we're excited to see that company very clearly signaled this to us through some of the non-blurred photos. And then the 10-K was also pretty clear about it being done and incorporated. So I'm pretty excited about that. They talked about how we're going to be using ULA for launch. Some more exciting news. We believe we can fit 5 satellites on a ULA rocket. The Centaur is, I believe, 5 for 5. It's a big boy rocket commonly associated with the US military. And, you know, we'll be very excited to go to these launches. So we have Blue Origin, we have SpaceX, obviously. We have ISRO, and now we have ULA. I suspect that we're going to have some launch partners in Asia and some launch partners in Europe, and then hopefully we'll really launch with everyone. But we need some of these big boy rockets because that's where we get a lot of the scale. And speaking of big boy rockets, the most beautiful of them all is New Glenn. Really like an A+ for, for style, for For an industrial asset, I don't know why you'd even try to make it this beautiful unless you were just going for style points for pure love of the game. And Jeff Bezos has made a beautiful rocket. And the good news is that beautiful rocket is going to be back on the launch pad really fast. And so New Glenn 3 notwithstanding, these guys seem like they're standing up an aggressive schedule. And they tweeted out a picture with 2 boosters in the hangar. And so getting these boosters built, getting them fired up and in the cadence means that these guys are going to start to have a very aggressive launch schedule. And because these rockets have so much more capacity than a Falcon 9, the effective addition of supply in this market starts to add up and be pretty big. So we're pretty excited about that. What else do we have? So Only 6 Inches shared some research. I believe that this was something from Lynk, ironically, Charles Miller actually saying that we're Really good. Times change. And then also just the TAM, which is pretty cool, the TAM expander. And so MNOs are going to start replacing their uneconomical towers with D2C, and the FCC in its most recent decisions is encouraging this fungibility between satellite and terrestrial. Really, what is the most efficient use of spectrum? And then it's cool to find out that the space mob actually has a lot of tower guys in it. And to quote this guy, NotKen2024, yep, I used to build and own rural towers, a mini American Tower. As I learned about ASTS years ago, my partners and I decided to sell all of our towers. I rolled a good chunk into ASTS. MNOs spend a lot on rural towers that do not pencil out. ASTS will save them billions Per year. Good move, Ken. If you see your business about to be totally disrupted, you should sell it before other people come to that realization. And if you're super smart, like not Ken, buying the thing that is disrupting you is a way to turn a good exit from yourself into an astounding result. So good for you. But it's also great for us When I think about Space Mob, the diversity of experiences that come together for us to understand the whole of what is going on is, I think, really unmatched. This is a great example confirming our thesis that this is not just about dead zones. It's about also rationalizing the CapEx footprint of the MNOs. And the FCC is putting fuel on this fire. The basic message from the FCC is get it Done. They're open to the functional equivalence model for spectrum buildout requirements. Coverage and service delivery matter more to them than where it comes from. So terrestrial tower versus directly from space, don't care. They just want the spectrum used on the functional equivalence. And so if you can light up high data rates from space, and that can get it done, FCC is saying good. And you can see this in some of the new requirements. AT&T in its recently acquired EchoStar spectrum can use D2D to meet some of these buildout requirements. Again, pretty exciting. And then let's just see what else. We have some more from Only 6 Inches. From my perspective, what is he saying? I think it's just talking about the fact that SpaceX and Amazon are seeing this big business. It's a huge business. It's a multi-hundred billion dollar business that it's going to grow into. It solves problems for 8 billion customers. It's going to be the first space satellite business in history where you can have billions of paying customers. Good. Glad we own that. I'm glad we dominated. Oh yeah. And ironically, yeah, this is Charles Miller. So this is the former sort of, I think he's, he was defenestrated, the founder of Link. And so, you know, he's the one telling people how massive this opportunity is and really kind of talking about how a bell, you know, is really there. And the MNOs are seeing it too. The MNOs are seeing this This wave coming for them, and they're not being complacent. They see that the FCC's new approach has the chance to enable someone like SpaceX to be much more aggressive than they previously were, and that's probably scaring the living hell out of them, as it should. And so again, in this battle, the weapon they're picking up is AST SpaceMobile. Before this whole JV came out, I had a thread again from this account and Panman where the T-Mobile CFO expressed excitement for AST SpaceMobile and Amazon, for example. And so Craig Moffett says, had a question on the earnings call and Peter, the CFO at T-Mobile says, yes, they're absolutely complements. And that's