Kook's Weekly - April 26 - The 99 Successes of a Launch Failure

[00:00:06] Speaker A: This is the AST SpaceMobile Podcast. 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.
[00:00:28] Speaker B: So apparently there are some people on the Spaces, even though it does appear in terms of, uh, facts showing that no one showed up. Um, so this time last week I was exhausted, and so coming back from Orlando, and we had all learned the fate of BB-7, which Brings me to tears, but Space Mob has lost before. And I really think that the launch last week in my book was a success in 99 ways and a failure in only one. And so there's obviously some bias in that statement. I'm a hopelessly positive person with respect to this company. But when you take a step back and think about it, we really did achieve quite a lot with this. And so for a lot of us, it was again, a time to meet the team and meet the company. I had the opportunity to sit on a bus next to one of the ASTS employees. And I would say that these guys really do honor the NDA. I tried to play dumb, which is not very hard for me. And started to ask some technical questions and he immediately, this guy immediately shot back, I can't tell you that. I'm like, oh no, no, no. But like, you know, high level. So they're a vault, which is good to know because for all this guy knows, I was a SpaceX employee trying to figure out the unfurling mechanism. And, you know, I would've promptly reported him to Abel and had him guillotined if he had given any information away. But what I did learn is How confident this team is in the future of this company, how confident the team is in the tech, and interestingly, just how confused they are at what their competitors are doing. They really don't have an answer on how SpaceX is going to come up with a competing tech solution. And they're even more confused on how Amazon is going to do it with the third-party contractor MDA doing it. Because ultimately what I value about this company is the vertical integration. I can't even begin to imagine the process of inventing something and not controlling it. And so all of the testing, all of the iterations, all of the little things that go require control in short cycles, not having to then negotiate a change order with a third-party Canadian company who doesn't really even have your interest in mind. And so when I've studied this industry going back to the '90s, which is all in the DD document, you can see that a common thread behind 100% of the failures is the use of a prime contractor to build out a constellation. Usually this would end in protracted decade-long litigations where a Boeing, a Motorola, or whatever would really screw the client and the client being the Teledesic, And that kind of the ICOs of the world. And then you even look at Viasat today, they have problem with their antenna, and I believe that that is a Harris design. And it's just the same problem, like, where's your recourse? And then you get to everyone lawyering up. The first thing you're going to do, because all of a sudden it becomes a contractual or breach of contract or contract interpretation issue, not necessarily a problem-solving issue, because all of a sudden the contractor goes, well, are you going to pay me? And so I think it's, to me, the precursor of failure is when you don't control that process. SpaceX controls that process. And so that's a more likely competitor in this field, but it just goes back to the ASTS team is so focused on doing this. I'm impressed at the talent they've been able to recruit, and it is really good to see the team showing up that energy. I know for me, that's a big part of my investment research is seeing this team and just reading body language. Rightly or wrongly, I view myself as having a reasonably good ability to read people and, you know, could be wrong, but that's at least something I think that I'm reasonably good at doing. And reading a room and seeing whether there's a team coming together or if it's a broken team and people that don't believe in a mission. I see an enthusiastic team that believes in a mission, sees a real challenge, and sees an opportunity for themselves that's not available at the big primes. That's really exciting. What we also learned from Abel is that BB7, rest in peace, uh, rest in pieces now, um, was going to be doing 150 megabits per second. And so previously they had disclosed that it was going to do, I think, greatly over 120 megabits per second. But in the morning breakfast that they held for us, which was again extremely generous of the company to do. Uh, he disclosed 150 megabits per second. Very exciting. And it was very exciting to see the New Glenn vehicle. And so again, it was 99 successes last Sunday and 1 failure. Of the 99 successes, the things that really have me excited about what we learned, and let me just see actually if I'm doing this in sequence. Let me take a step back. So we covered the 150 megabits per second. That's an important piece of information for people to reflect on. Why is that important? And so 150 megabits per second really relates to the capacity per beam, and each satellite can do something like 2,000 beams. This is all going to be limited by the spectral processing capacity on the satellite, but not every beam is pumping at full level. It's all very dynamic. But what it means is that in a given beam, that's where all of a sudden the users are splitting capacity. And so that means, you know, if I'm so unlucky to be in the same beam as Corey, Corey's going to be hogging all the data, doing ridiculous memes with that dude, uh, which his little avatar of that, uh, let's just say very thick. Uh, high caloric avatar. He's going to be using all the data and because we're splitting it. And then, you know, by contrast, I wouldn't want to be sharing a beam with N-Pen Man because the guy's going to be on Spaces 24 hours a day hogging up the data. But the more data a beam has, the more data there is to split. And SpaceX, if memory serves, is doing like, I think it was like 4 megabits per beam, like very low. And Elon was very transparent about the data limitations they have. So what we're seeing is more spectral efficiency. That's the math. So given a certain amount of megahertz that the company is allowed to operate on, the megabits per second then means the satellite is increasingly efficient. And that is good. That's really alpha that's owned by the company and something that we We want to see. So the tech has made an improvement. I still emphatically will tell people that the most difficult thing is to get the factory churning. And so this company is doing really 2 things at the same time. They're developing a new technology and financing it and building the team. They're also building a satellite factory. So one thing is to design the satellite itself, Hard. The second thing is to build your own satellite factory. Super hard. So I don't know if everyone saw this pretty cool video SpaceX put out, but it was this 28-minute video around Starship and it, it's just knock your socks off impressive when you just think about the infrastructure that's built to build the rocket. It's wild. The, just the size of the infrastructure, The manufacturing capabilities they've built, the testing capabilities they've built, even the thing that moves the rocket to the pad is crazy. All of this infrastructure is really