Dear #Spacemob, this is the $ASTS bear case. The benefit of this is that now, in theory a lot of funds will look into the stock. Knee-jerks will pass. More eyes and more money engaged in a battle ground stock gives investors their day in court. Ignored no more.
As we start this evaluation of their piece, let's first start with a character assault. I mean, we have to soften up the witness on the stand, right? Sahm Adrangi would not get NASA clearance to launch anything, ever. But I digress... cnbc.com/2016/08/15/hed…
The first part of their thesis is that the satellite are destined to fail because of management's "uninspiring" backgrounds. An immigrant from an oppressive socialist wasteland moves to the U.S. and becomes a self-made rich person...uninspiring???
The next point is the delays: the time line WAS a concern for those who were not following the stock closely; $ASTS had to redesign the satellite last year after testing. They crossed every "t" and dotted every "i" to make sure the satellite would work. And it's up in orbit now
Kerrisdale spoke to 'experts' who were 'terrified' of BW-3's size. A BBC (Big BlueBird Constellation) can be scary when someone drops their "farings" for the first time, but size can be good. Did their "experts" have NDAs to get real data? He did:
Maybe ask a board member who is also the Chief Technology Officer of American Tower $AMT. Aside from knowing a lot about RF technology, this guy can also pass a drug test
The next issue is business model. I knew people could doubt the TAM, but this market has rapidly evolved in $ASTS's favor. $TMUS and $AAPL blowing the lids off proved this point
On the issue of reliable service, I'd again point people to what $ASTS's partners say. AT&T is a conservative company. Kerrisdale is run by a coke head. You choose. But I'm just being objective here.
On the issue of costs, I have confirmed that $ASTS does NOT underwrite Starship. Everything is based on Falcon 9; Starship is upside. They are vertically-integrating production, at scale, and have world-class vendors. Maybe costs go up, but the economics should be very fat
He points out that SpaceX and Apple pose a treat. True, kinda. @spacanpanman made a nice table. Apple had to rely on bankrupt $GSAT. SpaceX is legit, but a bit tied up on how it can partner correctly. See my analysis on this issue
Why does Starlink have a dilemma? Telco's are not going to hand over their subs, or give Starlink a chance at stealing their subs. Telco's have and will partner with a carrier-neutral provider. That company is $ASTS
They then attack the MOUs. I mean, ok. Kerrisdale knows how this works and is just trying to insinuate something that is not there. The intent is there. The market is there.
Kerrisdale's point on the original SPAC projections are fair. However, are those projections directionally correct is the real question.
Regarding the timing, the BlueBirds will start launching in late 2023 and the Company has been very aggressive at getting its production facilities up, hiring, and expanding its footprint
I've also previously touched on the funding. Here is a recent thread on that issue
This is an interesting piece of their research. So...it works? The power issue is part and parcel with size. It's huge and has a lot of room for solar on the back of the array
Some boogey men sound scary, and could well be true. However, I've bet on the team here and not on the opinion of someone who has a good title but has not been under the hood and for all I know has hid behind a government salary because they can't think big
Not to be too coy, but perhaps asking someone from a bankrupt satellite company about a non-bankrupt satellite company...when that person was not been involved, nor had access to, the underlying data could leave you with a partial picture?
Only because I had asked this when originally speaking to management, I bring this up. Kerrisdale went on Wikipedia and saw Gallium Arsenide used to be core for satellite power arrays, but neither Starlink or $ASTS use it. Oops. Gotcha! They found cheaper substitutes
This is actually one of the most interesting aspects. Market-access is a huge issue. This is where satellite companies used to fail: they didn't know their customer. $ASTS has this nailed down very well. The Telco's will acquire the customers for them
Now we have a two-sided debate in the market. If all goes well, $ASTS becomes a battle ground stock and funds engage. Unfortunately, Kerrisdale is just a smash & grab shorter, so they will just cover today and move on. Shame that they won't remain short
“He that sells what isn’t his’n, must buy it back or go to prison.”
I guess the Kerrisdale founder has “been there, done that.”
Looking at Kerrisdale's other shorts - some are obvious, but I see they have had huge misses because they did not understand strategic value. Take Straight Path ($STRP) which was strategically crucial for 5G mobile. They missed a fundamental shift in what industry was doing
Last detail. Where a short thesis is underpinned by the idea that management is deceptive, it's useful to remember that the CEO:
- Takes $0 of salary
- Owns 78MM shares
- Has not sold a share
He's aligned with shareholders.
The picture below is of 'aligned satellites'!
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Christmas is coming. Many updates and tidbits that advance our knowledge of AST Spacemobile...read on, friends
🚀 $ASTS WEEK IN REVIEW 🚀
Video Calls Now Possible:Beta services launching in early 2025 with FCC support. Each satellite delivers 1M GB usable capacity, covering vast regions.
50 MOUs secured for global partnerships.
Saturno Project Partnership:Collaboration with Vodafone and Spain for satellite-driven connectivity.
