Anpanman - Potential for US Gov stake?

[00:00:06] Speaker A: This is the AST SpaceMobile Podcast.
[00:00:10] 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.
[00:00:28] Speaker C: Hello everyone. Thanks for joining this ad hoc space. Um, I just decided to fire this up 'cause I wanted to cover this topic that quite frankly, I didn't really prepare anything, but I've just been having some conversations with various people, Kook, um, Tut, and others. And I just figured might be good to just cover this topic 'cause I think It is something that if you had asked me a few months ago if it was possible or if it made any sense, I would have kind of dismissed it. But then I think fast forward to today where we are and given the nature and state of how government, US government is looking at what industries are strategic and what areas they want to foster and protect. And bro, I think this whole idea of government potentially taking stakes in some of these newer space companies actually makes quite a bit of sense, especially in the context of future awards around defense contracts and especially Golden Dome, and just given the timeframe that that actually needs to happen. So yeah, I wanted to have a space and just discuss it briefly. I'm not planning to do a 2-hour space again. And also encourage people, if you have questions or even if you want to come up at some point, that way we can have more of an interaction, interactive discussion. But yeah, what a week, right? I think Cook covered this quite a bit yesterday evening, but, you know, given where the markets are right now relative to where we were Friday after the close, which you know we had obviously AST. Sorry, Bloomberg squawk going off. Let me turn this off. But yeah, AST Space Mobile. Obviously, we were all very excited about the Bluebird Six, which now we know is the only satellite that's on the Antonov, which got picked up over the weekend and it's on its way to India. Bluebird Seven from what we can tell, I think it's pretty close to being done, and that will be on a flatbed truck out to Cape Canaveral. I'm sure we'll get a PR at some point, or maybe perhaps some of the sleuths out there might be able to figure out when that actually ships. But yeah, it's an exciting time. We're on the cusp of launching multiple satellites with the view towards commercial service in 2026. And so So yeah, it's an exciting time to be an investor. I will just point out how amazing this community is. I was thinking about it before I went to bed last night, how when I worked at a hedge fund, there would've been no way that I would've been able to gather the amount of due diligence and intelligence that this community brings. And the reason why it came up to mind is that there was You know, there's clearly a ton of people who own AST SpaceMobile out there, some who are quite vocal, some who are silent. But last night someone had talked about how the Antonov had disappeared from flight tracking after landing in Alaska. And then a shareholder came forward on Twitter and said, oh yeah, you know, usually they turn the transponder off when they're parked and the crew might be, you know, before a very long all day of flying, before a long flight ahead of them, they might actually, you know, bed for the evening. in that particular city. And so you will have flight trackers that are off. And then I think someone asked this person, this who I understand is a stay-at-home mom now, you know, where, what gave them this view? And then this mother said, well, I used to fly air cargo all over the world. And so this is just part of like normal operating procedure. And of course this person also owns shares of AST SpaceMobile. So That's kind of the cool aspect of this community. The level of due diligence and the knowledge base is just so deep. And so, you know, whether that's people who are showing up at, in New Hampshire or Dallas-Fort Worth or Alaska, or of course Midland, taking pictures of the plane as it lands and gets loaded and takes off again, it's just Yeah, it's unparalleled how much brainpower we have in this community. So just wanted to point that out. But yeah, so fast, you know, Friday, the reason why I mentioned Friday is that we're obviously this potential Trump tariff war with China, you know, that got the market on edge. Unfortunately for people who were invested in crypto, which I didn't fully understand Why the drawdown was so bad for people. But then as more stories came out of people getting liquidated and, you know, we could do a whole entire separate Twitter Space on that, but it sounds like, you know, people were leveraged up to 50 times or 30 times on perpetual ETH futures, which is a crazy thing to do given the underlying vol of the assets that you're leveraging. But yeah, with the tariff news obviously sending markets down, we saw AST SpaceMobile trade down to as low as $75, $76. Perhaps there were people who were margined who were selling, but then probably short sellers who thought they were being smart and shorting the hole, not looking so smart today. But as part of that tariff war, there's this, there's been, you know, that caused a renewed focus on these strategically important industries. And so whether that's rare earths like MP, USAR, TMQ, any number of these names. So that's just like, you know, that's the inputs, LAC Lithium, that's just the inputs. But then I think kind of playing that forward, it'd be the government. So the government is clearly trying to foster these sectors that You know, are where, for example, rare earths, we're heavily reliant on China or other, you know, other countries or regions that are unstable. And so what the US is trying to do is help foster what, you know, development of these resources either domestically or in areas that are friendly to the US. And by doing so, by taking economic stakes in these companies, whether I think in MP they actually put in money and got, I believe it was a 10% stake back. And then of course shortly after that, and this is when the stock was I think under $30, but Apple entered into a strategic supply agreement, invested money as well. And then MP went from, I think it was the $20s to where it is today, which is almost $100. But the key thing that the government US government is doing here is that they're trying to help foster these areas that they think are strategic. And, you know, they may not be economically viable today, or they have a lot of risk, but typically for an area that is highly strategic, that's where you have the government step in, where private investors may not want to take the risk, but the government, US government comes in and says, hey, this is really important. It's important to national security, so we're going to step in. and we're going to take an economic stake. And so what does that mean? So in the case of these uneconomic rare earth mines, they can't produce anything economically, you know, relative to where the market is and especially competing with China. But with the US taking a stake and the stock prices trading up significantly, that, you know, that lowers their cost