Kook's Weekly - November 3

[00:00:06] Speaker A: This is the AST SpaceMobile Podcast. It will just basically come to your phone and be seamless regardless of where you are. We don't want the user even to know that it's connected by satellite. Listen, the opportunity that we have is very, very, very large. Okay.
[00:00:28] Speaker B: Good evening, everyone. Thanks for joining. Busy week with sports. And so the prophecy just said that a team that wore blue had to win for ASTS to go to 1,000. So we kind of had it wrapped up either way, which is really the great news. So, you know, I'm pretty exhausted from all that baseball. And then looking at the weekly. Clearly this company did not take the week off to basically celebrate baseball. These guys were pumping. So the first thing that Bear's mentioning is we have earnings next Monday at 5:00 PM Eastern. Eagle-eyed people noticed that they pulled this up a little bit. Generally pulling things up is a good thing. It means they're trying to get some news out. I can only speculate what that might be. You know, if people are thinking, hey, Kooch, do you wanna speculate a little bit more specifically? I would think maybe Golden Dome. I'm just trying to think of anything else that might merit pulling earnings forward, but that's really just the hopium in me speaking. Near term, in terms of operational excellence, ISRO, which is our next rocket, had a successful launch yesterday. Very exciting news. Good to see those rockets just continue to go up accurately, really. And we are slated essentially for the first 2 weeks of December. And so that will be here before you know it. And in the meantime, you know, all eyes are really on FM2. Before that, earlier in the week, we had some very technical news around the 3GPP standards. And so this is the type of thing I normally would have frankly missed. And, um, you know, it's pretty technical stuff, but when you kind of dig deeper and I linked out quite a few Uh, pieces of analysis. The, the support of 3GPP means that all chipsets are going to support our spectrum. So this goes hand in hand with the idea of working on unmodified devices. When you see the rumored headlines, you know, whatever you want to call it, from, uh, kind of these Apple SpaceX headlines, to me, those headlines have always really been posts of failure. And so it's quite ironic where journalists will pick up on these headlines and go, oh wow, Apple's working with SpaceX. You know, that's really kind of the same thing as saying, you know, oh wow, the tow truck came to pick up the busted car. That's not a good thing. You know, think of those headlines as really acknowledgement that they had to call roadside assistance. And we saw that firsthand when We did get some expert calls from T-Mobile where they talked about the thousands and thousands of hours of engineering required to get the SpaceX thing to work at all. And, you know, that's the problem. You don't have a backward compatible system. So here, ASTS is really, you know, just so far ahead of it. You know, they've really built this company with first principles and Part of those first principles has always been a standards-based company. And without, you know, I'm certainly not an expert on this, but I've posted some things that I think it was Peter Lindmark posted that were kind of a Groq conversation that talks about this. We have Kevin as always with some really good analysis. His point just being that Block 1 and Block 2 are already going to be supported with all chipsets because of its low-band spectrum. And then going forward, when we have Block 3, which is going to be our mid-band spectrum, those spectrums will, will be supported by new phones, which is, which is important. SpaceX, for example, you know, still has to be incorporated in all the chipsets. We're already wired because we're standards-based, but I wanted to point to one post from Elena Niera, who's actually, I forget what she does. I think she's at MIT. Um, I don't know what she does for a living, but she's, she's a kind of an industry, she actually, an actual industry expert, not, you know, not an idiot like Tim. And her quote, I think sums it up. Quote, having a 3GPP compliant stack and running on globally harmonized spectrum opens the door to connect to the billions of smartphones with those specifications. Adherence to standards wins the day one time after another. And she was retweeting AST SpaceMobile's announcement to this effect. And so I do think that this is one of those announcements that the market would generally miss. I would certainly miss it had I not been beat over the head by this cat that we have living with us called Catsy that taught me all these things. And so the company is putting out a press release like that because industry will understand it. And it's also a nod to Space Mob of, of really knowing that we are standards-based and that puts us in a very different camp from all of the other competitors. Puts us in a different camp from Iridium, SpaceX, the whole gamut. And it really just goes to being, again, first principles-based company. So for most people, again, this 3GPP press release wasn't very exciting and the company knows that. So then they said, okay, fine guys, we'll give you some. Some MNO contracts, and so this STC deal, Saudi Telecom Group.
[00:06:15] Speaker A: Wow!
