Kook's Weekly - November 16

[00:00:06] Speaker A: This is the AST SpaceMobile Podcast.
[00:00:09] Speaker B: It will just basically come to your phone and be seamless regardless of where you are. We don't want the user even to know that it's connected by satellite. Listen, the opportunity that we have is very, very, very large.
[00:00:28] Speaker C: Good evening, everyone. Go Birds, I guess, for, for those who partake in the tush push. I didn't watch it that carefully. I watched it a little bit. And I did point out to my son, I was like, hey, Kook Jr., that's a tush push. And he looked at me thinking this is one of the 500 things that Dad regularly lies about, including monsters under the bed and other things, which my wife is like, Why are you telling the kids there's monsters in their closet? My philosophy is if you blatantly lie about things that are absurd, you disarm fear itself. And this is why Child Protective Services has been called about 15 times to my house where my kids call 911 because they say their dad says there's monsters in the closet. But anyway, the tush push is a very valuable lesson because it really is about The benefit of being able to squat 600 pounds and basically do whatever you want in life. And this is really a story that Abel took a lesson from because he, like Jalen Hurts, decided that he wanted to have a trunk the size of a redwood forest. And now he does because he has $3 billion of cash, but we will get to that in a sec. But first, let's talk about Monsters Under the Bed. And so if you want to understand what it's like to be one of my children, and for example, last night we were camping when my daughter and all her little friends were going to bed in a cabin by themselves. And I said, yeah, you know, just, just watch out for the lady in the old cabin, or I forget what it was like the wandering lady, which is of course some made-up story about some scary lady that wanders at night and abducts children. And of course then the children all pulled their mattresses off the bed and slept in the middle of the cabin to protect themselves. And, you know, I view this as good training for my children because how else is a child going to learn how to take 40% drawdowns regularly and realize that, yeah, there is a monster. It's called the stock market and it's spooky and it comes out every couple months and basically causes most people to lose money and do the wrong thing most of the time. So now let's visit a little Tweet from @ToughForYou, who is a kindred spirit. This person seems like he also takes joy in trying to terrify his children with absurd stories to desensitize them and make them tough so that they also can buy the effing dip. And so @ToughForYou, we're leading with this. This is quite an accomplishment for anyone to be the lead story on The Cook Report, which of course is a highly esteemed parody. Weekly. This is in fact seemingly following real life, but to protect myself from legal liability, I will continue to say it's a parody account. But we have this interesting chart which shows these 40% drawdowns, which suck. Anyone that claims sort of false strength of like, oh, I like the cheaper price. I don't know, man. Like I don't, I'd rather it just kind of went straight up after I bought all my shares. But these 40% drawdowns are brutal. And I've always just kind of tell myself, this is where you separate the men from the boys. is it's easy to lose perspective of these things. And a lot of this drawdown, you know, it always kind of coincides with a financing, but a financing usually coincides with a peaky market. So it's kind of hard to have, you know, a causal factor totally defined, but the market's obviously being thrown into this sort of AI bubble narrative, which is an interesting debate unto itself. And I don't, know that I have a totally strong view. It certainly seems to be following in the track of the 1990s fiber buildout, but you kind of had to participate. It's a little bit of the Citigroup Eric Prince or Charles Prince, can't remember his first name, but where he said you kind of have to dance while the music is going. And these hyperscalers, you know, can't really take the bet of stepping aside. And the market then is looking at all this money and, you know, it's credit funded and, you know, blah, blah, blah. Anyway, so it takes down the market in its entirety. ASTS doesn't have a whole lot to do with this. AI seemingly will exist. Whether the ROA on that investment by the hypersailors is good or bad doesn't really matter, I don't think. Well, actually it does, you know, to the extent the ROA is bad, all the more reason why these guys are going to clamor for ASTS so that there's more connectivity and therefore more opportunities to use AI. But I digress. And so you have these 40% drawdowns. Usually people are pretty beat up and sad. I'd say that right now the sentiment is surprisingly strong for ASTS. I think people now in this echo chamber in particular, you know, the people we convene with have been through this so much that I think we're no longer really fazed by it, which is not to say that the decline isn't over because some people would say, well, then, you know, if there isn't, you know, Cook throwing himself out of a window, there isn't a kook bottom, therefore the stock must go lower. I don't think that's true. Um, but I'm physically broken and I've been sick for a month, and so I've channeled the negative ASTS energy as, as I often do. But I think you have more people in this space mob community now that really understand, like, hey, this drawdown is kind of like the September-October boogeyman striking again, admittedly striking in late October and November, kind of an AI correlation kind of crap. You know, a little bit of a delay we'll get to in the earnings recap, but generally I think people see that this is kind of a normal shakeout to take the heat out of the market. And that is, you know, unfortunately trees don't grow to the sky. Wish they did. You know, I for one was actually really bullish at $100 per share. I thought we were going to potentially go straight to 140 or, you know, really make a move. And that of course was exactly the top, but I think we will revisit that pretty soon. So let's get back to fundamentals after we just contextualize that these 40% drawdowns are actually pretty regular. You know, a lot of fortunes have been made by people who saw these corrections as times to really grow their position if they thought it was appropriate. I'm not saying that that is Right for anyone or everyone. It certainly was how I certainly changed my life by doing that, admittedly $2 to $3 per share, which I recognize is different than $60. But in the context of time, buying it $60 might look a lot like $3 per share if we're right on this thesis. So let's get to the thesis. So ASTS reported earnings. Last week seems honestly like a lifetime ago. I have to scramble. I'm like, was it really earnings this week? My God, that sounds like, seems like a long time ago. But let's do a quick recap. I guess let's actually just do a recap with myself. I gave 2 links. One was with ASTS Investors, which is one of my favorite accounts. And the other link I gave is with yours truly. And I'll just kind of go through my own notes because I'm