mind-boggling. And the same has been true for Blue Origin. And so these companies that are vertically integrated are building this incredible PP&E footprint in addition to the ultimate unique tech that they're doing. So to me, a lot of the real value of FM1, FM2, aside from the military proof point, which is certainly important and FM1 achieved that, is getting the production line spun up so that they started to work through all the critical path items, which relate to building the phased arrays, which they seemingly have really nailed because they seem to be very much ahead of production on the actual microns. But then you have the composite rings, which has certainly been a bottleneck. Composite's very difficult to work with. You got to make sure it doesn't break, not too brittle. Then you have the buses, which are very difficult. And so this is just an absolute huge control sat. That's the bus. Getting that working the first time is hard. Then you have to scale production of that. Looks like they've been receiving a lot of control sats. That's what's being dropped off in that Antonov. And so you're shaking down this satellite production facility. Once that's going, we move into a totally different cadence. And that's to me, you know, one of these things where it's going to sound like, you know, kook is a kook, and that would be true. But the boy who cried wolf, the boy who cried satellite production, you know, and all the villagers show up at the stock, you know, at $100. And then there's no production and they curse the name of the kook. And then the kook says, no, no, the production will happen. And all the people show up at $105 and they curse the kook and, you know, throw a pitchfork at them. But I dodged it because of my lightning fast reflexes. And then the kook cries, but, but they'll be producing soon. Constellation constipation is ending. And all the villagers show up one last time and go, we'll give this guy a shot. Stock closed above $100 in the overnight market. And then bam, everyone got crushed again. Curse the kook. But there will be a day when I'm right. And the interesting thing is many of the villagers will no longer be there. And kind of hard to parlay this analog of, you know, the boy who cried wolf, because I don't know what that means. Like, are the wolves going to come into the village and like eat everyone alive and that's a victory for the kook? I don't know. So this is where the analog sort of drops off and I'll just change real fast. But the point is, I've been crying satellite production cadence for now, God knows, probably 9 months. And I will be right at some point, which isn't really probably inspiring a whole lot of confidence in people, but I do believe that that moment is coming very soon. And FM2 had a role in shaking down that production cadence. The satellite production plant is an enormous source of value for this company. Defensible value, very difficult to replicate. We also got experience working with Blue Origin and so we were able to successfully mate to a New Glenn, work with that team. Presumably there's a good relationship between the 2 companies and honestly having the satellite fail. with Blue Origin at fault gave us an opportunity to be a good client and give Blue Origin the opportunity to make it up to us. And I can only imagine that Abel was deeply disappointed, but I'd find it very hard to believe that he called Jeff Bezos and chewed him out and poisoned the relationship. I don't know, maybe he did, but My guess is that he probably did not. My guess is that the companies are now as resolved to work together as ever before. And now Blue Origin owes us. They blew up one of our satellites. That's not cool. They know that. I was watching painfully as Bezos and David Limp were taking victory circles around the launch, thinking that that is perhaps a little bit tone deaf, but then they seem to kind of get it. But I also understand at some level they're Absolute unbridled excitement because never mind that it was in a way my cargo that was lost. So as an enormously large owner of this company, I feel like I had every right to be absolutely livid, but I was not. I also wasn't the person on the production line working 24 hours a day on the satellite, but I was the person worrying about that for 24 hours a day. So I didn't have the labor investment, but I had the emotional investment. And I might just also be more of a live and let live type of guy. I'm only vindictive toward anonymous accounts on X that disagree with me, but when it comes to real life, I'm actually a pretty forgiving individual. And so my own emotional reaction was, this shit's hard. And clearly Blue Origin was trying their best. They suffered an enormous consequence from this failure. They did not achieve their NSSL certification, which requires 4 successful launches in a row. That is a big problem for them. So these guys paid a huge price for this failure. We got our money back through insurance. We will probably get a free launch based on my understanding. But at another level, we saw Blue Origin land its booster again. That's a big success. We saw them get to orbit. That's a big success. And so now we had obviously some issue with the the last burn to get it in the right circular orbit. I'm going to you know flounder the science a little bit. It's called the second stage burn is circularization. The first burn lifts the apowaspis. Boy, this is. Revealing very quickly that I am a poorly educated individual, but, um, some of these words are very difficult to say. And once it's there, it relights and lifts the periapsis up. In this case, that failed and the orbit remained elliptical. So elliptical is bad because we were going around at 100 and I think 116 kilometers at the, um, perigee, I believe, and then 400 kilometers at the apogee, which is just wrong because we'll have way too much drag. And I, I know for sure that Blue Origin will identify the root cause of the problem and fix it. And there's also going to be a government investigation into it with the FAA, and they will have to account for what happened. And what's great for ASTS is that this satellite was a copy satellite, really an insurance satellite for the SDA program. So it was the twin of FM1. And FM-1 went up obviously earlier this year on the ISRO rocket, and they put this satellite on an experimental rocket where they had it mated while they hot-fired it, which told you that the risk posture on the satellite was very high. ASTS was willing to run hot on this satellite from the initial idea of using New Glenn 3 to the readiness of New Glenn 3. That's the hot fire, which having the cargo attached to it is Unusual to ultimately the loss of the cargo, and that kind of tells you that this was not make or break. I'm sure that the company was deeply, deeply disappointed. But then we also got new information on what is a hot point for Fudsters, which is the orbital debris. And I actually don't know what ODR stands for in this moment. Stands for. for orbital debris and something. Um, let me just look it up for the record. Orbital debris. Um, this issue was a big pain in the butt. So the Orbital Debris Assessment Report, this thing called an ODAR, uh, basically wasted an entire week of my life during the holidays one year. when Free Speech, this FUD account, started making claims that, uh, because of the delays in Block 1, we were