[00:06:16] Speaker B: You know these are grown-up dollar amounts now. These prepayments are now $175 million. Just jaw-dropping dollar amounts, and this is going to be all across the Middle East. So it's not just Saudi Arabia, and it just goes to show that. this will be a global phenomenon, and the dollar amounts I think are just simply stunning. And so let's dig in a little bit more to that. As part of the announcement, STC was required by the Saudi Stock Exchange to actually press release what the contract value might be. And so in the disclosure, it says the contract value may exceed 9% of STC's revenues as per the audited financial statements for the year 2024. Well, so that's an estimate, but there's a chance it does exceed that threshold, which is why they had to disclose it. That's $1.8 billion over the 10-year term. Consensus numbers are going higher if these numbers turn out to be true. It's as simple as that. And so these are really big numbers. And Saudi is not a really big country. And so then when you start to think about the impact as we roll out across North America, Central and South America, all of Europe, Africa, Asia ex-China, you can start to see where this is going. And this does not include things like the government deals. And so we also had some good catches by only 6 inches. He pointed out That the maps that ASTS discloses, which orange show kind of where where we're going to be over the summer, Algeria, Algeria, Oman, and Kuwait lit up over the summer. And so that was probably then, you know, now in hindsight, a telltale that the STC deal was advancing and going firm. So more countries. And when you, you know, I just want to repeat this point over and over again. As you lock in more countries and get the dominant MNOs in those countries, you reinforce your competitive advantage in terms of your moat. Every time you take down a big swath of geography, you effectively render any competing constellation less economic than the day before. And these constellations require such large amounts of capital, never mind the engineering complexity and things like that, but they're based on utilization. If you can only monetize your constellation over a small sliver of the world, the math just simply does not work. And that's why I believe that this is a winner-take-most market. And we're seeing a very, you know, Quickly clarifying picture of the market of who is going to be the winner that's going to take most. There's a little bit of a misperception in the market that some sliver will be remaining for AST SpaceMobile when people say, hey, there's room for more than one player. I've been pretty consistent flipping that around and thinking that it's really SpaceX that's going to be lucky to be the distant second. When it comes to this market, and each day ensures that that assertion is looking more and more correct. So what's interesting too about these deals is ASTS gets, you know, again, the continued benefit of being a spectrum holding company. And so earlier this, it was a couple of years ago, STC was bidding on 60 megahertz of spectrum in Saudi Arabia and was awarded it. And so this is likely going to be leased to AST SpaceMobile. And so while the company doesn't have the spectrum directly, it's becoming effectively gifted all this spectrum around the world. And that's what I think the market's going to come to realize is that almost, I mean, if you were to think of like a distant analog of when the world, let's just use Saudi Arabia for example, when the world started to find huge oil deposits, effectively the way to capture the value of that oil was to own all the refineries and the retail distribution in the markets where there was demand. That's how the Seven Sisters, the dominant oil companies of the time, really monetized. The oil itself was just kept really low as a way to frankly screw countries like Saudi Arabia, and the money was basically shifted downstream. And so here, the spectrum, it doesn't have a whole lot of value presently because people can't use it. So here comes ASTS walking along And now, just like that cheap oil, ASTS is basically the thing that allows that spectrum to access market. And they're capturing, as we can see this STC deal, a huge amount of the economics. It's a very exciting, it's a very exciting time to be alive, first of all, but it's very exciting developments to see this thesis come true. If this space is not enough for you, I'm linking out Anpanman's other space, where he talked about this dynamic as well. We had a big bang this week with NVIDIA giving Nokia $1 billion to accelerate the development of 5G and 6G RAN software to run NVIDIA's architecture. This is really, again, proof point of where I think the puck is going. I've always thought that AST SpaceMobile was going to be an AI edge company. It's just the logical continuation. And You know, as I actually just kind of think about it more broadly, I was reading Transhumanica's, whatever it was, X letter the other day about Kraken, which is an interesting thesis in its own right. And if nothing else, it's absolutely hysterical that there's a group of investors called crackheads. And so you almost have to buy that stock just so you can say you're a crackhead. And maybe one day there'll be the crack report in addition to the cuckoo report. But that notwithstanding, what I found to be just really interesting is, well, at Transhumanica, the guy Future Plan, if you know him, some of these OG guys like me know him from the dark days 5 years ago. He's a very gifted thinker and very interesting perspective on these really big secular winners. I don't actually know his background. He's always been kind of like a mystic to me, like a sage wise man on a foggy hill I would go to visit with from time to time to figure out if I was insane for owning ASTS. But his preface on his whole thesis around Kraken was really this idea of like the narrative driving the market. And so whether