The Space Industry's Next Mag-7 Moment

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[00:01:00] Speaker C: Good evening, everyone. Thanks for joining. I'm just trying to get reacclimated. I was, I was off the grid for a bit, um, but when I came back, the first thing I did is, is run and check the TLE data. And so I'm actually just rechecking it again because obviously what I don't want to do is jump the gun. But when, um, when I saw this, we had had Some interesting data from a day or two ago, I guess Friday when I was doing my fast, which by the way felt good, I guess when it was over, but not that great while I was doing it. But the fast ended right as there was some extreme movement in the satellite. And so I'm clearly not a satellite technician as everyone could probably guess, but I also have a subscription to AI services. As other people could also probably guess. And so I've been scrutinizing this a lot and trying to make sure I understand it from all angles. I think as most people know, you can't just put something in AI and say, hey, what happened? Because that's just not really how you get the best result from it. You have to be able to challenge the models and really try to yourself understand it to do appropriate analysis so you don't get the like, oh, you're right. That mushroom was poisonous, as you're dead. And so the conclusion I had come to over the weekend, I was kind of doing this around a campfire too, is the most obvious conclusion from BB11 is that they had some difficulty when deploying it. And so difficulty doesn't mean disaster. Difficulty means difficulty. Um, I had difficulty cleaning out my tent today because the sand is hard to broom out. I persevered, but it was difficult. I had difficulty getting my Chevron app to work when I was trying to put gas in my truck, but I persevered. So lots of things can have difficulty in unfurling one of the largest telecommunication satellites ever built by mankind can sometimes hit a snag. And so what, what does that mean? So what we found out is BW-3, you know, from 4 years ago, actually had problems. Uh, apparently one of the bolts didn't fire or something, and the thing was spinning in space. And could you only imagine if they had 8K'd that sort of real time of business update? Our sole test satellite, for which if it doesn't work, we'll run out of cash and go bankrupt, is Spinning uncontrolled in space, but we got this. And shareholders would not start tweeting, "We love the transparency. What a great management." People would have lit their hair on fire, and people would be pouring kerosene on each other's hair to accelerate the conflagration of hair. And so, as it turns out, the company just wrote some new software and then successfully deployed BW3 again four years ago. And so. I was looking at BW11. There are a lot of computer— there are, you know, it's not resolved. There's a lot of competing theories on the satellite. Uh, Katzy had a lot of very credible and potentially correct views on testing of station keeping and the spacing of satellites, all sorts of things which all of could be true. Another explanation for this is that the satellite got stuck. And that's potentially the, the easier explanation. And then what is interesting is if a satellite is stuck in unfurling, it's not like the entire team goes, oh my God, we never contemplated that this stowed array might not unfurl perfectly. I wish we had thought of that possibility at some point in the design cycle. You know, of course they thought about this. And so do I know all the tricks of the trades to undo it? No, I do not. But what I do know is that when ViaSat had some of these issues, You can shake a satellite, you can kind of try to unjam it. You also run it through a lot of thermal cycles, as I learned. So heat, cold, heat, cold. It's kind of how I fix everything in my house. It's unplug it, turn off the fuse, turn back on the fuse, plug it back on. It's kind of shocking how I can almost fix everything by just flipping a fuse switch, cutting power, letting it reboot, and letting it go back. So it seems like that's kind of what they might have done here. But in any respect, the data is starting to look very promising. It doesn't look 100% totally sure that they unfurled, but it, but it might have, and that's exciting. And it also might be stuck, and that would be exciting in a different way. And so if it's stuck, what does that mean? One is that the flight data is also showing that it's a team that still has control of the satellite, it's station keeping, and they got options. And they might just be, again, running it through thermal cycles and, and we'll figure it out. Uh, it could also then be stuck partially deployed, in which case it's about as powerful as a Block 1 satellite. Not a disaster, but not great. You would learn as to why that happened. And then the third possibility is that it's busted and you deorbit it, and that sucks. But It's also like