missing a grandfather period with new FAA rules and regulations around orbital debris mitigation things. And I had to go down the rabbit hole and read a bazillion filings, research all this stuff, only to find out that it was absolutely just malignant falsehoods that this guy wrote on the internet to throw people like me off. I think the thought was someone would create the uncertainty, it would seem real enough, and I would go, oh my God, they're not compliant, the satellites won't work, I should sell. Instead, what I found out was the company was entirely consistent with all of the regulations. Like, duh. You know, the joke was, you know, thinking that like Scott was going to get a memo and be like, oh shit, we forgot about deorbiting the satellites. Goddamn, what are we going to do? Yeah, like as if. And, you know, and then you look at the resume of the company and it's, you know, the guys at the head of, um, University of Maryland, they're all like the defense specialists and you have all these like payload deorbiting specialists at the company. It's like, yeah, yeah, these guys actually probably read the rule. But now what's, what's cool. And again, unfortunate that we learned this right now. We had a real life example of deorbiting. So what's it like to deorbit a 6,000 kilogram hockey puck? In the wrong orbit. Well, that used to be hypothetical, and people would say, "Well, you cannot possibly approve this constellation because we don't know if they can, you know, deorbit. Maybe they'll cause the Kessler effect and ruin Leo for everyone." Well, boys, we had an opportunity to collect some data, and so the next thing we have, which is wild, is video in the Da'ula Atoll and the Tha Atoll. of, um, what looks to be the satellite breaking up, which is just wild. And so I recommend people look at this tweet. It's, um, from @MVCrisis. You know, what a name, right? I was in a crisis when my satellite blew up, but you can see it, uh, breaking up and it looks like this is it. And so we had the Harvard professor track the right orbital path. The timing was a little bit off, but I mean, geez, what's the probability of Something like that lighting up the sky on the exact orbit it's supposed to be on right after we knew we were deorbiting our satellite, sort of, you know, the glove fit. And so now we know we can deorbit. It really showed the company's end-of-life engineering. And I have to believe that this thing was probably more of an orbital risk than composite. The composite, I would imagine, would be easier to destroy in a deorbit. But we learned that too. And so the company actually had an opportunity to close the loop on a big engineering question that the FUDsters would talk about. If anyone has more information about this deorbit, please send it to me, DM it to me so I can sort of follow it. And, you know, would love to know if what I'm saying is correct in terms of the importance of those learnings. But there's really never a lost opportunity if you think positively in the development of a company. There was useful information. And useful experience. And one thing that I reflected on is it actually taught the investor base quite a lot. I was always living in fear of what happens when we have our first failure. You have to pop that cherry at some point, and we did. And so now the takeaway, I believe, is we're going to have another failure at some point. We're launching so many satellites that it just seems inevitable that we'll have a. Launch failure in the future. You know, if this is on, you know, launch 10, it really doesn't matter at that point. There's already, uh, constellation buildout. But it will be a good lesson so that the stock market knows that these are really buy-the-dip type things. And so Monday we had the stock, and a lot of people making emotional, emotional decisions. And those people that sold at $72 or whatever, you know, felt pretty bad when the stock then went to like $84 2 days later. On FCC approval, which we'll get to. And now obviously the stock's been trading pretty weak for reasons we can get into later. But but again, I do think that this launch was in a way a a big I don't want to say big success, but in a way really did move the ball forward quite meaningfully for us. If you consider yourself to be a long-term owner of the company, you have to look about the progress that was made just because you can't you can't undo. The, the Blue Origin mishap. And you just have to take appreciation that we did learn. We integrated a satellite with a new launch vehicle. The payload adapter worked, the separation system worked, the satellite survived the launch loads, the satellite turned on with functioning systems, and the satellite was controllable and deorbited. That's a lot. And we get our money back.
[00:21:50] Speaker A: So Yay.
[00:21:55] Speaker B: Yay for failed satellites. You know, people want metal in orbit. Well, we should qualify that metal that stays in orbit, but then Blue Origin's looking good. I mean, I just can't help but thinking in these pictures of Never Tell Me the Odds, which is the name of the booster, looks like, you know, CGI. This thing is just so beautiful. And this Blue Origin program, Really looks to be a winner. They seem to be so far ahead from SpaceX in terms of development of this program versus Starship, especially considering that they don't have the reps of Falcon 9 to sort of subsidize learnings. I mean, Glenn Shepard, you know, it was kind of a weird thing. And so Blue Origin's looking really good. But the other thing I think the market doesn't quite understand is people saw a Blue Origin failure and went, oh no, the launch vehicle program is now totally screwed up. Well, the contracts with SpaceX are a peculiar thing. The first rule of Fight Club is you are not allowed to talk about Fight Club, and SpaceX is Fight Club. What I know and what we saw a lot of evidence out this week, of the company reiterating is the company is going to be using SpaceX for most of the launches this year. That was really the plan A with some optionality on whether Blue Origin was going to be able to get commercial operations going in the near term. And then we had company executives sort of unwittingly confirm that. For example, a guy with the first name Michael, I'll just save his last name, even though I don't know who it is, Um, said, we look to seeing you back at the Cape, quote, very soon for the launch of Bluebirds 8 through 10. And he says, I can attest that these new satellites look awesome as we get ready to ship them shortly. Well, that's batch 1. That's going up on a Falcon. And then we had, what else did we have this week? Um, we had Ross, who is with ASTS, stated the company will launch satellites in batches of 3 using SpaceX Falcons until reaching over 40 satellites. And then our European correspondent picked up something. Oh, this is really just a correspondence between David Limp and the NASA administrator, Jared, just talking about how NASA is really supportive of what Blue Origin's doing. Great. Of course they are. And so I don't have any doubt because I actually know this, but I don't know if the market has knowledge on the next batches all being SpaceX. And in some of these expert consultant calls that I get, and that I know Only 6 Inches gets as well and shares, interesting hearing what hedge funds are asking these experts, because it