it's, you know, AI narrative, simple enough. And we all knew it, you know, shame on me for not spending a week just to dissect the value chain of AI kind of methodically and go, well, okay. Yeah. So people are going to buy all these chips. Really shame on me because I'm a VC and we saw AI and ML coming from a mile away. And I actually understood Nvidia, but then they're going to buy all these chips. Okay, that's simple enough. Oh, they're going to need all this power. They're going to need all these racks, all these things. It was, you know, one of the guys in the space mob, can't remember if it was Asymmetric or it was another guy, but he owned this thing, TSSI, and he was posting about it, sharing all his work, and it was like a 100-bagger. There's a pretty simple thesis. I don't know if it's the world's greatest company. It has one customer really with Dell, but I mean, 100x. It's pretty, pretty cool. And you had to understand the narrative. And then you look at DRAM prices. Well, guess what? You build up a bunch of data centers and DRAM becomes, you know, the world's most valuable commodity. And so going back to this narrative idea, kind of, if I think a little bit like Transhumanica, I try to, to be a smarter guy. They're building all this AI stuff and even Elon talks about what his view is of the future of the phone, which is that we'll have a device. He calls it, you know, the thing formerly known as a phone, but it really relies on, you know, shocker, connectivity, just like everything else. And so this narrative of you build out so much inference capacity, the next obvious thing once you power it is making sure people can actually access it. And that's where I think we're about to have kind of Warp speed hit us in the next year when the market realizes that ASTS is at the center of all of this. I think ASTS already recognizes that, recognizes that, and I think that its strategic partners recognize that. But when the stock market recognizes that, that's where I think we get blast off to our Palantir-type multiple on huge revenues. And so, you know, you need both of those things. big absolute dollar amounts of revenues. And then, you know, it really helps the old bank account if you can trade at 100 to 200 times earnings— or I'm sorry, sales. That, that's what you want. And seeing industry confirmation of this each day, um, just, you know, helps people stay the path, even though recently the stock market, you know, the stock corrections have been quite shallow and, you know, hasn't maybe required as much resolve in the past. But, you know, a move from $102 to $67 will certainly wake you up. And that's why it's good to remember what the narrative is in the market and then all the microeconomic parts of the thesis that allow you to contextualize the narrative and make sure, like, okay, I get the bigger picture, but do I also get the small picture of why this security or this, you know, this security behind this company is going to make sense? And that's, you know, the 2 parts of investing that I think are necessary and very difficult because a lot of people are good at one but not the other. You know, good at the narrative but bad at the security selection, or people are really good at, you know, looking at companies but sort of miss the forest for the trees in terms of the market narrative. So then we also have more news coming out of Satco. And so Peter Lindmark shared an interview by Daniel Thomas, who's the commercial lead of Vodafone Space. This is Space Adventure, head of sales and commercial of Satco. And so he's saying that they're going to have EU coverage by the end of 2026. You know, pretty exciting, especially when you look at what's happened to Satco of getting all these other MNOs. And so that's where you go, you know, We've talked about this at length. You go from getting the dominant MNO in a market to lock up, you know, 35% of the market share. And then, you know, the real thing that, that I certainly had never anticipated was that you start to get the number 2 or number 2 and the long tail to all work together. And that's what happened in the US with AT&T and Verizon, which was certainly incredible. And it looks like the same thing's going to happen. in Europe. Very unclear if it will happen in Japan. It almost seems like there's too much honor among the old legacy companies to throw a bone to Rakuten, but we'll see. So the sell side's also, you know, tracking the progress. And so Bank of America was out really fast to talk about the new agreement with SDC Group. They increased their target price from $85, uh, to $85 from $80. You know, which again, sell-side target prices are pretty stupid. And so I wouldn't pay them a whole lot of attention. They kind of track, you know, track what the stock price is. And what you want to read is the qualitative part because they're going to be good at putting together the broader observations, and that's what you want to keep track of. There's going to be very few sell-side analysts other than, you know, crazy guys like Redrum, they put out, you know, a $1,500 target price. Those are frankly the guys you really want to pay attention to, um, because they're going to show you sort of the, the bigger picture, almost like what Cathie Woods used to do, except she would, um, you know, basically give you that advice publicly. Guys like Redrum are much smarter than Cathie and are able to zoom out and see the bigger picture. Sell side's not going to generally do that for you, so you have to read it more carefully and extrapolate in your own in your own mind of what's going to happen. We also had, oh, we've got observation from @Dunwalls1 pointing out that Bank of America's 2026 revenue forecast is just $232 million for the company, and STC alone looks like it's going to be about $200 million a year. So That's good news. The way a stock is generally going to travel is if revenue revisions are going up, your stock is going to