Kook’s Weekly (from a closet)

than this high remember vividly in the end of July 2025, right before Scott whacked us with a convertible bond, then thinking I had foregone generational wealth when the stock corrected down on 37. For now back at 70, that's amazing. Instead of we look at the earnings calls for one, we were noticed by the Wall Street Journal. Unfortunately, Wall Street Journal just to put a picture of Blue Origin, New Glenn 3 as the cover of the story, that's sort of a, you know, a suspicious picture for us, but you know, from the ashes we will rise again. And so I thought there were a lot of really incredible earnings calls summaries. I was, I was in London when it hit. So I wasn't able to live tweet everything and it was also super related night for me. But the key points I'll read a couple of these is basically they confirmed J. Leo. And so it looks like that really is just gonna be a billion dollar subsidy for Japanese flag satellites. But then otherwise the satellites are pumping around for the rest of the constellation. So it was really neat. And I actually don't know how CFO Johnson would think about this. But when they're giving guidance on the cost per satellite, I highly doubt they're thinking about the net cost guidance, net of any subsidies. That would make no sense that they would subtly layer in a definition like that. But all of a sudden, if there's this billion dollar non-delittle government grant going into the constellation, based on my personal current understanding of how this might work, which again could be wrong, could change. All of a sudden, our actual net cost per satellite, sorry, as usual, I'm sick. I did a double red eye flight to get here. I wanted travel to get my daughter, which is where I did my spaces last week and then another gets a Europe in my weak end immune system that was not a recipe for success. But anyway, that type of government credit would go to actually make our constellation a lot cheaper. And what this reminds me of is back in the early days, if you were really smart and could see the future, you would have appreciated that Tesla was an analog I make quite often as it relates to STS, notwithstanding any potential ironies people point out. Tesla initially had its sort of high octane fuel port on it by government grants. That's what allowed it to have its initial non-delative financing, which really helped accrue an enormous amount of value to shareholders. I see some parallels with how J. Leo is structured. And I'm anxiously awaiting further details on it. So this is a deal that's waiting for definitive documentation and could take a while, based on my general understanding of how definitive documentation occurs and deals like this. But my other understanding is how things work in Japan. When something isn't announced, this is a done deal sort of each side exchanges ceremonial samurai swords upon one's honor. And I would be astounded if something changed adversely from here on out. And so to me, this is a done deal, whether the market feels like it's appropriately discounted this or not, I don't know. But I certainly go to bed every night realizing that this is important. They come, but he also announced three new government contract awards. So these are starting to really pile in. And again, the US government's not a charity, Trump not a charity. And so that means that these satellites are actually demonstrating things for these contracts to start to roll in and considering just how early we are in the constellation. The fact that these deals are coming in, $100 million plus in funded near term value. The fact that these are already coming in to me is an incredibly optimistic prelude to what we'll follow. And then sure enough, Scott was very quickly talking about how these were going to scale to maybe half a billion dollars next year. Then we have Deutsche Telecom. So they've all but told us that T-Mobile is going to do a contract. And so I think that the company is trying to give you as clear a read of what's happening without being able to just say it outright. And so the signals are there. And I just again go back to how many companies do I follow at this level of detail where I don't already own a huge position? Zero. There's only so many hours in the day. And so I'm also not a pod analyst. So you mean just thinking about that. So let's say I were a pod analyst. Well, I hope you would all pray for me because it's a terrible lifestyle. And I'm not. Thank God that opportunity was stripped away from me at one point, unceremoniously. But you'd have 40 names to cover. And so these guys are generally really sharp. I'm always really astounded at my friends who are PMs at these places, how much they're on top of things. What I don't know is their analyst. So at this point of my life, my career, my friends are PMs and not the analyst. So I actually don't know what their analyst know. But I would again be astounded. If you have a coverage universe of 40 names, and then there's this pre-revenue name in your coverage group, because if you're a TMD analyst, you're thinking about AT&T, T-Mobile, things like that. The chance you're able to spend all this time on ASTS is really crazy. Your PM, for example, my friends who are the PMs, would never let their analyst go down the rabbit hole like this because they would say, we're never going to be able to size it. It's too early, the walls too high, things like that. And so when you think about the available alpha in the name, which is another theme that I've talked about, first of all, there's an incredible amount of it. It is an incredible, so that's just a statistic. ASTS makes its own weather more so than big mature stocks, definitionally true. Then the availability to develop a really important view on that alpha, I think, is unmatched because of the research that Space Mob does, but also once you learn how to read the company's own earnings calls, they literally tell you everything. They just don't come out and pump the crap out of things because they're professional, and they don't need to, but they certainly will tell you which way the puck is going. And so they're telling you that we got a deal with T-Mobile. Exciting things. Well, I don't know what the stock price announcement will be if we do get some sort of big bang announcement like we got from Verizon and AT&T, but I'd have to believe it would be pretty big. And so I anxiously await that day. We have $3.7 billion of pro forma cash giving it effect to the convertible bond. $1.3 billion of backlog. So that revenue backlog is going to be a number I think people are going to start to care about right now. It's funny, yeah, I feel like I've almost been inoculated to it because it's out because ASTS has always covered in so many controversies, most of which are false. I don't know if I ever really step back and go, holy shit, this company has a $1.3 billion revenue backlog and they just started