really is just, hey, are there any launch vehicles? Are there any launch vehicles? Does a bell like Elon? Answers seemingly no. But oh my God, oh my God, how are they going to launch? What does this mean? What does this mean? Can they get 45? Oh, what if they don't get 45? Can I pull my hair out? What if I light my hair on fire? Oh my God, it's just going to shave my head. I mean, these guys are just doing the classic hedge fund thing is they identify some sort of hurdle and then they have a complete mental breakdown over assessment of whether that arbitrary hurdle at some future point in time is going to be met or not without thinking about directionality and pace. But the fundamental thing that they don't know, which I do know, is that the next launches are with SpaceX. And so I have that on multiple sources of information, then not the least of which is what the company's telling you. And that is what it is. And I think it's something that's kind of missed in the market. The market is very quick to hyperventilate and to find reasons to sort of outguess itself. And this is certainly the hedge fund way. Notice we've moved on from, does the tech work? Will they get FCC approval? All these other things. Now it's, This, you know, line in the sand people have drawn on will they reach 45? I have no idea. I just assume they won't because I truly don't care. This is all of a sudden where sort of, uh, different mindsets kick in. And sometimes I remind myself, oh, that's the thing everyone is worrying about. I should worry about that too. But I can't bring myself to worry about that because I just don't give a shit. If they're in the process, let's say they have 20 satellites up by year end, 30 or whatever. Only thing that matters is at that future point in time, what the pace looks like and whether there is a light at the end of the tunnel. Just like right now, we just had a failed launch and the stock is at $78. People have been living in this hyperventilation state now for like basically 10 months worrying about FM1. And so we've had it already an enormous delay, but now people can kind of see we're on the cusp, even though I think people do have some reservations on if this kind of 30-day guidance that the company told us about for batch 1 will hit or not. But that's really the wall of worry. And so what I know to be true is the future is what determines the path of a stock price, and you really have to focus hard on what you think that narrative and really what the milestones will look like 6 to 9 months in advance. And NPMN did a nice job summarizing sort of a Bill Ackman-length tweet with the upcoming catalyst, and he points out You know, sort of what I just said is we have numerous batches coming on Falcon 9s, Golden Dome, FirstNet, um, FCC approval of Legato. All you can read the list yourself, an incredible list of things. But then importantly, a lot of things that have already been done. And so that's where the achievement of milestones, it's very easy and, and so rich of the bears to, you know, name call. I mean, I was I thought I had blocked some of these guys, and then when I saw them on my feed this weekend, I started just to, you know, do a lot of bathroom tweets, which are my finest work. Um, just randomly doing ad hominem attacks for really no reason, which is one of the great things about an anonymous account, is I just can punch low and mercilessly without any fear of reprisal. And these guys will just come in with some cheap shots, and they just fail to look at what this company has achieved. And when you actually look at this list of green boxes, that Anpanman, um, highlighted, the achievements are incredible. And when you, when you look at that, there's a reason why this company trades at, you know, a certain market cap. And there's a reason why the market cap isn't as high as it should be. Some of these things are self-inflicted, but there's, there's a path to, to solve those things. And so I get really excited about thinking about what the next 6 months hold And then I'm sure I'll be very excited at that future point about what the next 6 months hold. But that's really what keeps me in the game. And I don't think it's delusional, but I also do have to adjust my mindset for disappointments. And so delays are disappointing. Obviously a failed launch was enormously disappointing. I think like most people, I just kind of got on my flight home and just went to sleep. It was like, I can't. be conscious right now. And so you got to put yourself in the mindset of realizing it's one step forward. I thought, I can only imagine that the team was pretty bummed out, but you got to just put your, you know, big boy pants back on if you want to play in the big leagues. If you want to be mentally weak and give up, that's fine. Stock isn't for everyone. A lot of people already have some nice gains on this and maybe some people want to exit. That's not That's not what I'm going to do. Um, but it's understandable, you know, the mental capitulation that I think happened this week is certainly predictable, and it's usually the same pattern for anyone that's sort of newer to the stock. What happens is, you know, everyone starts to become a technical analysis guy. You're going to start to see me like retweeting all the charts incessantly because I'm looking for voodoo. You have people get testy with each other, and so there's infighting. Everyone kind of the gloves off with Space Mob. Then the bears come out and drop some random FUD. People like me then are in a bad mood and so start to launch again vicious, mean one-liners against these people. Um, that's the pattern, and that usually is, you know, can, could be part of a bottoming pattern. But you never know. But I'm pretty excited about what happens in the next month, especially when those next satellites ship and people realize they're going on a Falcon. But you do have Blue Origin not standing still. And so they were quick to come out and show that their new booster, though it's necessary, is almost ready to go. So again, this is a program that's on pace to add a considerable amount of capacity to the market. And the fact that they were able to land the booster on the second try is still, and then repeat that, is simply astonishing to me. And so the idea that these guys are not going to get their second stage to complete a second burn, I mean, to take, to take the other side of Blue Origin being successful in the very near future strikes me as a really bad bet to take. So I'm a, I'm a Blue Origin believer, but almost like Brendan Carr. Felt bad for us is, of course, right after the launch failure, Brendan Carr approves our SCS application. And so supplemental coverage from space is a very important FCC approval. It's in fact the one we've been waiting for forever. Uh, it's been 5 years in the making. The bears, when you go back, uh, and look at the FUD around this issue, Oh my God. The scars we have from this, of all of the experts saying this company was totally screwed, doing these parades whenever language would come out that would seemingly be adverse to AST SpaceMobile, how quickly they were, um, celebrating this company's demise. I just saw someone say that I cut out, so hopefully I'm still alive. Let me just check and see if people can still hear me. You still hear me? All right, so I might actually be talking to myself now, but I'll keep going