Thread by @thekookreport

1/ For new members of the $ASTS #Spacemob, I realize there can be a lot of noise on the internet. But, based on Friday's "news," it seems like we might have a seminal event shortly...albeit the first of what will be many accretive weddings with most of the world's MNOs

2/ While I had expected the next "event" to be a 'First Call' - which was pretty clearly disclosed in FCC filings (I'll keep the surprise so it maintains its full impact!), we might have an accelerated path to an unlock in the share price

3/ What do I mean by unlock? See below. Lots of false positives thus far - you'd have thought the stock would have meaningfully de-risked after launch, then unfurling, then capital raise. Like me, you'd have been wrong...until you're not

4/ So what does success look like?

Lol...don't ask me!

5/ As a FURU, I'll answer anyway. From $ASTS's original M&A presentation, we have some proxies for unit economics. Basically each satellite was expected to generate ~$30MM of EBITDA per year. This assumed crappy markets first (Equatorial)

6/ Now, let's juxtapose what we also know. $ASTS has said the first 5 birds (Block 1) will bring the company to EBITDA neutral. That's about $120-150MM of EBITDA, or $24 - $30MM per bird. Ties out.

7/ Whether prices go up, on net, or down after the first deal is anyone's guess. There should be strong "multi-tenant" upside here b/c you can resell underwritten capacity in new markets after initial markets are secured. I had assumed lower in my own modeling

8/ NPV is for suckers, but I did it anyway. So if I'm ballpark right, then the headline for Block 1 should be ~$120MM per year. Let's say it's a 5 year deal - the headline looks like $600MM gross. So what? Well, against $100MM of CAPEX and basically 80-90% margins...good

9/ SANITY CHECK! $GSAT's deal with $AAPL had ~$70MM/yr fixed fees + $450MM CAPEX reimbursement. GSAT's fleet was a POS and underutilized, so AAPL basically gave it life to do this basic SOS service. So take 5 years on the fixed part and we have like $800MM+ headline

10/ Remember, the iPhone 14 was heavily modified to make even this work. From a B. Riley report...

11/ I digress. If you want to know what a joke competing strategies are compared to the purpose-built first satellite based broadband network, please watch this instructional video:

12/ So we have $GSAT's headline number. What did it cost? What's the denominator in our return calculation? Gross cost in the 10K is the answer. Remember, they have to build new birds for $AAPL too, so factor in the +$450MM. All this to support SOS services.

13/ $ASTS management licks its chops. $GSAT put up ~$1.8bn (or we can say $1bn of depreciated value) to do basic SOS service. $ASTS can provide broadband video to the world for $2.5bn (and just $100MM for the 52 degree inclination). $ASTS thrives on pricing that killed $GSAT

14/ Success could easily look similar to the $GSAT topline press release, but represent just the first minutes of the first inning for the earnings power of what's to come with $ASTS. 2024 sell-side estimates basically include only Block 1

15/ Alas, haters hate. One thing to remember is that there is a big difference between a 'dreamer' and a 'big thinker.'

16/ Always a reminder of how things started. It takes specialized people at seminal moments to create the winners

17/ But will it work? In memory of @steve_larrison , let me just answer that with this conversation:

18/ And for those that recognize I'm a crappy trader, let me share how @steve_larrison thought about it.

Steve - We miss you, friend. It pains us you aren't here to celebrate this Company's future success. We know you really wouldn't have been surprised by it, though.