Focus on bridging the digital divide and innovating space technology.
5G Fund Progress: FCC rules effective Jan 2025 to fund ASTS's rural deployment. $50M annual funding likely for infrastructure expansion.
Global Opportunity: $ASTS emerging as the mobile-first leader, contrasting with Starlink's fixed solutions.
Partnerships with telecom giants like Vodafone ensure strong growth potential.
Industry Disruption: Competitors face challenges in compatibility and public perception. AST SpaceMobile poised for rapid adoption in underserved regions.
🎙️Scott Gives a Banger
- Already doing video calls
- One satellite can cover half the US
- 30% of MNO customers will pay more for this service
- Each satellite can do 1mm GB of usable capacity (excludes flyovers at 2am, for example because that’s deemed not usable)
- Not a limited or emergency service, it will be mainstream
- Very close to beta service
- FCC is very supportive
- Very dense airwaves and only ASTS can protect it
- Expect approval very soon
- Several thousand beta users early 2025
- 50 MOUs
- Behind MNOs, a desire to pull infrastructure out.
They want to outsource and have carrier neutral partners
“TMFBuilttoLast” asked a question about SpaceX. Lol. Timmay asked a question via a message board
🎥 Narrative Power:
Documentaries & killer visuals drive the $ASTS story forward.
#ASTS #SpaceMobile #SatelliteBroadband
🌐Vodafone DA
- 10 Year Agreement Covers Vodafone Home Markets as well as other markets via its Partner Markets Program
- Vodafone operates in more than 20 markets and has partnerships that cover another 40 markets
- Confirmed speeds of greater than 20 Mbps on 5 Mhz of spectrum
- The service: These gateways will then connect to Vodafone's existing network infrastructure to route the broadband data to users' devices, as well as to access third-party Apps and the Internet
$ASTS gets industry recognition as well as a lot of attention at AT&T's analyst day, as much more...
🍰Summary
Achievements and Industry Position:
Recognition: $ASTS was named the "2024 Emerging Space Company of the Year."
Industry Alignment: Positioned at a critical intersection of technology and connectivity trends, such as satellite communication.
Trading Sentiment:
Market Dynamics: Noted trading patterns where $ASTS is seen as a pair trade against Starlink news, with investors reacting to perceived competition.
Zoomed-Out Perspective: Investors are encouraged to focus on the long-term structural advantages and milestones of $ASTS.
Competitive Insights:
Starlink Comparisons: Differences highlighted between $ASTS's higher speeds and capacity versus Starlink's shared-beam model.
Investor Challenges: Difficulty for institutions to invest in $ASTS due to pre-revenue status and competition with Elon Musk's ventures.
Satellite Operations: Updates on AST5000 ASIC development for enhanced performance in space environments.
Regulatory Milestones: Progress in FCC approvals, including spectrum leasing arrangements and compliance.
Partnerships:
AT&T Collaboration: AT&T's strategy emphasizes $ASTS's role in augmenting terrestrial services. AT&T and Verizon's spectrum contributions bolster $ASTS's offering.
Catalysts and Future Outlook:
Upcoming Catalysts: Regulatory approvals, new launches (e.g., Bluebird 2), government contracts, and initial operations/revenue.
Long-Term Vision: Potential for significant revenue growth and impact on mobile network operators' subscriber value.
Geopolitical and Global Context:
International Developments: Regulatory challenges in Namibia for Starlink, opportunities in Europe, and competitive positioning in the Indian market.
MNO Partnerships: The strategic choice to collaborate with mobile network operators ensures smoother market entry and broader adoption.
Investment Insights:
Valuation Potential: The potential for exponential growth if milestones are achieved, highlighting parallels with historical tech successes.
Market Awareness: Awareness and investment traction are still in the early stages, with significant room for growth.
🏆2024 Emerging Space Company of the Year
Well-earned recognition for $ASTS after a pivotal year of execution
$ASTS is set to receive FCC approval, Starlink gets to pursue its defective system, FUD Busting, and much more on this week's Weekly
Week in Review Highlights:
Global Expansion and Partnerships: Permits filed in Turkey with Vodafone. Notable collaborations with AT&T, including mentions of their strategic investments and upcoming Analyst Day.
Competitive Landscape: Critical analysis of Starlink's limitations, regulatory challenges, and service model, highlighting $ASTS's edge in technology and market positioning.
Market Opportunities: Emphasis on the scalability and economic potential of commercial space applications, with $ASTS poised to revolutionize telecommunications, especially in underserved areas.
Investment Case for $ASTS: Focus on its superwholesale model, strategic partnerships, and visionary leadership driving innovation.
Financial health underlined by significant cash reserves and successful satellite launches.
Key Takeaways from DB Conference: Observations on industry lethargy versus $ASTS's dynamic approach, with leadership seen as focused and mission-driven.
Analysis of historical failures in satellite
communications and how $ASTS is breaking that mold.