and just wait for confirmation. But the FCC approval is what enables the partnership leases for the low-band spectrum with AT&T, Verizon, and FirstNet. This is ultimately access to the world's biggest telecom market and a, from what I can tell, basically an impenetrable moat because it not only enables their spectrum, but then the access to the customers. And AntPayman just pointed out that when people say, oh, I can't hear you, Cook, on the Spaces, they're just trying to get in my head. And you know what, pretty effective psyop right there. So nice try, but I got friends. But this, this SES approval is really the thing. And we've been speculating on this forever. And so I still remember when I was having my initial calls with some of my hedge fund buddies on this, and it must have been in early 2021. Yeah, I remember they were like, oh, we're going to wait until we get visibility on the FCC. And I was like, yeah, yeah, that makes sense. I'm just going to like take the risk on that. And I thought we'd have like FCC approval sometime in mid-2021. And so for anyone that's leaning on me for batch 1 estimates, just beware, I was only off by 5 years. So I think I'll be a little bit better on the timing with batch 1, but I was definitely really wrong on the timing for SCFs. However, it didn't really slow us down. In fact, I don't think it slowed us down at all. Because we had STAs, which are these temporary approvals in the meantime, and we didn't have satellites in air. So everything happens. Stock price has gone up 8x since those worries that I had with, you know, various hedge funds. So you got paid to wait, but now we have it. And importantly, this low-band spectrum is the exact stuff that other people do not have. SpaceX, cannot technically accommodate it, nor do they have it. They only have S-band. And so since 80% of traffic is indoors, low band is crucial because that's what allows AST to penetrate walls. And the competition cannot access low band because we already have our MNO deals. And there's also a technical reason why they cannot access low band. It has to do with the spacing between the elements on the phased array. Which is why our satellites are so big. When you're using high band and S-band spectrum, the waves are smaller, so the elements can be closer together and your, your smaller satellites can then achieve something in that spectrum. But if you want to be in low band, you need a big bird to spread those wings. Um, so the elements have enough space between them so the waves don't interfere with each other. So interesting stuff that I learned, you know, along my journey with, with Katzi. Sometimes it's like so simple. You're like, oh yeah, okay, low band, big wave, need more distance, need a bigger satellite. You're like, okay, sometimes rocket science is actually very elemental and straightforward, not to underscore, but like you actually need a really big satellite to use low band. And we got it. And This really unlocks our revenue model in the world's biggest market, which Scott was very quick to point out in his tweet. Quote, regulatory approval in the world's largest wireless market. This is the prize. We got it. Big deal. Stock cared about it for one day, and so totally classic ASTS. And this when I saw this start to fade on Wednesday, I was just like, oh God. Here we go again, because all the sort of impatient little people that you know expect others to do their work for them, we're going to be like. But I thought this was the big deal, and now it's going down. You guys are all scammers and pumpers, and it's like, look, I'm definitely not a scanner scammer. There are a lot of people that met me at launch, and even Anpanman was quick to say, Cook, your upper body definition is looking really good. Like these push-ups. Are clearly working. And so I've led people on the right path. I said do the push-ups every night, you will get ripped. I did the push-ups, I got ripped. No scam. Truth. I sell truth. And so these, these bears have no idea what they're talking about. And if the stock goes down a little bit on the FCC, it's like the same thing as someone that, you know, is flabby who doesn't do the push-ups being like, whoa, Cook's a scammer. Do the goddamn push-ups. And so, yeah, it doesn't happen overnight. And so the FCC approval doesn't magically change the stock price overnight for reasons that maybe make sense, maybe they don't, but it's a massive enabler. And so now we have quite literally the license to print money. And we're going to get into the spectrum stuff a little bit more in a second. But we did have a good Spaces with Anpanman, which I've quoted out, and I'm sure he said a lot of these things. I actually didn't, uh, have time to listen to it, but don't tell him because I always tell him I listen to all the Spaces and I'm like, um, so amazing, bro. But the reality is, unfortunately, I don't really always have the time. Um, but we also had a cool graphic come out from @ChasingPolaris, which was really cool. So I wanted to highlight this This really cool Space Mob content. It just visualizes the number of satellites at the varying altitudes and inclinations. Of note is that we have this 28-satellite shell at sun-synchronous orbit, which is really a giveaway for a lot of us that we have a very promising military business. But anyway, that graphic is there. And then you would think after, boy, at this point, 7 years of incessant FUD, and then the company gets FCC approval, you would think that Tim Farrar would say, doggone it, Abel did it. I know when I'm wrong. It takes a big man to shake the other man's hand and say, good work, son. And Let's check in on Tim. Did he take the high road? Did he actually show some honor in this world? Quote, kudos to Jennifer for navigating this to a conclusion at the FCC. While the near-term problem remains ASTS's lack of credibility, resatellite delivery, and launch timelines, the big— bigger issue now is the lack of consumer demand for this low-speed D2D service, as Starlink is showing. Holy crap! Like, really? The thing this guy staked his entire reputation on, which was ASTS would fail on the altar of the FCC, and as that dream of his slipped filing by filing, all he can bring himself to do is congratulate our regulatory person Jennifer, who comes from EchoStar, but not even throw a bone and be like. Wow. ASTS got SES approval, which is the regulatory framework that was basically written for them because they invented the category and the FCC singularly accommodated their entire business model by rewriting all of the rules. Holy crap. What an accomplishment. Moving heaven and hell. Probably more impressive than Uber being able to legalize their own illicit pirate taxi business. Oh my God, that would have been the appropriate response from a normal human being, but not Tim Ferriss. He's like, congratulations, you got your license and now you'll go bankrupt because there is no market and you are not credible because you cannot deliver satellites. Never mind, we just launched a satellite and showed it would deorbit. Well, you know, sideshow. But this, you just can't make this up. But that is why we know we're right, because Tim is the counter indicator of all time. And so at least we still have FUD. But people who are a little bit more objective are excited. And so FirstNet is really pumped. There's a cool video out from @GRSpacetime