of capital. It also makes the US a de facto kind of backstop for these companies. So if there are troubles ahead, you know, we, some people talk about moral hazard. Like, you know, if the US takes stake in these companies and then what if they do bad things? It'll just teach investors that there is no moral hazard and people take even more risks and then bad things can happen. We kind of went through this in the financial crisis in 2008 where, believe it or not, which I mean, it was for good reason, but when the financial system was on the brink of collapse, the US government had to step in and enforce not by choice, but it forced every bank, regional, you know, large national banks, or pretty much forced every financial services firm to take preferred equity from the US government. The reason why they, the US did that is if you guys, for some of you perhaps that were too young, all these financial firms were failing because it was a crisis of confidence. Like back then, When you had all the subprime loans from houses and, you know, all packaged into CLOs and, you know, basically the entire financial system collapsed when these things started unwinding and of course house values went down. There was essentially a run on all these banks. And so the US government had to step in. You know, Warren Buffett came in, he took a stake in Goldman Sachs and he did And you know, various people were trying to do deals, but that didn't really stem the bleeding until the U.S. government stepped in and said, "We are basically going to act as the financial backstop to all these financial services firms." And so, whether you have deposit at Bank of America or you know Fargo or hedge fund that has assets at a prime broker, you know whether that was. Morgan Stanley or some other firm, your stuff is safe because we are implicitly backing it by taking a stake. And that's what really stopped the spiral downward in 2008. And of course, back then, you know, there was a Democratic— it was Obama who was in power at that time. And, you know, Democrats were in favor of this. Republicans were against it because of moral hazard. And, you know, we don't want government intervention, but when shit really hit the fan, everybody came together and passed TARP. Because, you know, I remember living through that period of time when the financial system was on the utter point of collapse. We really were pretty close to this point where we were going to have to be forced to pay for things with rocks because everything was on the brink of collapse then. The reason why I mentioned that is there is a template for this, right? So you having some level of government intervention or fast forward to COVID, Project Warp Speed, where whether you believe in vaccines or not, the government decided like, yeah, developing vaccines is pretty important to fight against COVID. And so there was funding and easing of regulatory measures in order to make that happen. And so there is a template for this stuff. I know obviously now people are debating whether it makes sense for the US government to take stakes in some of these rare earth companies, which me personally, I think it makes a ton of sense. I think a lot of these companies in terms of the risk of developing these mines and of course the regulatory hair that goes along with it, I mean, Part of the reason why China is so far ahead in terms of rare earth development is that they have lax regulations, or when the state says like, we're going to do this, then they do it and they just push it through. I think given how critical some of these strategic minerals are to the U.S., I think we need something similar along those lines. Obviously not putting public safety at jeopardy, but the fact that if the US government can take a stake in one of these companies and really lower their cost of capital and also get the bureaucrats in Washington to focus on it as an issue to push through these programs from a regulatory perspective, I think that's a net positive. Because I think, I'm not a mineral expert or anything, but when it comes to rare earths, it's not really a dearth of digging this stuff out of the ground, but it's actually the process of taking what you take out of the ground and refining it, processing it to the end product, which, you know, that process results in waste materials and other things that obviously we got to figure out how to deal with. But yeah, so I personally, just given the nature of our relationship with China, I think it is important for the US to develop and its allies to develop Alternative sources for whether it's uranium, lithium, any number, tungsten. I mean, it seems like every day you read about a different mineral that's really important that we don't have, but then the Chinese have. And so I think it's smart for the US to participate in some of these things. I mean, I guess it's kind of funny how, you know, you have some politicians who are anti-clean energy, But now they're like all about strategic minerals. When in fact, I think clean energy and strategic minerals are kind of one and the same. I've talked about this a little bit, how people are poo-pooing on solar right now. But if you look at the demand for AI, we're going to need every single drop of energy from every single source for the next 20 years. Otherwise, this is before some of these modular nuclear reactor companies come online and make that a reality. But you're going to need wind. You're going to need the feared— sorry, the windmills that President Trump despises. I mean, you're going to need those. You're going to need to get hydro. You're going to need solar. You need all these things. But anyway, that's a long-winded intro. The reason why I think— so yeah, I've been trying to get smart on all this stuff and I think Taking a step back, if you consider who our biggest adversary is in space and the importance of space, whether that's related to connectivity, future commerce, but then also from a military perspective, our biggest adversaries are Russia and China right now. And Russia, I think, still important. The biggest, I guess, concern about Russia is that they've developed anti-satellite weaponry and And we all know if there is a, if there is some type of, you know, exchange or battle in space, the repercussions of that is if things get really heated and you have satellites, you know, it's one thing for satellites to grapple each other and take each other out. But if you actually have weapons that destroy satellites, you know, that would be, that would basically shut down space overall, just given the debris. That would be out there. You'd have the Kessler syndrome, as we've both talked about, which is greatly feared. But if there truly is some type of conflict in space, then that would make space unusable, which is, it's important that I think all parties recognize that. And the benefits of space exploration and having assets in space are obviously, I mean, I don't need to educate everyone here, but that's really important. And I think that outweighs The militarization of space. That said, for defensive purposes, especially