go up. Stocks are generally going to follow revisions. And so if you can start to track forward estimates that are far in excess of what the sell side is projecting, you are generally going to be on the right side of history. And especially on a company like ASTS, the uncertainty interval of forward revenue is very high. It's a new company, you know, there's a lot to be seen. And so the sell side's just gonna kind of sit there with some numbers that seem high when the, you know, the current revenue is zero. Projecting out quarter of a billion dollars is certainly, you know, something. I just saw in the comments that someone Let me see if it's not working. It'll be really frustrating if, if I've just been speaking to myself for the past period of time. Um, I'll keep going if people could just respond in the comments if it's working. Um, we also had William Blair talking about The company as well, and again, just more eyes looking at the STC deal and paying attention. It was pretty funny where the short account Pivotal Capital kind of made the assertion that it was a fake contract. He said, "Yeah, definitely a real contract." I mean, okay, WTF? It doesn't require a whole lot of research to figure out that STC is a real company, and you had press releases on two different exchanges and. Photographic pictures of executives shaking hands. And so it again just shows how poorly informed the market is. And I get it, you know, a US company all of a sudden announcing some big deal in Saudi Arabia, someone could go, I don't know, kind of far away. But as the credibility factor goes up, I don't know why ASTS would be viewed as credible, but humoring me for a second, As people, as people catch up to the progress of the company, then all of a sudden down the line, they're going to see, you know, $200 million a year of revenue FTC. And that, and that's just going to get dialed in and no one's going to even question it. It's like someone all of a sudden being like, well, you know, Exxon has $3 billion of revenue in Papua New Guinea. And that's kind of a sketch country, you know, give me a break. Zero people on earth are doing that when looking at Exxon. Zero people are parsing the revenue of Facebook and Microsoft like that. And so it all matters. And ASTS is going to be a company on the same— I'm not saying it's going to be as big as Exxon, but it frankly might be. But I think it's going to be the same kind of leading NASDAQ company as any other leading NASDAQ company. And so these revenues in fact are going to be viewed as a business that was able to scale internationally, unlike really anything before. I'm trying to think of a business that was able to scale so well internationally, and it's very difficult. Obviously some of the digital businesses, but even then, like, I forget how long it took Facebook to actually scale outside the US. And so ASTS is really paving a new dynamic. And if that weren't enough, so we had 3GPP standards. We had a big Saudi deal and, you know, it's like, could these guys space out news releases a little bit more? But then we also had a successful test of the IoT market with a company called Beware Holdings. Now Beware is a legit teeny company. And so I spent actually the day I was driving up to a football game and was listening to some calls from Beware just to educate myself. And I don't have a view really of that company. But it is interesting that they were getting just standard cell phone chips to work well as asset trackers. And that's a big market. I've seen some of this stuff before in the VC market where companies are doing this and they're really just reselling MNO spectrum as far as I'm concerned. Let me just take a sip of my coffee. Until I don't know that the asset tracker companies are that interesting or really what the competitive advantage is going to be. But powering the tracker is a big deal. And so what I've also posted here, so in my original DD, they just showed some of the ways in which the existing satellite market worked. And so Globalstar, for example, has an asset tracker. This sensor costs $350. It's pretty big and you get one message per day. And you're paying $9 per month. If you want unlimited messages, that fee is $35 per month. Think about that for a second. So these, the existing market is really just a narrowband product. So just simple messaging that's going to give you, you know, where, where is the tracker and some other sort of telemetry data around it. So really not that. Intensive in terms of bandwidth. And so when you think about the capacity of a constellation like ASTS, handling asset trackers is going to be easy business. Not where they take up any capacity. If people are otherwise having to spend $350 for a tracker and then spending, you know, even at the low end, $10 a month, there's really not a lot of reasons why a lot of packages and a lot of assets that are moving around the world are not going to be using an asset tracker. It's a, it's a real big enabler. And to see this press release, even admittedly we're the small little company, to me this is always something that the AT&Ts and Verizons were going to roll out. Again, they're in the business of leveraging their networks 7 ways till Sunday, and all of a sudden selling a ton of this to the FedExes and UPSs of the world, or any container that's moving around There's a big market here. If all of a sudden you're able to sell a tracker for, you know, a couple dollars and then have, you know, again, I don't know, unlimited messages for, again, a couple dollars. Well, I would just point out when we're thinking about this generally, people are looking at it as there's, you know, 300 million people in the US and we have 66% market share. There's 200 million. What's the ARPU going to be? When you start to think of your real customer as device, not human being, the number of devices could be a huge multiple of the number of people. And so that's where this ARPU concept can