who found, uh, this Chief Morris of CAL FIRE Talking about including LEO satellites, about how AI enablement allows them to really identify things. This is an issue near and dear to anyone in the state of California. The heartache caused by wildfires really can't be understated until you've seen one. It's easy to see something on the news and you see a bunch of smoldering ashes and go, you know, never happened to me. Um, sometimes it can happen to you. And let me tell you, it is super bad and very disoriented, and you don't want to wish this upon anyone. And having technology that can help spot these issues so that you can respond is incredible, and it will save hundreds of billions of dollars of damages and mental trauma. And FirstNet is very excited to be able to deploy this, and I am very excited for FirstNet to deploy this. then we also have things like the MISTIC Act. And so there's a really cool video that, uh, @TheMadMonk found with Congressman August Pfluegler, who specifically gives ASTS a shout out at the Streamlining of Satellite Act. And they specifically talk about ASTS. And this is another thing where if you're looking for a cause in your life, helping avert The mystic crisis, if that is the one thing you achieve in your life, which is saving 100 little girls, then you have achieved more than probably every canonized saint ever. There is no higher cause than preventing what happened there. And so thank God that our legislators are trying to streamline things like this. And incorporate the latest technology so that disasters like this can be mitigated. You can't stop the floodwaters. That's the thing you can't stop. But the response and the time to action is what technology can help. And especially if disaster strikes, helping to find survivors and coordinate rescue response. Is, would be an incredible achievement. I don't think that this is necessarily the best commercial opportunity, but I also really don't give a shit because there's going to be plenty of money to make with ASTS's technology in other ways. But this is the thing that is going to really avert things and it will be sort of like Man in the High Castle. There are going to be 2 realities. One is the reality we will live in, which will hopefully not have the heartache, we'll never have the stories. And the other reality is what is presently happening today where people are dying for reasons that can be averted. And I am very much looking forward to a reality where ASTS really doesn't even get any praises because it worked properly and people were able to get out of harm's way and no one really ever knows what could have happened. And that would be great. And the legislators are jumping on real fast to, uh, do this too. And that's also really inspiring to see. The next thing we had this week is certainly very complicated and something I'm still really working on and debating with other people is this other FCC action that came, which really locks down incumbent spectrum rights. And so this at face level is really just like a hard slap at SpaceX, who is trying to basically sneak into everyone's spectrum by saying like, well, they don't use it. So we're just going to use it. Spectrum likes to take things. They don't like to pay for things. The FCC, with prejudice, which means you cannot come back and retry this because we remember, said no. And so for the licensed spectrum holders on a global basis, that is theirs. And it reaffirmed exclusive use for incumbent licenses, both domestically and international operations. This is good news for the Globalstars, Iridiums, Legatos, and EchoStars. This preserves their rights and forces value to the people who have those licenses, because if other people want to use it, they have to pay or work out a deal. This preserves the idea that Legato spectrum is a scarce, exclusive asset. That is great news for us because by way of the bankruptcy proceeding, we have the lease for it in the United States in the L-band, which is incredibly well situated for very high bandwidth, uh, D2C services. SpaceX's L-band ambitions are dead. SpaceX had applied to use the L-band both inside and outside the U.S., and those were all dismissed with prejudice. This removes SpaceX as a competitor in the L-band. Not good for them. It preserves the Legato and the ASTS partnership. That is good. Where it gets a little bit murky is ASTS was trying to do the same thing SpaceX was doing of basically sneaking in and drafting on other people's spectrum in some of the S-band. And so with ASTS, it was a little bit unclear actually if this was just sort of like a 3D chess move they were playing where SpaceX was taking a legal position which, if it had worked, would have resulted in a spectrum land grab. ASTS appears to have had a reciprocal strategy such that if SpaceX got away with murder, ASTS would too. Where SpaceX gets shut down, ASTS's little backdoor approach to S-band would also get shut down, but ASTS didn't lose the full ball of wax in this respect. And so they have remaining requests for some other S-band spectrum, which the FCC explicitly sets aside for later consideration. And so, but the important thing is all of the competitors are relying on S-band spectrum, MSS, uh, more broadly. None of them other than ASTS Are using terrestrial spectrum. ASTS's business model has always been to use terrestrial mobile carrier spectrum via SCS framework, so the AT&T deals, for example, rather than holding their own MSS licenses. This order does not touch SCS at all. ASTS's commercial service will still run on partner carriers' existing terrestrial allocations. The only thing ASTS lost. Was clean access to some prime 2 GHz international frequencies. And, you know, that's a loss, but they did get an endorsement of their legato type structure where they get to lease and contract on arm's length basis. And so the strategic architecture of ASCS's business, which is really riding on the other licensees' spectrum rather than owning the MSS allocations outright, actually got stronger from this order rather than weaker. And so I'm still trying to learn more because I never really saw how ASTS's ambitions really relied on getting S-band. It really, to me, always looked like a supplement and that the low band that they would get from their partners was always the unfair advantage that they had. And I still think that to be true, but a lot of us are still spending a lot of time debating this and trying to understand the puts and the takes, because it's clearly there's some puts and takes on this. This is not just outright positive for ASTS, and it does look to be just outright negative for SpaceX. And, you know, this is something that we'll be learning a lot more on. The other thing this week, which certainly might have caused people some Back and forth is the AT&T earning call, and so Stankey went out of his way to say, "Quote: We've been working with one satellite partner very closely now to make sure they get off the ground and they're viable. That's AST Space Mobile. We've been putting most of our R&D and our work on bringing product out with what they will be matching to the market. But I fully expect that SpaceX will ultimately have a robust direct-to-device capability." I would expect that Amazon Leo will have a robust direct-to-device capability. And who knows, maybe even a 4th shows up. My goal being John Stanky would be to have a good, strong wholesale relationship. And it may not just be with one of them. It may be with more than one. A plain read of that, you go, oh my God, AT&T might have other partners. And I, you know, I saw people's read on that and I thought, well, that's interesting, but Think about it from a forensic behavioral standpoint. There is a lot to unpack with Stankey's statements. And so he's at some level trying to outright commoditize the satellite layer in this narrative and really elevate AT&T as sort of the platform that collects all these other modular pieces. Well, that's exactly what you'd expect him to say because he's certainly not going to Diminish the importance of AT&T on his own earning call. But if ASTS were genuinely replaceable, he didn't—he wouldn't have said what he's going to say. He would have said we're evaluating multiple partners. He did not. He named ASTS specifically and by name as the one they're actively working with, and said, "Quote most of our R&D." That's a disclosure. It's a very weird thing to say. They don't casually say on their earnings call that we are dedicating most of our R&D to a partner if they think that partner is fungible. You wouldn't do that. And then he also could have described SpaceX and Kuiper as near-term options. He didn't. He used some extremely choice words. He says that SpaceX, quote, will ultimately have a robust direct-to-device capability. If you've ever taken any of these, uh, CIA courses on, uh, forensic behavior analysis, this is a dead giveaway. Ultimately we'll have, and then with, with Amazon Leo, we would expect that Amazon Leo will have. That's an admission that ASTS is actually the only operator with a credible product that AT&T can work with. And so what he laid out is That these others are aspirational, but ASTS is the only one. And then he explicitly said, we're going to help them get off the ground and make sure they're viable. That is a really odd thing to say by a tier 1 carrier about a partner. You don't publicly start talking about how you're going to make sure they're viable unless their viability matters to your roadmap. That's a tell that AT&T needs ASTS to work. And then he also set the ground actually for some very useful FTC optics about effectively saying that there's going to be competition, not out there saying that there's a monopoly. So thank you very much. And then he's of course trying to posture for some negotiating leverage to keep Abel probably in his seat by reminding him that, you know, while we do have 5-year exclusivity, you know, we're going to try to make sure you don't rake us. Fine. But I thought that these comments from AT&T were very revealing about just how important ASTS was to AT&T and what the true state of play is with SpaceX. There were some expert calls this week too with SpaceX where they mentioned they don't have a technical problem, a product. And, you know, they think that they might have something in 2027, but their business teams are really not even focused on it. That the eight, the T-Mobile deal was just a one-year deal that they just wanted to do some proof of concept. But until they have a technical solution, they're not going to be putting a lot more work on it. He does think the SpaceX people do do think that this is a priority for SpaceX. Hard to ever say that SpaceX can't do something again vertically integrated, very talented company, but they don't have it, and they could be late. They have their their plate full. ASTS engineer I sat. with on the bus just reminded me that SpaceX is not the company that they were 10 years ago, which is a good reminder. And then I think we're all very confused about Amazon's viability. Uh, and so, you know, a lot to unpack in that comment. And the next tweet we had is from Only 6 Inches, which is going into this, uh, call that, uh, this SpaceX former employee did. And I was listening to it today in its entirety. But he did just say that ASTS does have the lead and really just expected it to be a 2-horse race with SpaceX and ASTS. They, uh, did note that ASTS does have a pretty interesting advantage with all the M&O contracts, and that's something that SpaceX first needs to lead with engineering and have a product that works, and then they're going to figure out the business model later. And that It seems like a pretty fair valuation. There was some work put out by that sort of doctor valuation guy at NYU on SpaceX. Not going to really get into that because I have no idea if SpaceX is efficiently valued or not. It's certainly an amazingly fascinating company, and I can understand why people are really excited to own it at any price. And it's a big idea, and I think it's wonderful if That humans can do things with private capital like that, and yeah, go SpaceX. But the other thing that's just bizarre is they're buying Cursor. And so we saw this this week, like whoa, whoa, whoa, whoa, whoa! You're buying an IDE. And so to me, it just tells you that these guys kind of got themselves on the wrong path with that XAI acquisition. So they have this. Money suck of all time building out their AI business. They need to do something. They need to generate some front-end usage, probably for all the back-end they have with XAI. Probably need to figure out how to compete with Codex and Claude Code. Who knows? But to say that this company is starting to have some style drift is an understatement. And so this company now having to chew on their AI business. Potentially integrating Cursor while getting Starship going, maintaining their Falcon 9 business, which itself is an incredible feat of industry. And then Starlink, they really have quite a lot going on. It does to me tell you that this, that SpaceX is really going to push this AI narrative and these AI data centers from space. And my, Instinct, unfounded, but instinct is that that's the direction they're going to go if they have scarce resources, that the D2D business can't possibly be their first priority. The only counterpoint to that is just the simple observation that SpaceX has now spent more on D2D by way of the EchoStar deal than they have on the Starship program. So that is a humbling realization to me. I clearly just can't say, well, SpaceX is going to give up. They've spent more on D2D now by way of spectrum than they did on Starlink. But the way in which they use that spectrum, the way in which they can compete, can in fact be completely orthogonal to the way ASTS is competing. So I think there's a lot to be seen in terms of how SpaceX is actually going to deploy that spectrum and whether it's really going to be going to the same commercial markets that we're going toward. So we'll see. And then we also learned a little bit more this week about Amazon's own challenges. And so Deutsche Bank came out just highlighting some of the challenges that they see for Amazon's D2D efforts, including that it's not coming anytime soon. They don't have any MNO partners and no one really understands their technology. They don't know if Amazon has already designed a satellite that can work with DDD. We do not think that's the case. Is it just going to be done by third parties? We do believe that is the case, but no one really knows. So we'll find out. WhatsApp is starting to take a little bit more of a trajectory that squares the circle with their work with ASTS. So Meta is offering a subscription service in