here on Earth, space is going to play a huge role. And so when I talk about the government potentially taking stakes, what does that mean? If you look at the large primes, whether that's Lockheed Martin, Boeing, some of these bigger names, those companies by default, they're de facto government-sponsored. The reason why I say that is they derive a pretty material, or in some cases a majority of their revenues from the government, whether that's on the defense or commercial side. But for all intents and purposes, they are supported by the government, and I think people fully understand that. But I think where the potential for the US government to take stakes, and it may not just be an equity stake, but it could be also loans, which, you know, for AST SpaceMobile, we've talked about import-export bank loans. You know, I think the reason why the government might contemplate doing so is that space is a critical vertical, or sorry, sector that the US government is interested in. It's a contested area, increasingly contested area where China is looking to dominate. What I mean by that is if you look at China's launch capability, they're the second best The second most capable and best launch provider out there relative, you know, in terms of total tonnage that's sent up to space, second only to SpaceX. And they're continually improving that program. But, you know, China's already, they've already outlined their future where they're already putting up a fixed wireless competitor to Starlink. And then as many space mobile investors know, they've already, at least in terms of graphics, they've already developed an almost carbon copy of the Block.one satellites that they are, you know, who knows like how much of it is vaporware or real, but they've at least made a computer graphic of it. And so they've, in reading the Chinese press, they view direct-to-device as a very critical area, high growth. And so I wouldn't, you know, I would just assume that they are going to put up a constellation to compete. And so, you know, is that a concern? I think importantly, when it comes to the commercial side, there is going to be room on— let's kind of bucket these into 2 areas. One is the Western world or allies with the US. I think Starlink and AST SpaceMobile will be the 2 dominant players of that market. And that's going to be a very attractive market. Obviously, the US market is the biggest. most profitable wireless market in the world. And so, you know, currently AST is working with AT&T and Verizon, and then Starlink is working with T-Mobile. But then extending beyond that, for the Western world, you're going to, you know, obviously MNOs are going to pick between one of those 2 companies. AST has 50 MNOs today, and Starlink now has, I believe, 9 if we count Boost Mobile. And so that's kind of the Western world, whereas I think China will develop their own constellation and they'll service countries that are either allied with them or probably more open to, um, I guess the potential risks, right? So whether that's Iran, Russia, um, you know, some North Korea, and then perhaps some developing countries where they might They might be forced to take the service. Um, as some of you guys probably know throughout history or more recent history, China helped develop mineral resources in a lot of African countries. But as part of that, um, they also forced these countries to take, um, Huawei equipment, for example, or other things, uh, because they, at the end of the day, um, in exchange for development rights, they basically had to become consumers of Chinese equipment. And monitoring for that matter. But yeah, so this area is highly critical and strategic for the US. One, from a commercial standpoint of having global leadership, and I think having AST SpaceMobile and Starlink kind of being the tip of the spear is great because for all intents and purposes, AST is a leader in technology, Starlink, will eventually get there and have a good product too. But I think from a strategic perspective, looking at defense capabilities, AST SpaceMobile has very unique things that it can offer, which we've discussed, whether I think Scott has publicly disclosed that there's, they see 10 use cases that are non-communication use cases for defense. And so we've seen SDA, DIU, All the armed forces branches, all testing and working with AST SpaceMobile. And then of course the big one, which is Golden Dome. Based off of our work, we have reason to believe that AST will be an important, if not critical piece to Golden Dome. And so therein lies the potential, I think, for the government to contemplate taking a stake in the company. The reason why that would make sense, going back to the primes, as I said before, those are large organizations. They get hundreds of millions of dollars from the US government. And they, for all intents and purposes, those are supported and de facto backed by the US government. Whereas I think whether it's AST SpaceMobile, some of these other companies that are kind of newer players, Rocket Lab would fit in that category. BlackSky kind of fits in that category. I mean, BlackSky gets, I think, like over 90% of its revenues from the US government. And so I think they're viewed as grateful. But yeah, so for some of these next-generation space companies, which I would argue, depending on their level of involvement in Golden Dome or some of these other defense contracts, I think they're going to be viewed as important to US national security. And so that's why I think the potential for them to get some type of investment from the US or perhaps loans from the US, I think is pretty high. So maybe if it was like, I don't know, 4 or 5 months ago, again, if you had asked me if this was a possibility, I would've kind of downplayed it. Whereas nowadays I think it's probably like a 20 to 25% probability that the US could take a stake in AST SpaceMobile. And I know like people have pushed back and said, well, you know, if the US takes a stake, an equity stake in SpaceMobile, could that jeopardize some of the work that it's doing around the world with some of these MNOs? Perhaps like, for example, in Europe, AST's working with Vodafone through their satellite co-venture, joint venture to service Europe. And one of the things that they've touted there is sovereignty. I don't think from my perspective, so Satco JV is going to be majority owned by Vodafone. AST is going to be a minority owner. And then of course you're going to have like other European MNOs join that. And then that entity is going to have control over the assets once, you know, when they're flying over Europe. And so, you know, theoretically AST is not going to have the ability to, you know, tinker around with that. They would through this governance process, which It depends on how we set it up, but I think it'll be ring-fenced from AST. So it will truly have, I mean, AST will have board members and they will have the ability to help drive decisions, but they're not going to have majority of the board there. And so I think the sovereignty is going to be, from that perspective, would be