a $25, $30 million— you know, you gotta think about what the actual cost is, not where the long-term cost is. It's a $30 million mistake on a, you know, what do we have, $25 billion company. So again, not, not a big deal. And then 2 of the 3 would have been successful, and of course then that yield will go up higher because you'd fix it. So it's interesting to look at. I truly hope that it successfully deployed, but what we also believe is that the next batch shipment is shipping now or Monday. And so I hope that happens because that means then the Falcon 9 launch queue has cleared. I think as many people know, Crew Dragon really ties things up and there's a Falcon Heavy, I believe. But Crew Dragon really jams things up because a manned spaceflight is sort of— there cannot possibly be an error ever for any reason. Period. And so it's just a different animal when SpaceX is launching people into space, as one could imagine. So that just sort of jams up Cape Canaveral for a bit until that's cleared. That should be launching pretty soon. So then that means the manifest starts to backfill. That's what we're seeing. And that would mean that they would then have visibility and the go-ahead from SpaceX to move the satellites to the payload processing facility. So that would be, I think, a big relief by the market, ironically, right as the shorts have absolutely maxed out their positions. And so again, I track my stock loan very carefully and usually it's kind of unremarkable. I'm like 60% to 70% utilized, kind of back and forth. I was kind of surprised Friday when I was checking my trade reports, I was 100% utilized. I mean, these guys are now maxed. And so usually what happens is they max out their short and then bang, the momentum flips and then it's off to the races. But the Crew Dragon traffic jam should be just about over. And the other traffic jam is the one of our own making. And so there's signs of complacency in the stock everywhere. We've talked about this a lot. It doesn't mean a stock goes up when there's complacency, but it's a useful thing. And so CATS, it's a useful thing to track. Katzi was looking at the posting activity on Reddit. And so Reddit is really terrible for your mental health, but it's also a really good proxy for human emotion. And so you can see this very strong positive correlation. Stock up, people post a lot. Stock down in the doldrums, posting activity is just dead. No one cares. Everyone's burned out, moved on, blah, blah, blah. And then you also see that Reddit is one thing, but then a much more quantitative assessment of this, which I prefer, is just looking at implied volatilities. It's just collapsed. It means that people are not winging calls. There's just overall complacency. If anything, people are starting to get bored, and so they started selling premium to kind of pay their bills, things like that. That's another thing to be pretty cognizant of. No one can ever predict where a stock is going to go, so I think I've made that pretty clear. But you want to be pretty aware of what the general conditions are of a company and the market. So for a company, say for example, you're frustrated, which would be like me, you're bored, which would be like me, you want some money, so do I, and you go, yeah, I'm just going to make it happen by selling some calls. So I've done this historically and it is an absolute catastrophe in this environment because as soon as the sun will rise, You'll sell some calls and think, okay, I generated a couple of shekels to tide me over. Then the funniest thing will happen. Vega, which is the Greek in options pricing related to volatility, is the thing you're short. Then implied vol starts going up and you start to just eat dirt on those calls, ignoring even a stock price move. Those options start to expand in your face. So what the what you sold for 50 cents all of a sudden is magically a dollar. They just inflate like a hot air balloon. It's really a crazy thing. And then the deltas start to go up on those options and people start getting excited. And then the stock, as it's shown, will just start to go limit up. Every day it's up. And if you're short calls, it's the most frustrating thing in the world because you just go, please God, just give it a break. Just be flat or down a little bit. Let me just get out of this. And it just doesn't happen. It will, it will rip your eyeballs out. So be really careful on that. But then also look at what's happening around us. Out of the, out of the blue, a company whose logo is blue, AT&T, starts advertising more connectivity, fewer satellites, you know. The demand for this is very large. I was with a guy camping this weekend and I was just hanging out with him a second ago. He's got this really awesome Dodge Ram RHO truck. And I was looking at his— I forget what it's called, that metal bar in the back. And he had this Starlink mounted to it. And I was like, hey, that's cool. You have your Starlink. He's