more familiar with them. And so first of all, you know, the big things we already knew is the company going over the commercial accomplishments that they had. So they signed Verizon and they signed STC, Saudi Telecom. And it really just gets to the point they're making of we have a big, big market. And they were really adamant with an important point that they are working through Their big backlog of DAs. And so this is a really important point because then you can start to say, well, we have 50+ M&Os we have LOIs with, yet we've only signed a handful of DAs. And they're signaling to us that this is going to start to be kind of wood that we're going to chop through. And so as I practice with my son, who cannot say this yet, the question the market should ask is how much wood would a woodchuck chuck if a woodchuck could chuck wood? And the answer is a lot of wood. If the woodchuck were ASTS and the wood were over 50 MNOs to penetrate over 3 billion users, the woodchuck would continue to chuck the wood. As the initial operations of the initial constellation became more clear, and it became time to start getting those prepayments. But where the woodchuck would not chuck wood is where an MNO is more distant, potentially on that chain, and you would really just rather wait to chuck the wood when they start to see the whites of our eyes. And that's when you can probably start to get the best deals, but it's happening. And so the other thing that Scott said probably like 4 or 5 times, it was really pretty clear that he was trying to get our attention is this $1 billion of contracted revenue. You know, what have you done for me lately, Scott? Seriously, dude. A billion dollars. That's all you have and you haven't yet begun your service. That's literally uncontracted revenue for ants. Except actually then when you think about it, sure, my expectations might be running ahead of themselves. A billion dollars is pretty crazy, especially since most of that is from STC. So they didn't give a breakout, but you can kind of figure it out. We got some disclosure from STC, but the fact that they said this is minimum revenue commitments. So when that STC disclosure came out, You know, the fundsters as usual said, oh, Clueless Colt is, you know, misinterpreting this, blah, blah, blah. And, um, turns out, no, we did not misinterpret it. Apparently it was a minimum contractual revenue guarantee. That's crazy. So that's a lot more aggressive of a commercial posture than I was anticipating. I always thought ASTS was going to be sort of heads up. We take the risk. It's all variable. If people don't use it, we don't get it. This starts to sound like they have revenue floors, and that is different from what my expectation was, and that is better than what my expectation was. And the other obvious corollary from this is very, very important. This starts to mean that you have a bankable revenue base. What does that mean? Well, bankable means a bank will look to it for credit support. What does that mean? Credit support means they made a loan to you and they're looking to understand if that loan is good or not. And where you have minimum revenue floors, that is good. And that means that lenders are willing to lend to you lots of money at low rates. And people are like, well, cuck, they said they're fully funded. Well, I go back to my point of this, you know, things can exist in 2 states simultaneously and not be at odds. And I think as they showed in the call, They are fully funded and they have been for various milestones they previously guided to. So they can be fully funded for Block 1. They can be fully funded for the first 25 units. They can be fully funded for continuous service of 45. They can also then be fully funded for the full constellation of 100. Then they can be fully funded for multiple shells, which include Blackbirds, et cetera. They can be fully funded, yet continue to raise capital because then they're upping the ante of what they were fully funded for. And that seems to be something that a lot of investors sort of missed or didn't really understand along the way this year as we kept on raising money. But then as you read carefully, they changed the definition of fully funded. Fully funded for 45 satellites is very different from fully funded for 100 satellites. And so then you might say, well, then what are they going to do next? Well, Ex-Im Finance is a very obvious thing they talked about for quite some time. And when you start to have this type of minimum revenue commitment, the bankers at Ex-Im are starting to salivate because it's just an easy thing to do. They want to give this company these debt guarantees, which is how Ex-Im works. Basically, Ex-Im gives— I forget if it's AAA wrap, but Ex-Im is a wrap. And so it basically gives credit support to a loan package that is then financed and funded by commercial banks. The commercial banks then look to Ex-Im as a guarantee of that debt in addition to the creditworthiness of ASTS itself. This is how cruise lines have funded themselves over time, things like that, Boeing. Um, this will open up additional capital so that ASTS is one of the best-funded space companies in history. And the $1 billion of contracted revenue in part is them saying, look at how awesome our business model is, you know, noted Scott, good work. But it's also a wink wink on the credit capacity of the company, which then goes to non-dilutive capital that's on the way. And they're making good of that process. STC was good non-dilutive capital. So then importantly, and the thing that's really going to drive the stock, we're stepping back What were the things that really caused the revaluation of ASTS over time? One is, did the technology work at all? And so it's, and that was really the progression of the R&D experiment. You know, could they unfurl BlueWalker 3? Yeah. Could BlueWalker 3, uh, you know, complete the link budget, do various, um, thresholds of communication, whether that's a 3G call, 5G call, video call, things like that. Then we had Block 1. And so then it was, could Block 1 work? Could they support basically more complex operations, things like that? The answer is yes. What was the spectral efficiency going to be? And so as, you know, I think people became very confident in the R&D experiment. We've had Department of War tests that show full end-to-end completion of the system. We had each of the MNOs test it on their own core, which is different than ASTS sort of mockup core. That's, you know, great, wonderful. That's good for a certain amount of dollars per share. Then you have the diffusing of the financing short thesis. So will this company, you know, go bankrupt? Will it be able to fund itself? And then as the company, you know, raised an unimaginable amount of money, frankly, then the financing thesis evaporated and people will go, okay, well, clearly the question in the market is not going to advance. It's That's done, done. And then you have the commercial thesis. Well, will any of these MNOs actually sign up with this company? You know, we heard, we read from Tim Farrar that they're all going to ditch ASTS and go to SpaceX. You know, easiest short thesis in the history of mankind, except for it was wrong. And so none of the MNOs ditched ASTS to go to SpaceX.