retained. And when I mentioned earlier, or in the tweet, that a 5 to 10% stake would be passive, It would just be an equity stake, right? Like, I don't think the government would demand a board seat. I mean, they haven't done that for any of these private entities before, but they would just be, it'd be basically a vote of confidence that this company is important strategically. We're going to take an equity stake because we believe in it. By taking this equity stake, we are in essence, like, you know, reducing the cost of capital for this company that is so strategic that they're working on. Golden Dome and some of these other things for us. And so that's why we are implicitly backing them. And I think that from a US perspective, it's important because if you are relying on some of these emerging companies that are on the cusp of commercialization, you know, the technology's important, but obviously they're not there yet in terms of generating financial They're not generating revenues and cash flows that can support them fully. They still are obviously burning through cash. Perhaps this is a way for the US government to give a vote of confidence, but then also lower their cost of capital. I think, and I tweeted about this before, some people have said, well, What, why would the company take it? What if they, why don't they just like, you know, it's too political, they should just not take it. I don't think the company has a choice, right? Like, obviously, if you talk to management, they'll probably just kind of talk it down or whatever. But if you're, I guess I'd put it this way, the government, if they decide they're going to take a stake in your company, they're going to make you an offer you can't refuse. What I mean by that is, They're going to say, yeah, here's a billion-dollar Golden Gnome Award and we're going to pay you that and you're going to be a critical part of this. But in order to participate, we have to take a 5% passive stake in your company. And, you know, we'll, I don't know, we'll pay for the shares, we'll pay a premium, whatever. But we need a stake because we want to know like what's going on and we want to make sure that your company is going to succeed and we need to have this toehold to let the market know that this company is untouchable. And what I mean by that is whether it's Rocket Lab or AST SpaceMobile, or I mean, you name it, like MP, USAR, a lot of these early-stage companies or highly risky companies, the short interest in all of them were really high. But once the US government takes a stake in your If the U.S. government were to take a 5 to 10% stake in AST SpaceMobile, like, as a short seller, what do you do? You can't be short. Like, it's, it's, you know, if your, if your goal is to drive the company stock price down and, you know, whether it's creating FUD or, you know, there's delays here or whatever, like, the fact that the government is taking a stake in the company has done their due diligence. You know, they've, they've talked with all the branches of the armed forces and space development agency that has already conducted testing with BlueWalker 3 and Black Swan satellites. And they're like, hey, yeah, these guys have it. We need this technology. So I want you to, you know, they talk to the other bureaucrats and say, we need to take a stake in the company. Like, I just don't know how, if you're short, that's like a career-ending move, right? Because, and that's actually kind of what you're seeing today and maybe perhaps over the last week or so is as these investment banks put out these lists, I think it was like Morgan Stanley the other day, JP Morgan today. Not only are they putting out a list of like, here's a bunch of strategic stuff that makes sense for the government to go invest in. And by the way, like we're going to go plow $10 billion of our own into it as well because we agree like this stuff is strategic, so we need to own it and we're going to ride that. That's why I ran this poll earlier today, which is if we were to, you know, if I'm a risk manager at Millennium or Citadel and some guy's running like a $500 million sleeve of capital, a pod, and they have this like 25-year-old analyst who's just hot and heavy that AC Space Mobile due to satellite production delays, you know, the downside is like $10 in stock, you know, go from $90 to To eighty or seventy-five or whatever. I'm a risk manager. I'm walking in, and I read a report from an investment bank saying, "Oh, space is strategic," which by the way, like the FCC declared October Space Month. And you know Donald Trump has talked to talked about how and you know Chair Carr, Senator Cruz—I mean you name it—everybody is like we need to lead space. We cannot let the Chinese. Win that game, right? We need to be the first to the moon. We need to be the first to Mars. You know, God bless Elon, like he's helping in that endeavor, but we need to be leader. And the Trump administration has made that abundantly clear. And so yeah, if you're a risk manager at Citadel and you walk in and some guy, some kid has told his PM like, yeah, well, you should be short $100 million of AST SpaceMobile because I think they're going to miss the, I don't know, launch deadline by a month or two, or maybe they're going to run out of funding in 2 years. You're going to walk in and say, why are we short this thing? Like, tell me, you know, analyst, what happens if the government takes a 5% stake in this company? Where is the stock going to go? You're going to ask, you know, what's the short interest, which I guess as of today is like 42 million shares, you know, depending, I'm not sure how many are ready to convert. Maybe it's like 10 million shares by now, but I don't know, 30 million shares. Like the day that the government announces a 5% stake or 10% stake, or they don't even have to announce it. Like what if Wall Street Journal says, hey, the US government is contemplating potential investments in various space companies. Then like that day you will get blown to kingdom come, and you will have to cover your shares. And so I think you're starting to see some of that movement where people are kind of thinking more broadly because as investors, that's what we're supposed to do. Okay. The government has, you know, when the government took a stake in Intel and MP, everybody was like, oh, okay, so maybe these are like one-off things. Obviously Intel is having issues, but then the government sees, you know, having foundry capacity and obviously R&D around CPUs is important for the U.S. competitive, you know, U.S. competitiveness. Um, and so they took a stake there, right? And it's kind of funny because like, I think the, the Trump administration floated some negative stuff about the CEO of Intel because maybe the CEO was, didn't want to take the investment initially. But then after that, those articles came out and they met, all of a sudden Intel's like, yeah, we'll take the investment. which has been good for Intel, right? The stock is up, the government's made money on it as well. And I do think industries like semiconductors are industries that we should be supporting and investing in. Sometimes people kind of poo-poo and say, well, that's not capitalism. We shouldn't, these industries shouldn't be relying on government funds or backing. But I think it's important for some of these areas that are highly critical and are super risky. I don't know if everyone remembers like the whole development for ASML. I mean, you had a number of large semiconductor players get together and make strategic investments to make ASML's lithography, next generation lithography machines a reality because there was just so much risk involved and capital. that no one player, not even the company itself, could take that risk. Like, it needed a consortium of large players to go put the capital in in order to make that a reality, to basically extend the miniaturization of semiconductors with ultraviolet light. And so here, I think you can argue the same thing for space where, you know, AST SpaceMobile has been blessed that they're putting up this next generation constellation. It's going to launch commercial service in 2026. But then if the US government views it as strategically critical and important, why wouldn't they just take a 5% stake in exchange for Golden Dome Award and other military work that, by the way, the company already has 6 military contracts. And those, Scott has been very open about those expanding from smallish size to then hundreds of millions of size or the potential for that. If this company is that strategic to the US government, then to me it's almost a no-brainer. Obviously, I'm not in government and I don't know what they're thinking, but someone might argue, well, why doesn't the US government do that with Starlink and SpaceX? Well, the US government or SpaceX is by default already US-backed. I mean, that's how SpaceX became so so successful in that they won all this US government business and they obviously, whether that's through Starlink, but also with their Starshield program, they already get a lot of awards. And so they're kind of already past max Q where from a commercial perspective, they're doing just fine. But I think for some of these smaller companies that have tremendous strategic importance to the US. And what I mean by that is not just the military aspect, but also communications. I mean, do you imagine a world where— and today we saw, I think Vodafone had a blackout on its network in the UK. Once AST SpaceMobile is up and running, AST satellites will be able to light up that spectrum and bring service back on during During the dependency of Vodafone fixing their network to get it back up. And so in the US, if a bad actor were to try to take down parts of our network, which by the way, I don't know if you guys saw the news, but there was like, I think when the UN met, maybe it was a month ago, they actually caught these guys who were planning to overload the cell networks in New York City. For what purpose, I'm not really sure, but In that type of instance where cell towers were taken down, having a backup network that can communicate with everyday cell phones is highly important. And so whether that's for a first responder, like FirstNet type of use cases, but also having information if we have another incident or weather issue, having the backup network is critical to national security. And then of course, we've talked about like PNT, like an alternative to GPS, any number of applications. And so, yeah, so that's, I mean, when I talk about it with some of the other folks who are in the space mob, we kind of all come to the conclusion it just makes a ton of sense. That being said, I'm not, who knows if the government will take a stake. But I think the risk is there, risk meaning to the upside, right? And so, and I think you're seeing that in a lot of the critical mineral companies, next generation nuclear power development companies. I mean, any number of industries, right? And so I think for space, this definitely holds true because again, if you take a step back and look at what the US views as critical, strategically and where it wants to lead and an area where China is not at parity yet, but pretty close. That's space and that's space communications. That's, you know, observation, that's launch. That's, that's pretty much everything in the sector. And so I think that's why, you know, whether you have these massive headlines of the government taking stakes in the companies or giving them cheap loans, there's a whole host of things that, that can transpire. And I think as a shareholder, that's something that we should be ready for in case it does happen. And I think if you are short, you should be ready for that too, because it can be career-ending. I think if we were to walk in and I did a poll, actually, let me just see what the results are. I did a poll earlier today, you know, if we saw that Bloomberg Wall Street Journal ran a story that the US government is considering a 5 to 10% passive equity investment in AST, or where the shares trade. It looks like, and I guess if this is just people's overenthusiasm, but maybe not. I think the biggest, the number of highest votes went to $200 or $150, which is basically doubling of the stock, which perhaps it won't happen overnight. And of course, if it's a Bloomberg or Wall Street Journal article, that means it hasn't happened yet. But if you look at like LAC or TMQ, USAR, MP, you know, once there's rumors out there and then once they become reality, you know, in those instances the stocks doubled or tripled. And I don't know what the short interest dynamics were there, but I'm sure that had quite a bit to do with it as well. But yeah, I think the probability is higher than the market thinks. And I personally would view it positively. I know some people don't view it as positively or think it might impact our ability to do deals around the world, but I personally don't think so. As long as it's a passive stake, it doesn't come with board seats or anything like that. And as we've seen with some of these other investments, there really isn't much in terms of strings attached. And I think, as I mentioned before, the whole— before, well, yeah, initially it was kind of a focus around critical minerals and things like that. But then I think the strategic investment in Intel kind of changed the game where it's like, okay, these guys are looking beyond just natural resources, which obviously are risky and require a lot of capital to develop and have to get through regulatory hoops. But now they're moving, they're thinking like much more broadly. They're going above just inputs, but they're going to industries that are strategic. And so, so I think, again, I think the potential is there and something that space mobile investors should calibrate towards. And candidly, I think people should welcome that because it, I mean, imagine like, Yeah, you have AT&T, Vodafone, Google, American Tower, and then of course Verizon last week. You know, I talked about the dynamics where all these companies make investments and signing up strategic partnerships just validates what we're doing. And critically, Verizon to announce their definitive commercial agreement last week basically re-underwrites the entire thesis around AST SpaceMobile because they've obviously looked at test results. They've been working closely together. They also, during, since what, I guess May, the end of May last year, I'm sure they've continued to talk to Starlink and I'm sure Starlink representatives have gone to Verizon and said, hey, you guys should sign with us and here's all the reasons. Look at all this cool stuff we're doing. But even after all that, Verizon still signed a definitive agreement with us and stuck with us, which I think is a big Huge, like, validation for us. So, um, similarly, if the U.S. takes a 5 to 10% stake in a company after, you know, the, the SDA, DIU, um, any number of organizations who, you know, we have what, 6 military contracts with the U.S. government. After all the, that testing and the results that have stemmed from that, um, for the U.S. government to say, hey, this, this company's critical, we're going to take a stake. that would just be a mind-blowing validation, I think, for this company. And so yeah, it would be a big deal. And I think the market is underestimating that risk and I think it's a decent probability. And if we do, I mean, no one knows for sure, but I feel like the company is pretty confident and we certainly are. If we do get a Golden Dumb Award, then Then I think basically all options are on the table, right? Like if the company gets Golden Dome and/or a few other big military contracts, then at that point, you know, I would think the probability of a potential passive stake in the company becomes much, much higher, if not perhaps announced at the same time. But anyway, I've been railing. I'm going to pause there. Let me just take a look and see if there's any comments down here. I do not understand how that reduces the cost of capital. They will buy it from the market, right? Or they take stage by paying premium to AST. Very less solution. What I mean by reducing cost of capital is that let's say the US government, let's, let's for shits and giggles, let's give the US government a 10% discount. Let's say they buy AST Mobile shares at $80. Right. And then AST SpaceMobile, so we just, we gave them a little sweetheart deal. We sold them stock at a 10% discount and then AST SpaceMobile stock price, just to make it simple, doubles. It doubles in price to $180. Well, in essence, your cost of capital has gone down, right? Because then instead of raising additional equity capital, if that's where you decide to go, instead of raising it at that $90, you're starting to raise equity capital at $180. And so dilution is much, much less, right? And The reason why that was accomplished is that the US government has taken a stake in your company and they've given you, you know, the ultimate validation. They've, you know, they're, they're saying your tech works, you're important to us. You're critical. If you have issues in the future, we're going to have, we're backing you from a regulatory standpoint. You know, perhaps you're going to get some favorable treatments, whatever it is, right? Like, but you're, because all that is encapsulated into a $180 stock price, and let's say the stock continues to stay at $180 and you're able to raise, you know, you raise a few hundred million dollars at $180, that means your cost of capital has been cut in half because the stock price has doubled. So at least from an equity perspective, not debt, but equity, your cost of capital has been cut in half. So that's what I mean by that. Let's see. I get taking an equity stake in almost entirely commercial business, but if AST gets billions from US contract, doesn't that give them a vote of confidence and reduce cost of capital, et cetera? Why would there be a need for equity stake on top of contracts? That's a very good point. The US government could just give us a bunch of contracts and the stock price appreciates and everyone's happy. We've been given a de facto vote of confidence. However, to your question, not target, this administration works differently. So they also are commercially interested. And so what you've seen the Trump administration do is take equity stakes because they know that by doing so, those stock prices of said companies are going to double or triple. Then they're able to go to you know, their constituents, the US, you know, the US population and say, hey, look, not only did we give government money to these various companies through contracts, but we actually were smart enough to take an equity stake and we actually made back like a decent amount of that money. Or, you know, and so it's, I think part of it stems from just a political it's a political win for politicians, right? Like they, they were savvy enough. Not only did we help foster this industry, but we took an equity stake and we made a bunch of money. I mean, imagine like the bureaucrats who gave Tesla the original loans, right? If they had taken, they forced Elon Musk to give them 10% of the company, that would've been like the best trade ever for the US government because that obviously would be worth way more than the money that they loaned to Tesla. And so, I think that's where, from a government's perspective, like why they would take an equity stake. Also the optics of it, that if you, if the government is willing to take equity risk on a company, it means that they see the potential is there and they're probably implicitly going to do what they can to protect that equity stake, right? And so there's like some additional tangible, meaty, what that, in terms of what that means or represents to the market. It's just a bit more than just a government contract, right? And so it's like, oh, the government has skin in the game and they actually think there's upside here, which I think, yeah, obviously there's companies out there that get government contracts and people are skeptical and they stay short the company, but it's another, it's like a totally different animal when the government, in this instance, you know, taking a strategic stake, not taking a stake because of a company's getting, you know, in failure or something, but taking an equity stake because they believe in the company. The signaling, I think, is just much more powerful in addition to, you know, the financial contracts or awards that are given. I think we have 8 government contracts now. Okay. I might be behind on this. It's not 6, maybe it's 8. Let's see. Let's see here. Someone's claiming that the hackers or the potential hackers of the of during the UN meeting were likely Chinese actors who are trying to disrupt U.S. MNO networks. Yeah, I mean, I don't personally know. I wouldn't be surprised. But yeah, it just underscores the importance of having. Resiliency and a failover network, which is what AST SpaceMobile is going to provide. Let's see. $90 currently before the BBT launch cadence seems pleasantly beyond what most people envisioned. Where does this put stock price guesstimates at once launches happen, say mid-2026? This is from Thomas Ashford.
[00:47:32] Speaker D: I don't know.
[00:47:33] Speaker C: Your guess is as good as mine. I'm not really sure. As I've mentioned before, I think, and our esteemed friend Professor Mack has talked about as well, I think the market with stock where it is now and over the last, call it 2 or 3 weeks, there has been some short covering, but it does seem that professional money managers, there does seem to be a rerating of sorts where people are beginning to recognize them. And this is what Brian O'Connor, Cook, Permanente Capital has talked about, and I've talked about as well, is that we're kind of now at the point in the story where it's not a matter of if it's going to happen or is there a risk, but it's more like inevitability, right? Like it's going to happen. Like the constellation is going to go up there and service is going to happen. Now we might be wrong by a few months or perhaps even a few quarters because this stuff is really hard, but it's going to happen. And so I think the market is starting to price the fact that this is going to happen. The opportunity's huge. And so once that's kind of the base case, then how does the market discount that, right? Like, is it a market for the skeptics and shorts that are like, hey, you should be looking at the last 12 months financials. The historic financials basically say like, this company hasn't generated anything. But as Ryan O'Connor famously pointed out, like, When they were building the Alaska Pipeline, no one was valuing it off of the existing financial capacity, which was zero. Like they were valuing it off of future cash flows, right? And so it's not as if people built, they built the pipeline and then the day they turned on the oil, that was like, hey, okay, okay, now we can value the company because it's carrying oil now. And so In the same regards for AST, the question is like, are people going to value the company in this potential? Are they discounting it based off of 2026, 2027, 2028? And when you get to those out years, the numbers become really massive, even if you haircut them significantly, right? Like we're talking about minimal penetration rates into subscriber bases of 50 or more M&Os. And so similarly for SpaceX, when you looked at the development of the launch capacity or launch vehicles, and then of course Starlink, it's not as if people were pricing or valuing SpaceX off of what they were doing at that point in time when the company was worth, you know, $10 billion, $20 billion, $40 billion, $50 billion, $100 billion. They were valuing it based off of the potential. where they would eventually get to, which it took much longer than people had expected and for the company expected. I mean, SpaceX famously, when Elon Musk had talked about going to Mars, those initial slides, I believe, showed that Starship was going to be landing on Mars sometime in 2022. Well, guess what? We're in 2025 and we're still quite a long ways away from from that becoming a reality. That said, SpaceX is now worth close to $500 billion. And anyone, the skeptics will say, well, if you value it based off of current year revenues and profitability, it doesn't make any sense. But yeah, sure. Like no one is valuing Starlink or SpaceX based off of this year's financials. They're basing off of what the potential the company can do in 2 to 3 years, right? And so the funny thing about like rates in an intraday environment where rates are really low and the discount rate is low as a result, and perhaps there's more liquidity sloshing around the market and people are becoming more enthusiastic about the prospects of any number of sectors, they start to discount further out. like, okay, I'm going to instead look at 2026 or 2027, I'm going to start looking at 2028 numbers. And so yeah, it's a good question. I'm not really sure. I mean, I think, I do think we have the ability to get to north of 100, actually relatively sooner because I think going back to something around the launch campaign, now we're going to be launching Satellites every, once that starts, it'll be one, a payload every 1 to 1.5, or sorry, 1.5 months on average. And so there's going to be something tangible for investors to get their arms around. And obviously once those satellites start opening up and people start underwriting the economics for each satellite, then I think you're going to see this continued unlocking of valuation and what that means. And I mean, God, like if we get Golden Dome or some of these other military contracts, then that opens up a whole, like a true another segment. You know, we have 3 verticals, commercial, the commercial business with MNOs, the government business with first responder networks, and then of course defense. But, you know, if you were to get a few hundred million dollars or whatever it is from, for Golden Dome, which then can grow into much bigger numbers, what does that mean? And how do you value it? value of that piece of the business. And so let me just take a look here. Our current market cap is $33 billion. And perhaps I think maybe the market was discounting or rewriting the valuation partially because of, as we all know, Legato, that got bankruptcy approval not long ago. This was just a few weeks ago. And whether you value Ligado at $15 or $20 billion, you know, depends on obviously the economics they're able to extract from that spectrum, which I think is going to be very high. And so if you had a residual from that, if you take out that piece of what that spectrum was worth commercially deployed, then you've got what, $10, $15 billion of equity left that's built into AST SpaceMobile's stock price. Like, How big is the Golden Dome business? Like, is that, if that generates a few hundred million dollars a year, what is that worth? Or, um, if we truly are able to provide a secondary backup to GPS for PNT services, like that in of itself is a few hundred million dollars a year. Um, and then if you're able to generate a few billion dollars a year in subscriber revenues, which are highly recurring, you know, from mobile subscribers and have very high margins because we don't have loaded costs like customer support, service, acquisition costs. We don't have any of these things. Our M&O partners are going to bear all that. So what is that worth? And so I think it's a long-winded answer to say, yeah, the stock, mid-2026, I could easily see it double from here, right? Or possibly even higher, or maybe it'll be a little bit higher from here, but it's hard to Kind of triangulate because I think it really depends on how quickly the market understands the opportunity. And that said, we've been very fortunate that the market is starting to understand and is starting to get priced in, as they were to say, which some people say, some folks out there don't, they think everything's priced in, but in reality, I think that's too simplistic of an answer. But anyway, Yeah, that's, that's, that's my, that's my answer. Let's see here. Just looking through some of these questions. Ah, interesting. Somebody, Dylan here, asked Grok, what do you estimate the odds of the US taking a passive stake in ASTS to be? This is what Grok said, based on current partnerships, With the DoD SDA DIU and precedents like US stakes in Intel or MP Materials, passive stake in AST is plausible for strategic reasons like network resiliency. I agree with that. However, no confirmed plans exist. I'd estimate the odds at 10 to 20% with high uncertainty. High uncertainty. Okay. So yeah, I think, I think I would err on higher probability. I'd put that more at 20% and depending on How some of these contracts unfold, that probability goes even higher. But it is kind of cool to see that Grok agrees to some extent. So anyway, that's kind of it. Oh, let me see some people who I've never seen before asking to come up. So I will bring up a few people and let's see what they have to say. Let's bring up Jack Capital here. Hello, Jack. Are you there? You're on mute. Jack Capital. Jack, you still with us? Can you hear me? Yeah, I can hear you.
[00:56:33] Speaker D: Hello? Okay. I was curious what's— I've been a longtime follower of your page and you made me a bunch of money. But anyway, thank you for that. But what is your sort of ultra long-term, like, what do you think this company becomes? Like your super long-term thesis, is this going to be sort of like equal in size? I'm not asking for specifics, but are you seeing it as equal in size as SpaceX Starlink or just your like 10-year, 20-year, what you see for this company?