go all over the place because, you know, the average revenue per device is really what's going to operate. And then what I think people are going to miss is that there are way more devices than human beings in the world. So our TAM is not 7 billion people. It's going to be more like 50 billion things. Big market. Pretty excited. And so I have some other market slides that I had done originally in my DD. This is just showing, you know, what it looked like for Iridium and Globalstar. And the D2D IoT market was expected to reach $10 billion a year, really driven also by connected cars. I think that this market is going to explode higher. And why is that? When you're no longer constrained by old tech, like narrowband crap from Globalstar and Iridium, that's super expensive. All of a sudden, when the cost of that is potentially 1% of what it currently is, the device count is going to explode. And so sure, then someone could say, well, how are they calculating that addressable revenue number? You know, because obviously if I'm saying the price is going to go down by, you know, potentially 99%, then, you know, the dollar size of the market might go down. But my strong suspicion is that the unit count in prior estimates was pretty small. And for example, as well, utilities. And so never mind automotive where there's a whole lot of reasons to have every car have connectivity like this. Utilities have 500 million devices installed with smart meters, energy grids, all of their assets, things like that. Uh, Saudi Aramco— we, we always thought that there was going to be a contract with Aramco, uh, because the old head of Rakuten went to go be the CEO of Saudi Aramco's tech group. There could be Really is no limit effectively to the device count that would be applicable to this. And that's where these revenue numbers out of left field go crazy. And especially because these devices where they need to be tracked are usually where people are not. And so when people do the analysis and they go, well, most people live in only like 2% of the landmass, therefore there's no demand for these systems. Well, yeah, okay. Go to marine traffic. Which I always kind of found was cool. I like to track boats. And then if you zoom out, one time I was showing my kids, you know, just marine traffic and you zoom out and you look at all the boats around the world, it's just wild. Just, you know, just take a step back. If you're not burdened by knowledge like I am, right? I understand, you know, how the world works pretty well. I look at that and I'm like, well, yeah, well, of course, you know, that's the China-Europe trade into Rotterdam. Of course. Like, why are we even second-guessing that? And like, oh yeah, of course, Panama Canal. But if you just kind of simplify and you go like, look at all these boats everywhere. I mean, it's just incredible to watch just the flow of things. Those things are where people are not, and those things need to be tracked. Those things want connectivity, and those things then are actually very easy to service from a constellation because that's where we actually have our latent capacity. Basically anything we're selling in those markets is just cream versus what you would've underwritten as your base economic model, thinking about consumer, you know, dead zones and things like that. And that's just really, again, you know, stepping back in terms of how difficult it is to model the revenues of the company. And so, you know, we'll give the sell side a pass on this, but, you know, one way to do it, which I've done, is look at what the gigabyte capacity is of the satellite and try to put numbers on that. But then, as I said, I think it was 1 or 2 weeks ago, you really then need to realize the ability to oversell that capacity is probably, you know, something on the order of 5, 10, 20 to 50x. And so you have to think about the concurrency of usage. And, you know, like an asset tracker is not going to use a lot of data. But you're going to be able to charge a couple bucks a month, just like you would charge a user. I'm not always going to be using my phone. My car is not always going to be connected because, you know, a car, for example, is in the garage 95% of the time, not necessarily using a lot of data, but you're going to be charging $15 a month. I think I just re-upped my Toyota package with AT&T, which I think is $15 a month for connectivity to my car. No, there's a good example of your ARPU. And so You know, just me sitting in my house, I have 5 phones. I have 2 phones, wife has one, kids both have watches. That's 5 devices. All my cars are connected, you know, easily, you know, especially then fast forward, you know, with new innovations that will come. If I had a dog, I would definitely have my dog wired with ASTS-based mobile. I mean, can you imagine losing a dog? No way. People are definitely going to pay for that. So you could easily see a generic American family having 10 to 20 devices connected to something like this. And, you know, all these little things, $10 a month, they add up, but you're going to pay it. And that's where this market goes, um, goes crazy. And ironies of ironies, Tim, I mean, you can't make this, this, this guy's so bizarre. It's really a cry for help, honestly. Um, but he, he wrote, why is ASTS encouraging potential customers to break federal laws that forbid use of cellular phones onboard aircraft? And this is when the company announced the inclusion of the 3GPP standards, which talked about how the technology will work onboard aircraft. And it was one of the funniest posts I saw where it was that, I forget which cartoon it is, but it's some Pixar movie with Uncle Fester or something. And it was Tim saying, ASTS. Will not work. And then it was like, except they break laws because it works on planes. And I'm killing the joke, but like basically he's kind of admitting it works on airplanes now, which is very different from his tune just a year ago. And in my DD doc, which is posted, I also did the math on just the airplane market. And so what does it look like if people just use the AST Space Mobile Service on planes and that That alone is actually a pretty reasonable market and it would save airlines a huge amount of CapEx if they didn't have to install the Starlink systems on airplanes. And that's a very interesting thing to think about in its own right. But the path to get there requires satellites to launch. And so we had an interesting little thing happen this week as well. We had AT&T post Well, actually, an AST Space Mobile post that the CEO of AT&T, John Stankey, went to Midland for a first look at the rapid development of the next-gen Bluebirds. So for those playing at home, whenever you have senior people like the CEO of telecom companies or the government go to Midland, it's not because that was kind of a free day for them. They're like, you know, it's a pretty chill day. So instead of going to my elite golf club or seeing my family, I'm going to go to the middle of Midland, Texas to a small airport into a clean facility to go check out some satellites randomly. That's not what they do. And so they're going there because something happened. They either are signing an agreement or more likely than not, John Stankey put his signature on FM2. And in case you wondered whether, you know, this was just a one-sided press release, by ASTA SpaceMobile, AT&T promptly retweeted it and said, and we're all in on those beautiful waffles. Of course, with that, they got more engagement on that post than almost any other post AT&T does about anything. And so it's pretty funny is they got 1,000 likes on that retweet. And, you know, when they do something like sponsor, you know, NCAA Final Four, they get like 27 likes. I mean, you think about their marketing budget, and they're probably just like, Oh God, we could save probably a billion dollars in sport promotion fees and just literally give Anpanman a free t-shirt and we'll get more engagement. And so, you know, and ironically, because I'm looking around, I have my AT&T t-shirt in my, in my office and I have my AT&T keychain, which I have on my car. And I talk about AT&T right now and I've got my AT&T sticker in front of me that says connecting changes everything. And so, you know what? They have actually done the meme and it'll be really funny if they actually dump the NCAA and make a press release and go, we've actually decided to go all in on the space mob for marketing. And it'll probably work. You know what else is going to work? Regulatory approvals. And so the FCC is out saying, we would like to propose, quote, licensing assembly line. To accelerate satellite approvals. Do you guys remember when everyone was selling ASTS stock and Trump won because they thought Brendan Carr was going to kill our satellite company? I mean, that was a valid concern. And I have some friends that certainly pay God knows how much money to the street and for consultants to get, you know, the inside line. And so I'm thinking of one friend who works at one of the biggest firms and Of all the people in the world that would have a direct line into the FCC, I would imagine this would have been the person. I remember him calling me and, you know, just going like, hey, Cook. He called me Cook because he doesn't know I'm Cook. That's where I live my double life. And he was like, yeah, Brendan Carr is going to kill ASTS. He's going to just do whatever SpaceX wants. And because I live in my own reality that I choose to project, I decided to ignore that. Comment. And I'm glad I did because it turned out to be 100% wrong. Because I, you know, I think back at that, you know, just so people don't think I'm just totally delusional. I remember my logic to that. I had some Twitter fights too. You know, when people were so bearish on FCC killing SpaceMobile, the reason I remained positive is just simply my belief. And this is going to sound almost kind of trite, but like my belief in America, I just don't believe that the US is going to have corrupt institutions. And so far we don't. And, you know, in fact, the opposite. You know, leading innovative companies have had the red carpet rolled out for them. And that's what the FCC is literally saying. Not even, you don't have to do any work now. Brandon Carter is saying, we're going to have a satellite licensing assembly line. Right on schedule too, because if memory serves, we're now past the reply to the comment period for for our, um, SES market access filing, which will be a big approval when that happens. And that, you know, I don't know how much the government shutdown is impacting that, but that could happen, you know, soon, as in a couple months. And I think that will be the final cork, you know, to pull from our champagne bottle of glory. I've been thinking about the de-risking Of this company. You know, once we unfurl FM1 and FM2 and show that those can connect, you know, to the, you know, frankly, the constellation we'll now have, once we start seeing that they're able to produce 3 to 6 birds a month, and then you have that US market access approval, you know, we obviously solved the financing question. We were a company at this point, you know, is going to be pushing almost $3 billion of cash on the balance sheet. And so then you go, well, boy, they've really done a lot. And then the government just keeps pumping. And so what's also interesting is we're starting to see rumors come out about Golden Dome. And so, you know, of all things, Calshi, um, that account is, is posting market-breaking news. Maybe they're going after Bloomberg, frankly, which actually would make sense. But they posted SpaceX is set to receive $2 billion to build missile tracking satellites for Golden Dome. And that same news was out, you know, of course posted by Zero Hedge. And, uh, it's being called MilNet, which is going to power Golden Dome.
[00:38:21] Speaker A: Interesting.
[00:38:22] Speaker B: In a prior life, ACF stock would've been just bombed on this because people would've been, oh, look, SpaceX is winning Golden Dome. I can't remember. I think we were There was some weird puke this week. It was on the GSAT news and then it was just bought like you could never believe. But it's interesting because when I saw this golden dome news, my instinct was, oh shit, it's happening. You know, not, oh, there's a, you know, press release saying SpaceX won it. It's, oh wow, this is actually starting to like finally get past the funnel of the Pentagon where the news is leaking out. And so, of course, SpaceX is going to be the first thing mentioned because just the drama of the world. But to me, that means that we're kind of now all of a sudden in the frame where whatever ASTS is going to get, we're about to learn of it. And then meanwhile, as Ant-Man reminds us from a Wall Street Journal article, is that many military leaders and lawmakers are, quote, leery of treading Too many national security satellite networks through SpaceX, fearing that they're going to be dependent on the company. You fool me once, shame on you. Fool me twice, shame on me. Then you also had Trump out there with an interesting little snippet that I saved. And he goes, it's good with Elon. I like Elon. I've always liked Elon. Elon's good. He's a nice guy. He's a capable guy. He had a bad spell, a bad period, a bad moment. It was a stupid moment in his life. Very stupid. But I like Elon. I always respected him. You know, when he, when Trump is like, yeah, you know, but I like him. That's kind of code for, you know, this MFer is dead to me. Except he can't have Elon go split the vote with a third political party or back Democrats. So he's gotta, you know, kind of have some truce. But I think that says it all is that Elon is going to be kept at a distance. And I can't imagine that there's a whole lot of critical path elements That are going to be based on SpaceX, and so I think we're going to get our our contracts. And it just shows the golden dome is actually happening pretty soon. And then it's a worthwhile reminder: we had a good summary from at Tough Four R, who seems to know a lot about the military. He put out a really good slide. It's under the tweet I titled Military Programs of Record. He put out a really good slide that just lists, you know, I think, I don't think this is an official slide. I think he might've made this, but of just the different use cases. And this is really kind of like a glossary of CATSI stuff over the past 5 years. It's a direct-to-device, so obviously just for general communications, for IoT, there it is again, for MUOS 5G bridge. Not even really sure what that means. I think it's from radio to current handsets, you know, so on and so forth. Basically all these programs of records. And Scott is someone who's also said that they have 10, I believe it's 10 to 12 programs of records that they're pursuing. Each of these programs, he said, were, you know, hundreds of millions of dollars. So these are big things and these all stack. And, um, you know, that, you know, going back to the, the TM, This is where you can start to oversell your capacity because you're, you know, obviously the US isn't fighting wars, you know, on the Long Island, you know, expressway. And so this capacity can be sold where it's needed by the warfighter. And it all is kind of coming. So now let's turn back to Elon, who can't help himself. He's, you know, it's interesting. I go back and forth. Elon. He's a very interesting guy. This Joe Rogan report or interview where he talked about the future of the phone, it kind of makes sense to me what he's saying. So I don't even think there's an agenda here. I think this is just Elon telling you what's going to happen. And it kind of makes sense to me that the device that we currently call a phone takes on a different character in the future. And, you know, it's anyone's guess who owns that market. It doesn't necessarily make sense to me why Apple is. Apple hasn't really innovated that much. And, you know, something will happen. If I were Apple, I'd be reading this and also seeing that the future is uncertain and Elon is a better futurist for sure than Tim Cook. And so who is likely to disrupt with the device that we currently call a phone? Elon's a pretty good guess. And so here it's interesting. He's not saying he's going to go create an iPhone, but he's kind of insinuating that this will inevitably lead to competition with the MNOs and Apple. They are probably sweating bullets about this, as they should, because wherever the certain— the future is uncertain. The leaders can flip. And it makes no sense to me why you would partner with a company that is just as likely to put you out of business than really any other outcome. And so there was something out this week about GSAT potentially getting bought by SpaceX. And now I think there was another Spaces, I know there was another Spaces by Anpanman on this. I asked a couple of my friends who are investment bankers because this just smelled kind of weird to me. And you don't leak, a banker doesn't leak that SpaceX is talking to GSAT unless the deal is going poorly. Because just, you think about it from an investment banking perspective, everyone's under NDA in these discussions. And so if you're SpaceX, you know, you're going to look at the data room for sure. Why wouldn't you? free information. But then if someone leaks that, you know, SpaceX is in chats with GSAT, you're going to be so mad. It's just, it's a, it's a very unprofessional thing to do if you're a banker, unless of course you start to realize SpaceX isn't going to do anything. So then you, you, you PR that to create the perception of heat and some panic. And so then someone else goes, oh my God, we better do it, otherwise SpaceX is going to do it. And that's generally how I view this. And, you know, of course we could find out Tomorrow that I'm dead wrong. So I'll certainly allow for that. I don't know the future. I certainly don't have any inside information on this. And, you know, it's very dangerous to speculate on a Sunday night when it's called, you know, Merger Monday for a reason. So I could be proven wrong in 9 hours, which is fine, but I don't really see why SpaceX would buy it because the spectrum GSAT has is already spoken for with Apple. And I don't see that Apple is going to really offer anything more than an emergency texting service because they themselves live in fear of pissing off the MNOs. If they start to encroach as a network operator themselves, the MNOs all of a sudden are just going to promote Pixel devices and Android devices. It's easy. They can start to put their thumb on the scale and shift, you know, I don't know how many hundreds of basis points of market share overnight, very subtly away from Apple. And so there is some tension there. And so then what would SpaceX really get? Like if you buy GSAT, you could nuke their new constellation. You wouldn't need to build it. So that's a lot of found value there. And so maybe there's some effectively IRR-driven trade by SpaceX. If you buy it, you basically buy this Apple contract. It allows you to utilize your satellites, Which frankly you might have trouble utilizing right now. And so they put up all these DAC satellites, but they're not getting any MNO contracts. So maybe what you could see is this is actually the surrender of SpaceX, because if you can't get any MNO business for obvious reasons, because why would you let the wolf into the henhouse? Well, you gotta have some business, otherwise you're just dead duck. Maybe you end up just being the vendor to The manufacturers, but then I just feel like you're pigeonholed in terms of what they're going to be willing to pay you, uh, because then it seems like that's much more of like, here's your capacity charge, as opposed to, you know, the generous revenue shares you get with the MNOs. And then the device manufacturers are also going to be hemmed in on, again, not wanting to offer a service that starts to encroach on the MNOs. So it's a It's kind of a weird thing to think about. It's, it's certainly a fluid dynamic. And so, you know, if SpaceX were to buy Globalstar, then I could just see all the MNOs just further racing to ASTS. It just becomes clear that there really is only one option if you're an MNO, and that option should already be obvious. It should just be AST SpaceMobile. Um, I personally think Iridium is the more attractive company for M&A. It's smaller value. CEO seems to have already waved the white flag. Their last earnings call was just nothing but pathetic. Um, they have some spectrum. It's like 8.75 gigahertz. They have a big book of business with their narrowband stuff with the government, things like that. You step into that, you have $500 million of cash flow. You have no, uh, you're not gonna rebuild that, that constellation. So you run it off, replace the service of your current deals with your new constellation, transition all those customers, upsell them massively on better products. You get the global spectrum, which isn't a lot, but it's better than nothing. And you clean up the market to just have fewer people out there, which, which would be great. And so, you know, I think King Tut, as usual, said it best. And he just went, it's funny how many legacy satellite companies are, quote, suddenly rushing to sell off their spectrum assets or even their entire businesses altogether. It is interesting. It's a, it's a mass exit where it's almost like people see something coming and they're trying to salvage what they can before they're rendered obsolete. And so we'll see, but it is a shocking sort of change, um, right away. And I get pretty excited about this too, because it'll be great to just have silence. And so getting all these third players outta here, we think about it, when EchoStar sold, I was so excited to have Charlie Ergen outta here. This guy is super annoying because he's kind of irrational, very smart, ballsy as all hell, has cash. And so he can, he can do things that can really screw up a market. He could have built a 3rd constellation and just, I don't know what he would have done with it because I'm still dubious that MDA can, can really make something great. You know, that prime contractor model, as I've said a million times, is pretty, it's is pretty dubious, but I really don't want to have someone out there because it just won't go away for 5 or 10 years. Then I really don't want to have Iridium talking about anything and Globalstar talking about things and Link and OmniSpace. And so we're having these guys kind of fold. It would be great if Iridium goes away. It'd be great. I think if ASTS buys it, that would be great. I think there's a deal that could be super attractive for AST SpaceMobile and frankly super attractive for Iridium. And then all of a sudden, if you just have a market where it's just ASTS and SpaceX, it will be just very simplifying for the market. And then I think people will be able to race to the conclusion I've already had, which is this is a winner-take-most market. And then people will realize that ASTS is that winner, and then we'll trade at an ungodly valuation multiple. And that's what it looks like could actually be an early 2026 type of thing if this GSAT news or, you know, situation resolves itself. And then I still think that Iridium is probably fast to go as well. And Lynk and OmniSpace are now going to be buried under some European bureaucracy. Good luck to them. So this market's actually shaping up to be super consolidated fast, and that's a good thing. And so then Um, I posted, you know, this tweet, Iridium is next to go, which Mega Constellations, which is a great account to follow, uh, also made the same kind of observation. They put it out with spectrum assets overlapping and D2D spectrum grabbing heating up. The question is, what's the endgame for Iridium? Still sitting at just a $1.84 billion valuation. They have some debt too, for worth. But yeah, I agree. This one just seems like it's, it's ready to go. And, um, then we also, speaking of things that are ready to go, we have New Glenn 2. And so that hot-fired, I think it's on the pad, uh, the cargo, the Escapade spacecraft is, yep, it's now secured in the fairing. And so we're going to be getting a New Glenn 2 launch pretty soon, which will be— not for the faint of heart, but exciting nonetheless. And I think that's pretty much all we have to cover. So thank you for joining me. I am really as excited as I've been about this investment. It feels like the stock wants to make a move the way it recovered after the convertible bond. This news that we have coming outta the company, the cadence is just accelerating. And again, it's kind of interesting, like, why are they accelerating all this news right before earnings? Why, what are they saving in the earnings call for us that they want to have, you know, specific attention paid to? And I, you know, I can only guess and say, luckily we only have to wait an additional week to find that out. So thank you everyone for joining me. Hope everyone has a great evening and I will see everyone Next week.
[00:52:46] Speaker A: Bye. Thanks for listening to the AST SpaceMobile Podcast. If you enjoyed this episode and you'd like to help support the podcast, please share it with others, post about it on social media, or leave a rating and review. To catch all the latest news about AST SpaceMobile, make sure to subscribe. Thanks again, and I'll see you next time. We're doing something very, very big, and I think with this technology we can really affect a billion lives. SafetySpaceMobile 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 animals. Listen. Mmm, waffles.