like, oh yeah, I have to have that. I don't have good Verizon service, so I have a Starlink on my truck so I can have data. It's just crazy. And so think about that. He paid, you know, whatever he did, $1,000 for that terminal, had it professionally installed on his truck, wired with power and everything, then paying the monthly fee so that he can have data connection on his truck, not RV, his truck. This guy will, will pay $10 a month. That's what I know about that. And so then we have Only Six Inches again very graciously sharing some expert expert I want to say expert witness testimony, expert consultant, expert network calls. And he there's a quote from the phone companies and it just goes from the from the phone company's perspective quote this is the best thing that's happened maybe in twenty to twenty five years since texting came out. The phone companies are very excited because the value to the consumer that will be delivered is gonna allow them to have an exciting product and a new growth opportunity, able to drive their ARPOs. So in other words, your phone bill will go higher, but the customer is probably going to be very happy. And that is a good place to be for everyone. And let's see what we have next. So what I've been really focused on is the convergence of many things. And so when I look at my life and portfolio, I had a lot of clarity this weekend, had a lot of change in my life. And some would say optically bad, but if you have a positive growth mindset, All bad news is good news. This is why I'm called the kook. Look, I surfed. No, dude, you face-planted. Well, before that I surfed. It's positive outlook. Look at the bright side. And so what I have come to the realization of is that I'm holding pocket aces in my life. I'm a massive shareholder of ASTS, which I believe is at the vanguard of a major telecom revolution. It's at the vanguard of the orbital economy, which is going to revolve around power. And by extension, it's going to include AI, both on the AI data centers in space, but then the propagation of AI devices back here on Earth. This is a good place to be. And so looking at what Facebook has done in the past week, I've been blown away by Muse. It's been an incredible experience. I've booked a vacation through it. the dollar volume I've already transacted with it is a lot. Meta is playing for transactional flow through its app. It's going to charge me nothing to use it. I'm not like Claude, I'm burning through tokens and then it stops me, and same with Astra. Muse isn't going to stop me. Muse is going to feed the addict because it set itself up to be very good for transactions. And now I've gotten hooked. I was booking a vacation and I just had Muse do it all. And that's a lot of flow. And at some point they're gonna take a little bit of a vig because it's super convenient. It's gonna be the same as kind of an interchange fee. And so the curious question is, as I look at my own workflows in my own life, I'm spending most of my time doing work through AI. So the question is, is AI going to be data intensive? What's interesting is when you do some basic math, um, AI is actually pretty well served by satellite. It's just not that data intensive because the heavy stuff happens back on the servers. And so the new exciting technologies are things like this Charm, which I get the point— having a Mark Zuckerberg listening device with intelligence that you bring around with you is Is in fact somewhat of a horror story, but never mind that. Muse is so cute. You know, look at their logo. It's like happy. He's working for you. And so these devices though, let's say you get a charm. It's going to be interesting. How do you pay for that? Is that another device on your AT&T plan? Is there a point where the Mag 7 companies actually go around the telecom companies? All of these devices are going to need to be connected. How are they going to connect? Are they going to bypass The MNOs and the terrestrial 5G networks because they can work on a space-only connection. Now, wouldn't that be an interesting turn of events? Even for me, for the guy who says, well, look at the hybrid network architecture, blah, blah, blah, which I still believe, but that's for the general use cases we have today. I'm not contemplating the way that changes tomorrow. And so if, for example, we might have to see it, but the little charm ends up being able to do all of the things you need to do, which is possible, like, hey charm, go order acai bowls and then tell my wife I did it and let her know when I'm going to be home, it could probably do that. I don't know if I need to be tapping on a screen and using an iPhone. Hey, Charm, tell my car to pull Waze up so I can get where I'm going. Ha, trick question, because pretty soon my car is just going to drive itself. It will already know where I need to go and I won't have to even do that because it will self-navigate. And so there's a lot of these interesting changes that are happening, which are kind of hard to necessarily absorb, But the way in which they connect might fundamentally change a lot of our assumptions on how they connect. And these big companies are not really wanting to have reliance on others, which is really the takeaway is these guys are going to want to vertically integrate and not rely on the slowest cog in the machine. And so one of my other buddies runs it, actually runs a telecom company. And he was explaining to me the process of, uh, he's an MVNO. And it's not that guy on Twitter that I fight with. It's a different guy who I don't fight with, who I like. But I was asking him about what it's like to work as an MVNL. I won't tell you which telecom because that could potentially narrow it down. And he's like, dude, these guys are so slow. Like, we'll even work on something where it's an approved change both parties want, and it's months to get something done. He just said they're so conservative. They are not able to actually hire good people, so they're not Even really that good, and it is just brutal. Do you see Meta wanting to rely on a partner that is described in those adjectives? I don't. This is why I think they're probably going to go direct. So Grok, as my copilot, says AI voice services typically run 30 to 150 kilobits per second total. Or 20 to 120 megabytes per hour, roughly the same as a standard voice call. Interesting. So by comparison, watching a movie is about 3 gigabytes per hour. So AI is 20 to 100 times lighter than video streaming.
[00:19:24] Speaker A: When you need to build up your team to handle the growing chaos at work, use Indeed Sponsored Jobs. It gives your job post the boost it needs to be seen and helps reach people with the right skills, certifications, and more. Spend less time searching and more time actually interviewing candidates who check all your boxes. Listeners of this show will get a $75 sponsored job credit at indeed.com/podcast. That's indeed.com/podcast. Terms and conditions apply. Need a hiring hero? This is a job for Indeed Sponsored Jobs.
[00:19:54] Speaker B: This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome? That's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration blog, or finally break down that long article you've had open for weeks. Gemini in Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses, setup required, compatibility and availability varies, 18+.
[00:20:19] Speaker C: So that's 10 orders of magnitude. So satellite bandwidth like ASTS is going to handle AI easily. It's an interesting thing to keep tabs on. So, you know, am I dispositive, the dispositive source of this? No, I'm not. But I did a quick search. I had a thought, had an observation, and was quickly able to test the reasonableness of it. And we will all find out later, but if that hypothesis and the reasonableness of it is true, it's actually a really big observation on the ultimate TAM of where this could go. And I really want to knock the COVID off the ball on this investment. So I really hope this is true because it would be really cool to have a chip on my shoulder and win. So this is kind of the thing I've been thinking about is this intersection between this asset we have and how it converges with all the trends in AI. And the field continues to grow for ASTS. And so Canada looking to diversify away from Elon Musk, as incredible as SpaceX is, and I've just read the book, uh, or I'm almost done with it called The Book of Elon. And he's, he's such a fascinating individual. And I just think he's so tragically misunderstood by, uh, people who have different political views from him in terms of just sort of how his mind works and what he's actually seeking to achieve. But the, the, the brilliance and the simplicity with which he addresses problems. And the mental frameworks he uses are really revolutionary and so common sense that they're evidently only available to a few people who are able to abstract away the chaos of the world and think like this. And that said, I'm a little bit torn when the battlefield sort of politically moves to kick him out. But that— I didn't, I didn't write the rules. And so this is just what's happening, and that's creating an opening, a major opening, and really an unfair opening that otherwise wouldn't have happened to the extent for AST SpaceMobile. People are starting to get the picture. Morgan Stanley gets the picture. Connectivity is the fabric that turns individual robots and machines into a Collective intelligence. That's cool. Seems like they're going to have to be connected. And again, as we create humanoid Terminator robots, could you even imagine that Terminator robot then saying, please press one and hold for the next AT&T representative? I mean, maybe that's actually how we save humanity. is make all the humanoid robotic companies actually connect through MNO networks, and then they will just kill themselves because they'll be frustrated with the customer service. Or worse yet, make them connect through Spectrum fiber cable. This is the way, I guess. I've solved the world's problem is we need to give AT&T a monopoly on humanoid robotics so that nothing can actually work that well. But what I think, and I've, you know, really just been trying to press myself to think big and aggressively, really put myself in my own founder mode, is I think the space industry is the next Mag Seven. History is repeating all over again. The surge in creativity and use cases is going to create the equivalent of a few Aristotle Onassis who Himself was a commercial genius, but not necessarily a technical one. He had the ability to carry cargo when there was an inflection called post-World War II. Americans wanted to move to the suburbs and burn gasoline, and Ari was a very fascinating guy to study. Became the richest man in the world, and so Blue Origin's raising money. I actually got to look at the deal, and I just don't like doing privates. Ironies of ironies. But Blue Origin's a very interesting company. Now it's $130 billion valuation, and it just seems obvious that this thing is going to be worth a trillion dollars. When you think about TerraWave, you think about the value of New Glenn launch system with all of the things they can do with it on the back of a great entrepreneur. I think as I really reflected, this is really the birth of yet another Mag 7, Before people have truly internalized the idea. Clearly, it's not a contrarian idea because it is again worth $130 billion. It's not a penny stock and SpaceX is certainly not a hidden little stock, but the magnitude of what could happen is crazy when you let your mind race with it. Think about the value of Blue Origin If in fact orbital data centers is a solved problem, think about how they become the Aristotle Onassis as the amount of tonnage into orbit goes up by 10 orders of magnitude. It doesn't mean launch has to be expensive. It just means it can be a little bit expensive, and then there is just a lot of it. But alas, we're not quite there yet. So this really covers really the week. It was another slow week. Uh, we had Equitas announce they're going to have their satellites in orbit in 2028. This is where we can pause for the studio applause and everyone laughs. So good luck to these guys of being able to put DTC satellites, which they did not invent, have not innovated for, and have not built, have not funded, do not have regulatory approval for, and do not have customers and do not have launch. Good luck to them launching satellites in 15 months. That's going to be super cool. And so we just kind of go back to the issues ASTS is having. And again, read the book of Elon. It's fascinating. And he just makes the point. It's just a wild thing when something that is viewed as insanely impossible is able to progress. to simply being late. And that's how he refers to the Starship program. You think about it, it's just so funny. Something that is just truly inconceivable. I mean, just alien technology 20 years ago, and we were able to advance Starship to now just being late. AST SpaceMobile, alien technology. A next generation radar system, able to connect your phone anywhere, do on-orbit compute, the size of a basketball court. It's able to now just be late and everyone's upset. Goddamn it, they're late. People always forget the part they did the insanely impossible thing. So read that book. Book of Elon's a really good book, uh, and it's good just to, to frame your mind and, and get yourself into your own growth mindset and position yourself to just win in life. It's kind of my current thinking. And so it's a little bit of a short Spaces. I hope it was useful to people just to even reset your own mind as we go into the next week. And I sure hope I'm right. I'm actually checking right now. I'm going to check my, my little chats, um, and just see if people agree with me. So yeah, I don't know if Tanner's on board yet with a full unfurling, so I could be wrong on this. We'll see. But I got— maybe, you know, I jumped the gun and got a little overly excited, but I'm looking at the TLE data now and it's just the, the curvature of these B-star lines just looks suspicious to me that they did. But There's some additional analysis I have to do that Katzy sort of brought to my attention that I need to replicate, and I'll— I'm going to do that and see if I can get some more observations. So have a great week, and I'm very optimistic that we're about to have a real sea change in the news flow. So thanks everyone for joining me. I really appreciate it. It, it's good that everyone can have a common interest and share research, and special thing. So have a great night.
[00:29:04] Speaker B: Thanks for listening to the AST Space Mobile Podcast.
[00:29:23] Speaker C: If you enjoyed this episode, 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.
[00:29:39] Speaker B: Listen.
[00:29:45] Speaker C: Mmm, waffles.