why we're excited that Amazon Globalstar partnership is getting in there. You have AST getting in there. So I think we'll have great, we'll have a great competitive set there for complementary services. So they're seeing that they're going to be using other people as well. Now we know that the JV came out. So let's see what else we really need to focus on. SpaceX and Google continue to make waves around AI data centers in space. Continues to be something that I think ASTS will be involved in. We had more comments in the earnings call about power on orbit and things like that. That's always consistent with AI data centers. And remember, the critical innovation with AST SpaceMobile is their Micron, which is this sort of sandwich, waffle sandwich, which couples solar, the heat transfer electronics, and then the Earth the Earth-facing thing that uses electricity. In the first instance, this is of course RF technology, but nothing stops that from being any other innovation in the future that consumes electricity because ultimately AST SpaceMobile creates the most power on orbit. It happens to be the case that real estate square footage in space is not only correlated to power, but due to the physics of RF, also conducive to the right type of RF because beams require space, but nothing says that this company can't also be effective at AI data centers if that ultimately is supported by the economics. And so we had a lot this week. It was pretty exciting. There was definitely no kook bottom this week. I know people were kind of looking for signs after earnings call when the stock traded off, but there was no despondency from me. I felt like it was a good call. I'm very happy about where the company is. They're really about to— I think they are firing on all cylinders, but the visible signs of that are coming in the next weeks and certainly months. And so I feel great about things. And then the JV is certainly something I want to very carefully monitor, but my first instinct is that it's a complete validation that ASTS is the carrier-neutral choice and that these other guys have now correctly seen the fear of, or experienced the fear of God in realizing that they need to make sure that Starlink doesn't do anything, or these other Mag 7 companies don't enter their business, which I think Is showing the power of connectivity. The original thesis we always had was these Mag 7 guys, they live on the consumer connection. If your phone doesn't work, you're not consuming their services. They've laid underground fiber. They've tried to deliver Wi-Fi from balloons. They've done everything to try to increase their market reach through connectivity. ASTS seems like it's the killer app to do that at scale in a way no one has ever done before, which is why my belief has always been, despite the relentless mocking, uh, by experts, that ASTS has the ingredients to be one of the largest companies in the world. I don't know if it will be, but it has the ingredients of that. Which is pretty cool. And so what I learned on the earnings call was more validation that that belief could be true, but certainly no details that led me to believe it is not true. The JV by the MNOs made me believe that we are with the right winner, with the right commercial strategy. It also tells you that they are scared of SpaceX, which tells you that SpaceX is something to be scared of. So net-net, not great to have a competitor. But then what we found out is that SpaceX isn't really a competitor to AST SpaceMobile in the B2B2C market. They're really in the B2B market because all of the B2B customers are terrified of them and are going to try not to use them, which means that they will all use AST SpaceMobile, which gives us a monopoly. But what you're worried about is SpaceX creating its new phone and vertically integrating and taking out Apple, for example, and everyone walks around with a SpaceX phone. I don't think that's going to happen, but that's certainly what's now more visible to the M&Os. So this next week, I'm sure that literally nothing will happen and it will be super boring. And for the first time ever, we will have no weekly and no Spaces. That certainly seems like what's set to happen. So with that, hope everyone has a super boring week. You might as well just like Take a vacation next week because I'm sure nothing will happen at all. So just unplug, relax, and enjoy your life. And if something happens, then we'll have a weekly and we'll have a space. That that's my bargain. Talk to everyone soon.
[01:01:22] Speaker B: Bye.
[01:01:28] Speaker A: Thanks for listening to the AST Space Rover Podcast. If you enjoyed this episode. And you'd like to help support the podcast, please share it with others, post about it on social media, or leave a rating and review. To catch all the latest news about AST SpaceMobile, make sure to subscribe. Thanks again, and I'll see you next time.
[01:01:51] Speaker B: We're doing something very, very big, and I think with this technology we can really affect billion lives. AST SpaceMobile is the only company that has proven technology to deliver cellular broadband connectivity directly from space to the everyday smartphone. People will just basically turn on their phone and be seamless regardless of where you are. We don't want the user even to know that it's connected by satellite. Our role is to bring this into reality, always in partnership with the MNOs.
[01:02:28] Speaker A: Listen. Mmm, waffles.