[00:57:02] Speaker C: Yeah, I think over the long run, AST, I think the key thing for people to understand is this company has the potential to be the largest wireless carrier in the world. With, you know, with over a billion subscribers. I mean, that's the opportunity, right? And so what is that worth? It could be worth 10x, you know, the market cap it is today, which will put it at $320 billion, right? Or it could be more than that. And so what are people willing to pay for that? And so that's what I think the long-term potential is. Now, does it take 10 years to get there? 15 years? I'm not sure. I'm not sure how long that will take, but I think that's what the opportunity is. And so for a company like this where you have an install base of mobile phones that can be lit up and service be provided through MNO partnerships, of course, to subscribers, whether that's on an ongoing basis or a one-off basis, yeah, the potential is huge. I don't think that there's been any other businesses quite like it. I think Piranha, who's down below, has talked about Netflix growing to a few hundred million subscribers, everyone paying $14, what, $15 a month. Perhaps that's kind of a similar example, but I think that's the opportunity where this company has so much white space and runway. And it's not just, you know, for the regular observer, they just think about consumer applications, but they don't think about defense or government. And so, I mean, just look at Netflix, the market cap is $518 billion. So yeah, I think those are the types of numbers that eventually we can, you know, this company could get to. That's how I think about long-term.
[00:58:52] Speaker D: Got it. Got it. Thanks for that. And just one last question just regarding this, potential US government stake. Do you think that— so let's just make an assumption that if US does acquire that 5 to 10% stake that we've been talking about, does that materially affect— and this is just, I guess, very crazy thinking, but does that materially affect acquisition odds from something like an Apple, etc., if they see the US government acquiring, like taking a little stake? And then just what are your thoughts on that?
[00:59:25] Speaker C: It depends if the acquirer is friendly to the US and the US is okay with it, then I don't think that would impact it. But then I think AST is very unique in that it does have a high amount of strategic value, but the value is also remaining neutral. And what I mean by that is if Apple acquires it, then perhaps like Google will feel threatened and maybe they won't play as nice. And that's why, for example, the company has its dual-class ownership where Abel controls the company. They did that to keep the possibility of some interloper buying shares in the company and forcing, whether it's a hedge fund or maybe another corporation, forcing the company into a sale. But I think for a company like Apple, I think the US government would probably view them positively and allow that to go through. But I think, you know, a foreign entity, if you had aspirations that perhaps a foreign buyer might be able to buy the company, that would certainly be off the table if the US took a stake. But I do think the highest value and use case for the company is not to be owned by Google or Facebook or, sorry, Meta or Amazon or Apple. I think it's to remain independent because the nature of what the company's doing, which is serving as many MNOs as possible and as many Companies like Microsoft, Amazon, I mean, all these companies need connectivity. I think remaining neutral is going to be important. Now, that doesn't preclude them from taking strategic stakes, which is what they've done in the past, right? American Tower, Google, Verizon, Vodafone, AT&T have all taken investment stakes, Rakuten, and that's okay as long as there's no majority owner or someone who has undue influence. Um, and, and so that's why I've always, I've always poo-pooed the idea of the company ever selling because the real value is remaining independent and serving everybody.
[01:01:29] Speaker D: Yeah. Got it. Got it. Thanks for, uh, thanks for that. That's my, that's my final question. Thanks again.
[01:01:35] Speaker C: Yeah. Thanks for coming up. Let me see. There's Mateo Jones. I'm going to bring them up. Okay, let's see. Maybe it's not working. All right, well, I think they are not going to come up. They're having connection issues. But actually, I'm now looking at the clock. It's 2:17. I actually have to hop soon. We got to go pick up the kids. There's no school today in New York, so there's various camps going on. But But yeah, thanks everyone for joining. I hope this was helpful and spurred some thought for everyone, something to think about, which is the fact that I do think the company itself is highly strategic and important to network resiliency, communications, both growth on the consumer side, but government and military side. And so I think As we follow the development and focus of US government on space as an important sector, I do think the possibility and probability of the US taking stakes, and again, that doesn't necessarily just mean equity, it could also mean loans, quasi-government loans, whatever it is, right? But I do think perhaps We shouldn't be surprised, like when some of these Golden Dome contracts awards go out. And again, this is partially to secure US interests as well. I mean, if you're going to dole out a large award to a company that still is pre-revenue and is on the cusp of commercialization, but you want to make sure that they're going to make it and you have their complete attention to focus, you know, not only do you dole out a big award, but I think Perhaps to take a stake in the company as well. And so, you know, we'll see in the coming weeks. I do, you know, unfortunately government shutdown, I think it's delayed awards, but we should be learning about some of these awards, whether it's related to Golden Dome or some of these other contracts. We should start seeing those in the coming weeks and months. And yeah, it's something to think about. And I bet we will see the US government take additional stakes in other sectors. And so as an investment theme, I think it's something to be aware of. And whether you're speculating on some companies that seem like they should be critical to US interests and perhaps they might be good candidates, that's an emerging theme that I think probably everybody is spending extra time trying to think through. the next companies that might get a round of investment and what second and third order effects are. I mean, you name it. But anyway, but yeah, I hope this was helpful and we'll talk again soon. I'm sure there's going to be more news, which I expect. You know, I've mentioned this before, there's some additional commercial agreements that could come to fruition. I think Bell Canada is probably on the top of the list, Saudi Telecom, a few others. But yeah, any day now. Which, you know, it's an exciting time to be an investor. Anyway, I'll cut it there and we'll do this again. Maybe there'll be some news today, tomorrow, this week, and I'll have to run another space. But so thanks again, everyone joining. I hope it was helpful. And until next time, take care.
[01:05:11] Speaker A: Thanks for listening to the AST Space Mover podcast. If you enjoyed this episode and 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.
[01:05:35] 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 We are the company that has proven technology to deliver cellular broadband connectivity directly from space to the everyday smartphone. People will just basically turn on their phone and be seamless regardless of where you are. We don't want the user even to know that it's connected by satellite. Our role is to bring this into reality, always in partnership with the NMO.
[01:06:11] Speaker A: Listen.
[01:06:11] Speaker C: Mmm, waffles.