WhatsApp. So Redrum picked this up, and it's a 9to5Mac article about WhatsApp Plus, and it's launching soon with new features. Some of these features are kind of silly, like you get your own avatars or whatever, but starting to look like WhatsApp might be its own standalone service without requiring MNOs. Given how WhatsApp is used in markets outside the US, that starts to become an entirely plausible WhatsApp is huge and many small businesses rely entirely on WhatsApp, which implies that a lot of users rely entirely on WhatsApp. So if WhatsApp is connected via ASTS outside of an MNO, that works. And, you know, one must ask whether ASTS is front and center right there and That starts to get pretty interesting for ASTS because they start to have more control over the stack. They're no longer just a subvendor to an MNO who is doing its own deal directly with Meta. All of a sudden, it's just Meta and ASTS ruling the roost in some of these geographies. We'll see how this develops, but it starts to, to show why John Stankey might try to publicly lessen fears. on ASTS dominance to his own investor base, because we don't know how fast this technology will evolve. We don't know the extent to which ASTS as a platform starts to look a lot like AWS did 10 years ago. My belief is that the platform effect of ASTS could in fact be pretty robust. Now let's remind ourselves which is good, that space is hard. So Tanner pointed out, just when we're trying to contextualize all the FUD that's out there, Neutron from the Rocket Lab Bros was set to launch in 2024. Still hasn't. 2 years. Elon said in December that Starship would launch in 6 weeks. It's been over 12 weeks. Space is hard. And so I think anyone that owns these stocks needs to recognize the challenges and the timelines. And I always get pretty put off when the company misses timelines. I'm not put off by the company missing timelines, to be clear, but what I am put off by is people then immediately making accusations that the company is lying, quote unquote lying, or committing fraud or things like that. And it would be nice if the company had more realistic timelines, but I can also see how They're doing the best they can. Maybe they shouldn't give any timelines, but I don't think that's helpful. But what they're certainly not doing is willfully misleading people or lying, because if that were the case, look at every other single space company and it's the exact same story. And so you could hardly say that that is just a common pathological thread across all space companies. They're probably all psychos. To be a CEO of a space company means you're probably hopelessly optimistic, have a risk tolerance of that of a freebase jumper. Those things are all probably true, but you need to just recognize the challenges of doing this and why so few companies have been successful. And if difficult sort of groundbreaking technology investment is hard for you, No one's making you do it. And for most people, this is a completely unsuitable investment. And that's why, you know, I really didn't get very many of my actually like close friends in this. Certainly none of my family members in it. I mean, my God, what a terrible decision that would have been in terms of dealing with all these expectations. It's bad enough now that my dad texts me about the stock price, which implies that he probably bought it, just won't admit it to me. But at least I never told him to buy it. He just sort of got FOMO. But space is difficult and we got a real taste of that this week. And so I'm glad we got a taste of it. I hope that the institutional memory of FM2, Bluebird 7 is going to be when failures happen, there's the weak people that flush it and that's an opportunity for people because then we rip higher. So I hope that's what happens and I hope that's the learning. But time will tell. We also had Golden Dome contracts start to flow this week. And so unfortunately ASTS did not get any of them, but it was also for the space-based interceptors. But Space Force announced that there was $3.2 billion of contracts going out. And this is starting to flow, which is getting to be pretty exciting. So I know I'm anxiously awaiting to see whether ASTS gets some big deals in the future. And I really hope they do, but time will tell. And then the last thing this week is Mickey Mouse rained on our parade. And so Rakuten, whose CEO is named Mickey, has been selling shares. He is a big conglomerate in Japan, has Rakuten Mobile, has a big shopping business, a bank. He's very levered. He hit an absolute home run. on his seed investment in AST SpaceMobile, made a couple billion dollars. He needs that cash for his core business, so he's been selling down his shares in the open market, which certainly isn't helpful. But if you're wondering why the stock has been trading heavy, that is a very good reason because any sort of market maker is just going to know they have sort of a free put on the stock because you have the seller that's going to come in. But they are getting close to being done. And so what I'm really looking forward to is when we get really close to the end of their selling, there's— the stock should start to lift because people are going to know there's going to be a cleanup trade, and that could, that could be a nice pop. And so if we do get sort of like a big burst of strength, it wouldn't surprise me if that's one of the reasons why. And we look back and it's like, oh, that was so obvious. And, um, so just be aware of Rakuten sort of leaning on the stock. And why there's a reasonable chance that once he kind of steps off the bid, then this thing could really torque higher. So that's certainly my personal expectation, but I don't know, I'd bet like 50/50 on this stuff. So that's what we have for this week. I certainly am emotionally exhausted. You know, I was kind of posting how I feel with the Ben Affleck meme I don't smoke, but all of a sudden I was starting to think, I'm like, I don't know, maybe I should pick up smoking. You know, what destructive habit could I pick up to help pass my ASTS woes? But then I decided that I wasn't going to actually invite lung cancer into my life because of some stock market volatility. So, you know, be careful what your habits are when dealing with ASTS. So I decided not to pick that one. Thanks for joining me. Uh, it still shows that no one is here, but I have had confirmation that people can hear me. So it goes to show you that Elon is strapped for technical resources and things are breaking all around, around him. So we'll see if this guy can launch his Falcon Heavy tomorrow, which I really hope he does. Um, might wake up early to see that one, which is launching, I believe, at 7:20. Uh, Pacific, right when I'm usually getting my kids out the door for school. And so that's going to be, that's another kind of big launch vehicle that is actually really exciting to watch. And that's kind of it. So thanks again.
[01:06:12] Speaker A: Thanks for listening to the AST SpaceMobile Podcast. If you enjoyed this episode and you'd like to help support the podcast, please share it with others. Post about it on social media, or leave a rating and review. To catch all the latest news about AST SpaceMobile, make sure to subscribe. Thanks again, and I'll see you next time. 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 NMO. Listen.
[01:07:12] Speaker B: Mmm, waffles.