Regulatory and Competitive Insights: Updates on FCC approvals, spectrum battles, and the impact of lower orbital altitudes on satellite longevity and efficiency.
Starlink's challenges with interference and its perceived struggles to compete with $ASTS.
Technological Innovation: Discussion on space-based power generation and other potential non-communication applications for $ASTS's technology.
Market Trends and Sentiment: Shift in generalist investor sentiment towards space stocks, with $ASTS emerging as a long-term growth story.
Analysis of adjacent industries and their role in $ASTS's success, including military and government programs.
Broader Space Economy: Highlights on the growing valuation of space companies like SpaceX and the potential for market disruption in the telecommunications sector.
🇹🇷Testing Permits Continue
$ASTS permits with Vodafone are filed in Turkey. We're going global.
The wet dream of shorts is about to turn into a nightmare for them. I will also try to do a Spaces to cover these topics tomorrow and will schedule it when I know my schedule.
🤘Key Highlights:
Sources and Uses of Funds: Analysis suggests the company may be pursuing less dilutive financing strategies, signaling long-term confidence.
Government funding, MNO prepayments, and EXIM support remain key potential catalysts.
Growing Interest: $ASTS presentations are drawing larger crowds, with institutional investors starting to take notice.
Market Sizing: The satellite market potential, especially in D2D communications, is vast, with both consumer and military applications on the horizon.
Short Seller Debunking: Recent short theses are critiqued, highlighting gaps in their assumptions and reinforcing the long-term investment thesis for $ASTS.
Technical Developments: Continued testing of BW-3 and updates on beam size efficiencies showcase $ASTS's technological edge.
Leadership Moves: CEO Abel Avellan's estate planning transaction signals confidence in $ASTS's future while aligning shareholder interests.
Policy & Regulation: Changes at the FCC, including new leadership, are likely to shape the regulatory landscape favorably for satellite communications.
ℹ️Sources & Uses
Let's start with a review of what matters a lot for a stock like $ASTS - it's balance sheet.
What's interesting is that since earnings, the Company has not used the ATM. There are two paths I'd take if I were CFO (and I'm not out of my league to say I could be a CFO).
Path 1: Hit the ATM. Once you start using it, just get the whole thing done and be over with it. They obviously did not choose Path 1. Why?
Path 2: Do what you need to secure yourself and not gamble, but realize you have something else in store to minimize dilution. MNO pre-payments, EXIM, 5G Funds.
I thought Path 1 was the prudent path. It appears that a prudent company has chosen Path 2. The fact that Abel did his personal liquidity transaction after potentially suggests that ATM is done for the time being.
Bezos finds a new way to get his rockets off. That and much more on this week's "Week in Review..."
🤠In this week's Review, you'll find the following topics
Highlights:
Earnings Call Summary:
Best earnings report to date.
Signed Multi-Launch Agreement (MLA) for 60 launches.
Successful initial operations of Block 1 satellites.
Key partnerships with AT&T, Verizon, and Rakuten confirmed.
Progress on government contracts, including significant EXIM financing application.
Updated CAPEX guidance indicates a path to cash flow positivity.
Strategic and Operational Updates:
$ASTS announced regulatory progress and plans for continuous constellation coverage by 2026 (ahead of market expectations).
Multi-launch strategy diversifies launch providers (SpaceX, Blue Origin, ISRO).
Detailed updates on individual launches, including upcoming ISRO and SpaceX flights and Blue Origin’s New Glenn potential.
A new schedule tracker highlights launch cadence.
Market and Investor Sentiment:
Stock faced short-term volatility, attributed to perceived manipulation post-MLA announcement.
Jim Cramer maintains a cautious stance, while community members argue the stock's upside potential.
Discussion on how the market underestimates $ASTS's long-term network monetization potential.
Military and Government Opportunities:
Growing government/military interest, including NATO discussions and SDA contracts.
Non-communication use cases (e.g., radar, GPS, phased arrays) offer additional growth areas.
Regulatory and Financial Progress:
FCC filings for AT&T and Verizon enable testing and spectrum allocation.
EXIM financing discussed as a key component of long-term low-cost capital structure.
Competitive Landscape:
Updates on SpaceX’s growing valuation and capacity, alongside Starlink challenges.
Industry dynamics highlighted by the collapse of rivals like Rivada.
Global Expansion:
Focus on India and the Middle East, with strategic moves like the ISRO launch providing market footholds.
💵$ASTS Reports Earnings
This was the best earnings report $ASTS has given. The key points are:
- MLA signed for 60 launches
- Successful initial operations of Block 1
- Initial FCC filings for AT&T and Verizon done
- 3 new government contracts
- EXIM application filed and expect more MNO money soon
- Remaining CAPEX for cash flow positivity is $120-170MM
- The SDA (military contract) is an example of something that can grow into huge deals
- Expect MNO deals soon (Rakuten already done)
But don't ask me, here is all the news that's fit to print: