To validate exactly what I had said about the difficulty of determining the "unlock" - imagine my surprise when I woke up to see $ASTS up 5-10%. I was already prepared to be "pissed" at the stock being up 25-30% because I thought the stock deserved to be a lot more
Successful launch should have been routine, but for a stock where so much sentiment is tied up in BW-3, anything that deviated from plan would have been taken out of context (never mind that $ASTS accrued all the IP and learning value from getting BW-3 through testing)
In reality, the probability of a successful launch was ~100%, so there was not that much risk into launch, as dramatic as a launch is. I know I was a nervous wreck. Anyone who didn't have the finale of Koyaanisqatsi somewhere in their mind is lying en.wikipedia.org/wiki/Koyaanisq…
I personally think Efficient Market Hypothesis is a load of sh~t, but here we are. The market apparently priced launch correctly
So we continue to search for the elusive 'unlock' for $ASTS, which is the reason to own the stock now instead of waiting until everything is obvious. I wonder whether we get a Biotech-type move ever, or if it's a slow steady ascent
First things first, it's clear that the $ASTS team measures twice and cut once. I'm not concerned at all about unfurling because I invested behind a team, not behind a piece of metal. #MeetTheTeam is exceptional and this is like watching the birth of a Qualcomm
When it comes to stocks, I believe you have to identify 'the obvious' and then move at least one click earlier. It's about the inflection of the 2nd derivative. If unfurling is the inflecting 2nd derivative, then you have to buy now in order to capture the big re-value
However, $ASTS stock might not work until we have actual monetization and/or demonstrate Bluebirds can be manufactured at scale. It could easily be the case that efficient market theory tells us "yeah dummy, the tech obviously works"...but the market doubts something else
So why own $ASTS now? You don't have to...but, re-valuation events occur suddenly and unexpectedly earlier than you think. Most return is compressed into short times. Are you sure you know when the unlock is? Are you sure you understand the game theory of how others will act?
What I "worry about," especially after $TMUS / SpaceX / $AAPL / $GSAT is a sudden change in Wall Street understanding about the trend. $TSLA was left for dead forever because Wall Street doubted the TAM or customer preferences
Imagine an initiation by $MS that shows the unbelievable TAM and early market lead by $ASTS? Then imagine how stupid you'd feel if you had been trying to time things perfectly. Imagine Ron Baron pitches $ASTS at Ira Sohn...duh, what an obvious stock!
Ask yourself, would you really establish your position on a +30% break? Would you hesitate and pray for a pull back? Would it come? Returns streams can be compressed and unpredictable. Be careful not to outsmart yourself
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Now, would Google ever buy a mobile network infrastructure company? Well, they bought Motorola for $12.5BN in 2012. Unclear how smart that was, but it got them heavily into the game. Devices are one thing, but making those devices work everywhere are another
1/ Our next segment of #hardcoreDD for $ASTS focuses on the technology. Please DM me with any corrections, suggestions, or areas for me to modify in the next draft (modifying other sections with feedback received)
2/ Here is the simple overview with a schematic from an $ASTS patent filing
3/ Before getting lost in the weeds, let's zoom out with $ASTS and understand the basic problem Abel and team set out to solve
Sorry for the delay, but in response to popular demand, here is the B. Riley note on $ASTS
It's interesting that the analyst echoes the chorus from retail...maybe retail wasn't so unreasonable in their Philadelphia welcome of the Company's update
In what is literally what the halls of Twitter was saying, B. Riley states the obvious:
However, after the clamored for blood subside, we have a dawning realization that perhaps the Company has done something good?
1/ So you let the stock price write the news? Here is my summary of the $ASTS call and filings.
Since retail can be a bit in need of TLDR: Onlyfans creators are just going to have to wait before uploading at 5G. Downloading, though...blazing fast
2/ The 10K says simply that they are “continuing” the initial testing to achieve Cellular Broadband communications. This implies they have not yet achieved Cellular Broadband communications; “Cellular Broadband” refers to cellular communications at 4G LTE/5G speeds. 3G anyone?
3/ If testing is done in segments, then shaking out all the issues is an iterative issue. Importantly, we know the mechanics work. $ASTS was always a software company. It's just bent pipe in the sky, but brains on the ground. This was a good summary
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
First thing is this point, which is coincidence with the roadshow guidance from the December capital raise. FUNDED for production AND launch of Block 1. This means funded until first revenue, whereupon they should have break-even cash flow
The TAM is very large. Note the explicit mention of IOT, wearables, etc. "unmodified, standard, existing spectrum."