launching satellites. That seems like a big deal to me. And so this number I think will start to become the number. And so as it starts really skyrocketing to many, many billions, it's going to be a good indicator of where the puck is going. And then of course, it should at some point really just convert into career cashflow based on usage. It's not totally clear to me why we're going to have all these long term contracts. Except for the fact that a key part of the company's business model really should be capacity payments, where M&O is paid for five, 10 years of guaranteed access, things like first net as well, military contracts. But there could be a point where that number becomes less important and really subsumed just by the current earnings of the company. But in the near term, this number going up is really also showing that the customers like it and they're really big on it. $1.3 billion is a lot of money. And we also have 10 launches booked. Some people are still a little upset about this, whereas Cots has won every other month. It is what it is. And so these satellites will find a way to orbit and then a lot of additional capacities coming in 2027. But I think the company's just going to do what they've got to do to get these satellites in orbit. We're going to have batch three shipping pretty soon. And I'm excited for that. Company is saying that radar and low band is already the majority of US government revenue to date. I can't see why there's any limit to the demand for that capability. The Department of War seems to really like what they see. And government is, quote, a recurring multi-billion dollar period opportunity starting in 2027, up to half of the target in 2027, up the $1 billion guidance. So this is a very high multiple revenue stream. And I think we'll be viewed as very validating for the company. So when people fully wake up, this is going to start to really drive the bus. GPS is now on the mission list. And so the use cases keep expanding. Radar, communication, and GPS. If you had been following the space mob, especially Katzi, you would have long since known about how 5G satellite technologies have very distinct and valuable GPS applications. The company is showing incredible data rates, 100 megabits per second, already demonstrated with a path to 200 megabits per second, which is something far greater than anything I had ever dialed into. The company is also rapidly expanding their factory footprint. And it's explicitly for US government scale. This is something I remember really putting together last September, I'm trying to remember when I was, I remember where I was. I was walking on New Jersey Shore, listening to Scott talking, I believe, at a Deutsche Bank conference. And that's when it hit me. He went, well, they're doing this because they have a dedicated blackbird facility for the government. Now that seems to be more or less stated. So a lot of really cool things here. And let me quickly just look at some of these other summaries that I had linked. But there was really high quality summaries, DePaul did a great one, yeah, Dave did one. I like yeah, Dave's commentary a lot because he's a busy guy and looking all over the market. It seems to be a phenomenally successful investor far more successful than I am based on the metric that matters, which is returns. And so I really like to read his things very carefully also knowing that ASTS has to compete for his time because of all the different things he looks at. And so we made the point that each line in this transcript effectively is confirming a big deal to him when taking as a total picture. And so really cool here because it's really an annotated transcript for him. But he points out to things that we've always talked about a lot like the ASIC chip. So that's coming. But the thing that seems to really caught his attention was the applicability of IoT. And so expanding far beyond the simple elevator pitch we talk about in terms of dead spots and things like that. But then he goes to what we'll talk about in a second, which is the space-based AI edge compute. I thought this would have gotten more attention. But I get how AI right now is a little bit in the healing process. But the company is now taking this beyond the hypothetical to telling us exactly when this is going to enter the product roadmap. And this is something I had been anxiously awaiting. I'm a good guesser. And so knew that a bell would think about this opportunity because a bell is an aggressive founder. The question is when would the general public get the big reveal on the product roadmap? And I was expecting something that is much more of a PowerPoint AI opportunity, sort of like, hey, these are things we may do in the future. What we got was far more than that. Here is what we will do. And here is when it will start and boom. And the background is we have all the patent data to know how they're really thinking about it. But he really says what we've said for quite a long time is that when you think about the key innovations of ASTS, it's really not connecting it's not that front hall part of the satellite that has the RF antennas. It's actually on the dark side of the moon. It's the solar panel configuration is the ability to have the most power in orbit. And so if you think of ASTS as some people who invented Iceland, so you invent Iceland, what do you have? A lot of geothermal energy and some wonderful people, although I do not recommend walking around Reykjavik at two in the morning because it turns out that the flight can beat the shit out of each other when they drink too much. But other than that, Iceland is an incredible place and blessed with incredible amount of power. And so if you had created Iceland, first of all, congratulations, you were God, but then second of all, you'd say, what am I gonna do with it? And so you call Alkoa. Easy to find it in a phone book, because it starts with A. And you say hi Alkoa, could you put an aluminum schmelter on my island? And then we go, sure, you have cheap electricity. Then you become involved in Bitcoin farming. You basically do anything that has the highest and best use to monetize your power resource. ASTS has what we believe to be the low cost power resource because it has the most efficient use of phased array space within a fairing. And so in terms of solar energy to varying volume, my belief I actually haven't done this exact math, you can just see it very clearly that it's the case. Is the most efficient at putting a solar array in space that has the thermal dissipation properties to then do all the other things on the other side. But initially that is RF communications, telecom has always been where the big money is in space and sure enough, that's what we think is true as well. But then with the other things you can do in space like compute that I'll realize, and in fact, how the critical path being power. So we're now at the moment of...