[00:15:42] Speaker B: Whoops.
[00:15:42] Speaker C: Short thesis. You know, you get what you pay for when you pay someone $2,000 for a report. You should expect advice that's worth $2,000 as opposed to listening to a parody account that you pay zero for. Turns out that parody account did its work and cited a bunch of other super smart people that were right. And one of life's great inconsistencies is actually the $2,000 report you paid for cost you millions and millions of dollars of opportunity cost. And the free parody account that shitposts all day, uh, turns out to have created an untold amount of millionaires. So. I don't know what the advice is in life. Basically don't really overthink it. Um, you know, Tim Ferriss doesn't really make his own work available so you can test it, whereas I do. But I digress. So we're talking about kind of really the unlocks of value. And so even if tomorrow, if ASTS announced Golden Dome, would we all communally have morning glory? Yeah, we would. As Elon would say, but that's just more revenue backlog. We've already done a lot of that. So yeah, stock would go up a ton for sure. But ultimately people are looking, can this company build satellites and are they on track? And we continue to shake out that production. So the stock obviously rerated massively when they put out the press release on September 30th, I believe, about FM1 shipping and FM2 to ship in October. Well, you know, check those. It's November 16th. So I could see how the market is apprehensive and saying, well, okay, hold on. What is this satellite production rate actually going to be? And I'm sure, I'm actually not sure, but I'm very convinced that FM2 is an issue of just coordinating with the ultimate launch vehicle. We had John Stankey come and visit and sign it. I'm not concerned about FM2. I think they're going to keep these things in Midland as long as they can. And so once the launch vehicle is ready, then they're going to start to coordinate these things. But otherwise you keep these birds in Midland to be testing and doing everything possible. But they said Bluebird 8 through 19 are on track. 40 satellites will be done by year end '26. Expect to exit 2025 with 6 satellites per month capacity. That's a big milestone that these guys don't need to hit, but if they hit. It's a big deal for the market. And it's really, as I said, it's all about bird production. And we're supposed to have Bluebird 6 launch in the first half of December. So that's really coming up. And Bluebird 7 will ship in November and launch shortly thereafter. And importantly, the ASIC chips will be integrated in Q1 2026. Once the market sees ASIC Bluebirds Shipping, launch, unfurling, and communicating, you've really advanced down, you know, that old Monopoly checkboard and you're starting to put hotels on Park Place, no longer sort of on Baltic Avenue. And we're getting within striking zone of that. And that I think is really where then the stock price sort of shifts into whatever The final gear is, I'm thinking of ASTS as sort of like a nice 7-speed PDK transmission. And then we're finally able to say, okay, we're going to take this thing from 100 miles an hour to redlining it up to 200 miles per hour. You know, we're finally on that last track. And so that, that Bluebird production is huge. The other thing they really kind of opened eyes with, in my view, is this spectrum discussion.
[00:19:20] Speaker A: Yeah.
[00:19:20] Speaker C: And so they closed the legato spectrum. Everyone should know that. But then interestingly, they told us something we already kind of knew, but they said it in a different way that really woke me up, for example. They said, we have 80 megahertz in the US alone. And so then guys like Tanner, I think some others, but Tanner specifically really went and put pencils down, pencils up, and started to figure out how to triangulate that 20 megahertz, 80 megahertz. And, you know, they're getting to be pretty big in the US. I got to do some, um, yeah, check my notes because I actually did some work on this earlier. But when you start to look at, I'll pull it up actually while we talk. When you look at ASTS actually versus one of the major MNOs, it's actually starting to look a lot like one of the main carriers in the US or certainly a baby version of it. And, um, that 80 megahertz, if I'm, this is where I'm just trying to check my notes. I think the US carriers have like 250 megahertz, something like that. And let me just see what I did. Yeah, unfortunately, I think I just hard plugged this in my numbers when I was looking at what the revenue per megahertz was for AT&T and Verizon. And just as a proxy for Legato and monetizing their spectrum, but if you use that sort sort of benchmark of how much revenue per megahertz AT&T can generate per megahertz, which is a quarter of a, was it a quarter of a billion dollars? If you apply that same rubric just to ASTS for the US, excluding any other opportunity outside, then ASTS would have $20 billion of revenue generating capacity On the spectrum they've already secured in the U.S. These are big boy numbers. Now, whether that proxy is the right way to think about this, I don't know. It's just a proxy, but you could argue it both ways. ASTS should be able to, and this is gross revenue, ASTS should be able to monetize more than the average revenue per megahertz of AT&T because AT&T has a lot of commodity spectrum, commodity service versus this is premium. This is what Vodafone in their interview really said is This satellite-enabled spectrum is very scarce, very premium, should not be the same price point as normal terrestrial. So that's when you start to think, well, I wonder if Cook's little back-of-the-envelope calculation is dramatically conservative. We'll find out over time. But the important takeaway for me is you start to see that there is potentially not a pot of gold at the end of the rainbow, but a pot of whatever is more valuable than gold. I was going to say diamonds, but diamonds have depreciated so massively because of cubic zirconias that analogy doesn't really hold up anymore. But needless to say, the Spectrum Treasury Company thesis is alive and well. And this is where I believe that NAV-type investors will start to go crazy when they figure this out. Never mind that ASTS then drops this bomb of we have 1,100 50 megahertz of global spectrum that's tunable with our global MNO relationships. So that's different than spectrum they control for sure, but it's showing just the enormity of the opportunity in terms of their spectrum capture. And when you break it out, and I believe I have this elsewhere in my weekly, when you break it out, the spectrum they have is largely the Ligado spectrum and then FirstNet spectrum. It's just little teeny peanuts. Of the AT&T and Verizon spectrum. I believe it's 2.6 or 2.8 megahertz from each of those, just tiny little slivers. So that's going to grow massively as the service comes online. The theory was always that AT&T and Verizon were just going to put in this little slivers for approval, not to upset the apple cart, but then later once the service is up and as they're using the capacity, they'll grow that. And so it's very exciting for ASTS. Because they are really in the spectrum alchemy business and the company is starting to frame it in a way that TMT kind of telecom investors will really understand it. The first time they started to really give you numbers around their kind of aggregated spectrum control, which is really exciting. So then we look at launch. They gave updated launch guidance. Things kind of slipped about a month. But then we're compressing in the back, back part, which means that, you know, there isn't really global slippage. You just sort of, as they shake down this initial production, so they have to hit that. You know, you, it's one thing to say, oh, things only slip by a month. Well, you gotta make sure they don't slip by yet another month and another month. So there's, there's pressure on these guys, but it really does look like the, there's light at the end of the tunnel for production. And then they talked about how we're going live soon in the highest Pirates markets first. That's great. And they kept on repeating this one billion dollar aggregate revenue commitment. So it's a powerful validation of the business model, and it also provides a framework that other other people will follow. Until STC being the first deal announced probably means that the other ones in the future are going to be better, not worse. Satco continues to expand, and it really looks like it could potentially. Potentially could sweep Europe and have almost, you know, all or vast majority of the MNOs sign up, as well as getting IRIS Squared, which is the sovereign European constellation, which could be many, many billions of dollars of revenue just for that opportunity. And so the spin-up of the ASTS money machine is something we're really starting to see Front center, and you can only imagine over the next six to nine months it's going to be a crazy pace of development. The company continues to get interest from the U.S. government. They see no change in the trend of a U.S. focus on space. They won another contract, and they said, "Quote, they plan for long large contracts going forward." I think all of us are really hoping that means Golden Dome now that the government is open. Maybe we'll start to see some more things come in terms of going down. Andy Johnson's done a great job and so showed us that they have $3.2 billion of adjusted liquidity. And importantly, the average cost of the satellite guidance has remained constant. It's the same $21 to $23 million range that they had in Q1 2025. So things are under control. That is important for the market to know. And they really reiterated a lot of the other prior guidance they had in terms of what the initial 25 satellites will mean and things like that. All positive to hear. And, you know, they give some, some more details around how they generate liquidity, but importantly, they're now fully funded to manufacture over 100 satellites. And again, an important point. When people say, well, I thought they said that, uh, they were fully funded and then they diluted me and oh my God, it's a crime against humanity. Well, take a report, sit down. I don't know if people understand the take a report reference. It was like this Citigroup industrial analyst that ran a secret anonymous account, which was absolutely hysterical back in like 2013, and then was discovered and got fired. So there's the risk of running anonymous accounts. But anyway, the key point is we want to be fully funded for the biggest opportunity the company could reasonably be in a position to seize. We do not want to not pursue an opportunity for lack of money when the money is not creating meaningful dilution. And so we want these guys to be in a spot where they can grab everything. We want a monopoly. We want to kick the ever-living shit out of SpaceX. It's as simple as that. Um, and we want to just basically cause any would-be competitor to stare in a mirror and hate themselves because they have no chance because this Goliath ASTS is going to destroy them like marauding Vikings. And the company with its balance sheet is in a great position to do that. So. They can cross and really part the sea at this point. They're on target to execute their plan. So then they also dropped this cool thing, this AI spectrum multiplier. Holy crap. I'm assuming other companies are innovating in the same way, but it just shows the power and the scalability of this company into where we might've previously thought maybe there's a spectrum limitation to how much data they can process. What they're showing is that these systems are going to be far more scalable than even the optimistic people like myself could have imagined. And so if you can create more spectrum, you can create more revenue for yourself. This is exactly what happened to Verizon when Charlie many moons ago was trying— Charlie Ergen, I should be more clear— was trying to hold them hostage to buy all the Dish spectrum. Verizon said, we don't like being held hostage. Thank you very much. And so then they started doing more densification with 5G. I forget the exact term, but they basically figured out a way to multiply their spectrum using the then available technology to do so. And that allowed Verizon to scale its revenues more capital efficiently, or at least without the constraints of spectrum than it otherwise previously thought possible. And I just present that as an analog to what AST is telling us they're going to be able to do, which is going to be great for our overall opportunity and just shows you the general innovations in the market and specifically the innovations by ASTS SpaceMobile. So I think that really covers our earnings review. Now, if that wasn't enough for you, I realize some of you, you know, need all things SpaceMobile. I gave you the link for and Panman's spaces on the topic. And then I talk a little bit more, you know, when I'm looking at my posts, really just about this ASTS spectrum treasury concept. And we just make one highlight. Uh, Katzi, of course, was first this observation, but it really goes into the understanding of band 14. And band 14 is the first that spectrum. And so ASTS is integrating Band 14 into the supplemental coverage point space. That's all in the FCC filings. And so AT&T can use this spectrum for general users. So basically for commercial users, when Band 14 capacity is idle, and then it can automatically preempt that commercial use if and when public safety demand rises, which is exactly how the FirstNet network works today. And so this is a stroke of genius because it effectively through AT&T and FirstNet and ASTS being clever together, was able to create 20 megahertz of commercial spectrum for use by AT&T when it's not in need to be preempted by FirstNet for commercial capacity without having to build out all the towers and things like that. Really smart stuff. And it just goes to why ASTS is so loved by the MNOs. And this we'll get to in a second about the Vodafone call. Um, but when we talk about the AI spectrum multiplier, that's one thing. Another aspect is just to remember not to overthink it. Now, who am I to give advice, but You might want to just reflect on this tweet from @LukeTradesASTS where he just, he or she, Luke, probably he says NVIDIA makes the chips that run AI. ASTS connects the devices that use AI. Don't overthink it. This is how, this is how I think about it as well is you got to think about the value chain. You've seen the security price movements as people realize, I think we've talked about this, you know, oh wow, they need a lot of chips. Oh wow. They need a lot of data centers. Oh wow. they need a lot of DRAM. Oh, they also need a lot of power and blah, blah, blah, blah, blah. And so now we're going to have all this stuff and people are going to want the connectivity because the use cases for AI are going to expand massively beyond all of us using ChatGPT. You're going to have all these AI-enabled robots, drones, things like that. These things are all going to need to have positive control and that's going to require satellite network that is ASTS. And This is a really exciting place. It could of course be a terrifying place because this is also what gives rise to Skynet. But what I understand is that Skynet will spare all of those who can show positive ownership of at least one share of ASTS SpaceMobile, is at least what Scott told me once when he tried to get me to own those shares. So now let's think about the march toward Golden Dome. It sure seems like there's progress. And so let's go revisit our friend at Tough for You. Sorry, Tough for R. And so this person, I believe, has a military background just based on the nature of their posts. I don't actually DM with this guy very regularly. I probably should, but it seems like someone that knows what they're doing. And so there's just more data he's picking up on in terms of what they're negotiating. And so he's convinced this, a lot of the stuff we're seeing is this SDA Halo program and that this is a precursor to, to larger things. Now we'll all find out, but the march to Golden Dome seems to be well established. The new thing we're looking at, you know, what's, what's more fun than one hike? You know what I say to my kids? 2 hikes. So the other march we're going to go on is toward Iris. And so Iris squared is again this European constellation. I've written on it previously because the original, the original idea that Europe had was super dumb, almost as dumb as the creation of the euro itself. But the Iris squared idea was basically like how to make all these countries happy. So like, let's get a little German contribution. Let's get some French contribution. I don't know. Why don't we have every European country that previously fought? To the bone in a war, trying to create one integrated constellation, and then not think about the economic case. That seems like a great mandate from Brussels, and that's what they did. And of course, it's basically dead on arrival. And then you know, and scene. Vodafone is sitting there with this incredibly powerful satco system, gobbling up all the MNO interest, already testing this thing in Malaga, already having Facebook using it. Da da da da da. And so Satco just seems like it's primed to take Iris Squared and the press releases out of Vodafone and ASTS all but tell you that they're either gunning for it or already want it. With the talk about the data sovereignty, which is a recurring theme, the command switch, the fully European setup, all this stuff, very exciting to see this progress. For all I know, Iris Squared could be a bigger deal than Golden Dome, which is not to diminish Golden Dome. It's just that Iris Squared could potentially be as big or bigger because it's also going to wrap in FirstNet and things like that. So keep an eye on that. But then the other interesting part of this is how those SATCO, Iris Squared, whatever we want to call it, is also leading us on a journey to potentially grab a lot of this European 2 GHz spectrum. And so Vodafone is going to be in a very interesting spot. The people that currently hold the spectrum, I believe, are up for license renewals in May of 2027. And so I've quoted 2 links from Dr. Mike. When in doubt, always trust the doctor. They went to medical school, which is why they're perfectly positioned to tell you about spectrum, of course. But ASTS is a very interesting spot. And when you think about it, what's happened? ASTS has basically grabbed spectrum in interesting ways through Legato, which was basically 10 cents on the dollar to get their spectrum or getting it effectively for free with partnerships with MNOs. Now, by contrast, SpaceX paid $22 billion for their spectrum. That's what it's like to be lonely. You gotta pay for companionship. But if you just ask people, may I meet you? To quote the great Romeo of our time, Bill Ackman, you just never know. Maybe you get the spectrum for free. And so ASTS is really sort of the Bill Ackman of spectrum. They're just going around all slick and saying, listen, May I meet you? And honestly, it's like, just take my spectrum. Whereas SpaceX has been like, yo, what's up? You want some drinks? Like, want to go back to my place? And people are like, uh, yeah, I'll go back to your place for $22 billion. You know, it's a pretty woman in the extreme. And it's really interesting to see this divergence in spectrum strategy and I would just say that I am pretty, pretty, pretty excited about how our strategy is unfolding and the possibility again, and I don't say this facetiously, you know, as a parody account, I feel like I'm a very serious parody account. Well, I, I don't know anything in the future, just to be clear, but I do see Founder thinking. That's one thing I think I now understand in my life. And I understand if someone sees a path for something big. Now, will they hit it? I don't know. But I do feel like I'm pretty well equipped to understand if a founder has a vision and they see a path that the rest of the world didn't see or thought was stupid, but they see an opening to do something big. I see ASTS having a path to become a $1 trillion company. Again, I don't, it's not a price target. Um, but I, but I see how Abel understands that he can go for it, run the gauntlet and get there. I see how Scott sees the cards on the table and go, I almost have checkmate. Like there's a path. And this spectrum strategy is so fascinating to me. Because you could really see the world wake up, the world being investors wake up and go, goddamn it. These guys basically became the black hole where all spectrum wanted to go and they didn't have to pay for it. You know, as Isabelle said, it's a price no one can afford. But when you say, may I meet you, as it turns out, again, you just don't know what you're going to pick up. I just wish I had had this insight when I was in my 20s and instead of like going on Match.com and getting iced. And so, you know, here we are. But anyway, speaking of people with big plans for date night, uh, I would suggest that you listen to this interview by Vodafone, Luke Ibbotson. I listened to this when I was driving up camping. Of course, my daughter really loves it when we head up, you know, get in the truck, and she's like, all right, Dad, let's bond. And I'm like, yeah, let's bond. Let's listen to a 15-minute interview with the head of group R&D from Vodafone. And she's like, where do I get a new dad? She can't, she's stuck with me. But I was like, look, it's very important to learn a little bit about RF engineering. So she, she listened. But this Luke Ibbotson interview is great. It really, again, talks about the architecture. They're not trying to pick a winner. They just literally picked the winner. And I think that's a nuance is they weren't trying to put anyone in business. They were just looking at all the solutions and ASTS was the good one, and they're really excited about it. So really, please listen to that. And then we have a lot of other upgrades. So I've linked out all the sell-side reports. Appreciate those of you that send me to this. You know, I always ask for permission before I share it. When I see that Anpanman already posted it, I'm always just going to link him out so I don't ever accidentally post something that's watermarked. But we've got B. Riley, we got Deutsche Bank, we got Roth, we got BAML. Then we have a fireside chat with Bammel, which is interesting. And I'll get to that in a sec. Then Anpanman has done God's work by organizing all this sell-side research so we can really understand what we have. Sometimes, you know, I say it here, I'll say it again, Anpanman is an AI from the future. We're very, very blessed to have him. And then it's interesting, and I don't want to dishrag on Rocket Lab. But I will, is you have this dynamic of like, did the market just move away from these guys? And so let's just take a quick visit with Mega Constellations. You have this interview and Mega Constellation calls them out saying that they're not spending billions on spectrum, yet they're looking at tuck-ins and quote, big needle-moving stuff. And so there's speculation that Iridium and Rocket Lab might actually kind of have a shotgun Because both companies might have kind of found themselves outplayed. Iridium just was a classic example of innovator's dilemma. They were sitting there, they had, you know, a cool little cash flowing business. And so, you know, the guy probably went to Harvard Business School night school and it was like, hey, I went to Harvard Business School night school. I should pay some dividends and buy back stock. And look, it's capital allocation. That makes me smart.
[00:41:27] Speaker B: No.
[00:41:29] Speaker C: makes you pretty susceptible to disruption. And so, you know, it's what you get for not thinking. And so the guy embarked on a capital return strategy, right, as the world was innovating, and then they find themselves basically unable to catch up. But they are left with some valuable assets. They have, you know, again, $500 million of EBITDA. And they have some spectrum. And so there's a possibility Rocket Lab, which I don't know why Rocket Lab stock is up, honestly, when looking at what's happening with Blue Origin, you just have to ask yourself, like, what's the opening? And I'm sure Rocket Lab people have a great response for that. But, you know, as someone who doesn't really, I have no ax to grind in this. I'd be thrilled if Rocket Lab was a super successful company to provide more launch, but I'm just kind of struggling what I'm missing here in terms of what looks to be a crowded market for launch. And then the key with launch is you gotta have some captive cargoes. Like that just seems like that's a pretty established part of the strategy here where SpaceX can always fill a rocket. So that means that their rocket refurbishment facility and their booster production can be running on overdrive because they always know they can Shoot those up, and that means they can absorb the costs. And that's very important in a business like this. And then you have Blue Origin, which is going to have a lot of Kuiper cargoes, has already stacked it with a bunch of NASA work, things like that, stacked it with AST SpaceMobile. Now I think we actually really do know what congratulations meant. Um, as much as I was hoping, and I'm not saying that there won't be a strategic investment, but I really now I'm understanding the magnitude of what Abel did. Abel effectively vertically integrated with Blue Origin on a contractual basis to get massive amount of launch. That's what congratulations meant. He basically, through the stroke of a pen, got his own Starship without having to work on it for 10 years and blow billions and billions of dollars of risky R&D and the whole professional apparatus required to do something like that. That's what you do if you're a Bell. And that's why Adriana said congratulations because he got his own rocket company on Prime Day where they were giving it away. That's my view. So anyway, then I digress. So this is where my point was, the stragglers are going to start to have to get really creative. Now, some people might appreciate the irony of me linking Pierre Leonet, who I previously have disragged relentlessly in earlier sessions of the Kook Weekly. But again, as a parody account, I have really no need to be consistent. And so I'm willing to just say when I disagree with this guy and when I do agree with this guy. I think he's kind of a Luddite when it comes to understanding disruption. I think he's got kind of the classic legacy European view of not really liking these American companies that come and disrupt their businesses, which I can fully appreciate, but that's life. And so that's when I think he has somewhat of a narrow view when thinking about things like ASTS, but I think he has somewhat of a realistic view And other times in here, when he's looking at the Rocket Lab quote, he says, disturbingly vague approach. And he quotes Rocket Lab, building our own constellation and whether that's providing services or infrastructure, I think is yet to be determined, which is a quote from Peter Beck. And, um, I think that just goes to these other companies. Again, nothing overtly negative to Rocket Lab. I'm not trying to piss off the hornet's nest. But I'm just trying to state that I do believe the market is now seeing that there are really some winners that are breaking away from the pack. SpaceX is the incumbent. That's the, that, you know, that's the Secretariat, the beautiful horse everyone knows. And then I think what is becoming very clear is the ASTS is really the actual breakout for LEO. And then the launch guys have this problem of as LEO and the cargoes are effectively spoken for with SpaceX and AST Space global, there's not a lot of room for other cargoes to go up. And if there's not a lot of other room for cargoes to go up, it's really hard to underwrite your own launch capacity. And that's going to leave people in the lurch. And now again, I think Rocket Lab will be at least, maybe they're successful and to a breakout. Don't know. Don't really care. But I do think that they're going to be at very least sort of like the AMD of 2010, that no matter what, they're going to be kept in the game because the government, for example, wants diversity of supply and everyone wants Rocket Lab to be successful at the Department of War. I could almost guarantee you that. And so then we're really just isolating the debate to the magnitude of their opportunity. And that's where I think they seemingly are being outplayed in a market where people who are specializing at certain things are going to break ahead versus companies that kind of now have to be jacks of all So now speaking of things, uh, where a company specialized, holy crap, this Blue Origin launch can bring grown men to tears. This has to be one of the most beautiful things I've seen. I vividly remember when the Falcon Heavy went up with the Tesla Roadster crying. And I don't, you know, it's, it's a weird human response. Like, well, Cook, why'd you cry? You know, did you have like a—
[00:47:18] Speaker A: Yeah.
[00:47:19] Speaker C: Polymarket bet saying it was going to blow up? No, I didn't. I cried because it, I think, you know, for a lot of people, myself at least, when you see this stuff, you kind of realize the enormity of the universe and the trivialness of the human state. And it's just unbelievable that we're going to space like this. It's just so cool. And, you know, it's, you think about what this means for your children and things like that. It's just so exciting. To be alive today. And these pictures are unbelievable. And frankly, the livestreaming of these launches, whether it's SpaceX or Blue Origin or others, the wave of emotion of the people working at these companies, I mean, if you're not affected by this and getting caught up in it, then maybe you gotta join Bryan Johnson and try 5 grams of mushrooms and, you know, talk to God. This is, this is inspiring stuff. But most importantly, never mind just how cool it is to watch these teams do this. I just can't begin to imagine the complexity of this. This has big ramifications for AST SpaceMobile. And so they now, now I think I have a pretty clear picture of this. Congratulations on what, you know, the meme we have with Ariana standing there. Ariana, for those who are newer to ASB Space Bubble, she's the daughter of a billionaire telecom executive who sadly passed away last year or this year. She's in a picture with Abel, our fearless leader. And then Jeff Bezos, who some of you might remember from a book company that he built, like Amazon or something. But he also is CEO of Blue Origin for anyone who hasn't heard of him before. And, um, they're all smiling together, positive body language. They just concluded a deal. This had been tweeted out or Instagram back in May, and we were all speculating, well, what, congratulations on what? And now we know that AST has contracted something probably like 30, 40 plus satellites to go up on Blue Origin. So they bet big. That this rocket was going to be the first big boy rocket that was going to be operationalized. And, and they were right, as it turns out. And so if you missed it, Blue Origin not only had its 2 for 2 orbital success rate, and so 2 launches, both times they hit successful orbit. Very hard to do. And then what was so amazing this time is they were actually able to land the booster in what had to be one of the most dramatic things the space industry has really seen, watching this thing course correct and hover like 200 feet. And so what this allows is a more rapid scaling of Blue Origin's operations, even though they have a lot of boosters in production. They could have easily lost this booster and it wouldn't have been a problem, but it just shows that they're going to be on a faster path to scalable launches and economics that are going to be very compelling for Blue Origin, which allows them to have lower prices, which benefits all the people who have cargoes. This successful launch is a big deal for diversifying access to launch for people like ASTS. But again, it's also very important to remember ASTS is going to be a prolific customer of SpaceX. And they also can launch on the Japanese rockets, the European rockets, the Indian rockets, and others. Until they're really going to be in a nice position in the next couple of years with lots of diverse launch vehicles to use, excluding Russian and Chinese supply, which puts them in a really good spot. On the other end of the spectrum, while we have this really exciting development with Blue Origin, we did get an update from Deutsche Telekom, and we'll end on this, about the Starlink satellites. They're going to utilize the new spectrum. These satellites are now looking like they're going to be delayed to 2028 or 2029. And so this is pushing back SpaceX's incremental response to ASTS by 3 to 4 years from today. By then, never mind that SpaceX doesn't have any MNO contracts, by then ASTS should be the very clear dominant provider in the market. already a well-oiled machine, cash flowing, providing very effective and efficient services to MNOs, gobbling up deals with all of those MNOs, and more likely than not advancing on their product roadmap to have yet more advanced satellites than we presently see. So my point has been for quite some time, when people say it's not going to be one player in the market, there's going to be multiple players, I always feel like people are insinuating that ASTS is going to be a minor number 2, an AMD from 2010, for example. My view has been and continues to be, we have really strengthened every day, that ASTS is going to be the winner take most in this market. And they will be the strong number 1 and that there will be a distant number 2 in Starlink. That will provide some D2D service as well. But then there's very unlikely to be really even a distant number 3 or 4 player. Maybe there's some of the Link OmniSpace thing gets cobbled together, but I think you're going to have a market structure looks like that looks like that. There's a lot of analogs where there's markets that look like that. And I do, you know, it's very important to, when you see the guy that is going to be number 1, To appreciate what that can mean for value creation. And I think, you know, as we said before, I increasingly see a path where these guys could, with a straight face, say, we've got internal milestones where if we hit 'em, we've got a path to create a trillion-dollar company. And that type of vision, I think, is something that Abel could be sharing with his partners and executives with a straight face. Has something to execute upon. And it's really incumbent on us, the investors, to do the work, to do the diligence, to find companies with that type of opportunity before it's commonly understood. And maybe we're wrong, that would suck. But if we're right and you stick to your conviction and you survive these 40% drawdowns, which is the concept we started with, and keep your eye on the ball, the result can be pretty fantastic. And that's really what I hope, you know, my contributions to, you know, people who right now are on, you know, online with me late at night, my contributions can be to share my work, my path on this so that others can form their own opinions and hopefully increase their conviction through shared work and community to ride it out. Because the stock market will always be volatile. Most people will get knocked out because they're tricked by the vol. They think something's wrong. And that's how the market makes it so that very few people get rich, which is really, you know, the way it probably should be. So I'll end with that. I'm excited for another week. It's week before Thanksgiving week. So maybe this is when some news gets flushed out because I can't imagine that there's a whole lot that's going to happen during Thanksgiving week, but leave it to AST SpaceMobile. I'm sure they're going to paint the tape with a bunch of exciting stuff on Friday. When retail's bored and eager for news. But, you know, there's a real chance that we're gonna get shipment of FM2, which I do believe could be a big excitement for the market. Just a reminder that these guys are executing, even though, you know, it's a little bit of a delay in terms of the press release we were all expecting based on earlier guidance. But it doesn't mean they were actually delayed. There could be a lot of reasons why they held the satellite back. In terms of timing against the launch vehicle, but just market doesn't know that. And so clarification of that through some, some PR, which, which again could be happening any day, I think would be something to look forward to. And then also the, the comeback of the government and what that might mean for Golden Dome developments is another thing that's really high on my list. I'll end there. Thank you everyone for joining me and I'm looking forward to another exciting week. Bye.
[00:55:46] 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.
[00:56:09] Speaker B: We're doing something very, very big, and I think with this technology we can really affect billion lives. AST SpaceMobile is the only company that has proven technology to deliver cellular broadband connectivity directly from space to the everyday smartphone. People will just basically turn on their phone and be seamless regardless of where you are. We don't want the user even to know that it's connected by satellite. Our role is to bring this into reality, always in partnership with the MNOs. Listen.
[00:56:46] Speaker C: Mmm, waffles.