$ASTS: Full Strategic Activity Mode Engaged

then months later, even sometimes a week later, you'd find out that they were in a sale process or a deal would get announced. There's actually a venture of research firms out there that monitor this stuff. And of course, with the advent of AI, I'm sure a lot of, you know, hedge fund guys do this already, just have like a monitor looking at filings all day. But yeah, there are firms that focus on these types of filings as a way to kind of alert people to, hey, you should pay attention to this company because if there's, if it makes strategic sense for this company to transact and potentially get acquired, this is a breadcrumb. This is a piece of the mosaic that you want to become keenly focused on because something may or may not happen. No, obviously, you might have discussions and they might, you know, they could be exploratory and then nothing comes for a wish. And so we could be looking at ourselves months from now. And, you know, some people might scratch our heads and say, well, I thought maybe something was supposed to happen. Well, well, first of all, I would put the probability of a bell selling the company is very low because I think we are at a very early stage of executing in what is a big opportunity. And I don't think a bell would sell at this stage. Perhaps later, you know, if the company has several shells deployed and billions of subscribers and maybe you contemplate it. But then, you know, of course, like everybody has a price, right? And so could he contemplate something or is there, you know, is there something to prompt the board to put this in place? Right? There might be inbound interest. And as a result, as a producer, the board has to evaluate those offers. Now, as people have pointed out, you know, a bell has effective control of the company with this high vote stock. And so ultimately, it's his decision, right? So even if Google came in with the $300 offer and a bell decided, now is not the time to sell the company because he thinks it's not valued, then that would be the end of discussion, right? You or I would have no say in it. Now, there might be activists who, you know, raise a ruckus and say, hey, you should sell the company and risk adjusted. That's a great price. But there's nothing you can do about it, right? Because the bell has full voting control of the company. And actually, when the company went public via SPAC merger back in 2021, the voting structure, the voting, the Bell's high vote shares, that was actually put in place as a protection for the company because there was inbound interest in acquiring the company back when it was private. And so there was this foresight of, you know, hey, we need to put in protections for the company so that the company will have enough time and latitude to execute on its mission, even if things get rough so that, you know, a shareholder activist like a Jenna partners or or Carl Icon can't come in and try to force the company to sell if it's, you know, down on sluck, which by the way, that happened in 2022, 2023, 2024. You know, if that structure wasn't in place, you probably would have saw a shareholder activist come in and say, hey, you guys should sell the company. But also to keep interlopers at bay, right? So given the strategic importance of the company, you don't want, you know, someone accumulating 5, 10% of the company and then, you know, trying to run a proxy fight and replace the board and take over the company company that way. And so with the Bell's high-boat structure, you know, you keep the company safe and ultimately, it's up to him, right? So if he decided one day, hey, I've had enough, all these guys on Twitter keep roasting me and done with this, then he could decide to sell the company. Or if he truly thinks that the opportunity is, is, you know, what we believe it is, then he's going to continue to sold drawn, right? Unless, you know, things change and there's a reason to do a merger or sell the company. But yeah, it's today, you know, I would just say that this is an interesting nugget and there's actually a lot of pieces around it that make it very, I would say the implications of strategic activity to be very high. But does that mean that the company is going to sell itself? No. Like I think the probability of that is still pretty low. However, you know, from these discussions, you never know what's going to happen, right? And so something prompted the board to put this in place. And now, you know, I'd say that, you know, some folks had set on Twitter well, you know, this can be just part of a good corporate governance. Sure. That's right. And if it was on cycle, meaning, you know, after the board, you know, typically, I guess in previous, previous board meetings, there would be an approval of incentive packages and then those would go for vote. And but when I looked at the prior cycle of these things, today's action is actually off cycle. So it's not something that appears normal. And so it does, it doesn't necessarily say like something strategic is happening, but it is a bit peculiar in that way. But going back to what I said before, you know, something prompted the prompted the need for this implementation. And so, yeah, it's pretty interesting. So we can talk a bit about what what do that mean, like what would prompt this, right? But I would say that, you know, I would preface everything by saying, if the company is having strategic discussions around, and you know, whether that's joined ventures, you know, we've got something going on in Japan, we've got something going on in Europe, we got something US. And so there's there's material discussions there, right, with each of these, these players. And those discussions can lead in all kinds of different directions, right? There's also a potential for strategic investments, partnerships, and maybe some level of M&A, right? And it doesn't necessarily have to be inbound. It could be outbound as well, right? So maybe AST is interested in buying grain management spectrum, right? So they as a result of doing that, you know, that that creates some strategic interest potentially for maybe someone to acquire AST, right? Once they've locked up that low-band spectrum. But I think the key thing is that when you're having all these discussions, you need to make sure that all the executives and senior folks are covered so that they are indifferent to one outcome versus another, right? And so that's another reason why you would put these these severance packages in place. But yeah, the the timing of the this package is very interesting. This folks had pointed out earlier and I'd written about this as it was at the time that he was hired. But Ozzy Ramos, who was formerly the vice chair of Barclays Investment Banking, and he covered the team T sector and then he moved over to UBS and was vice chair there. And so I believe he may have overlapped a little bit with Scott, he was at Barclays. But the interesting about Ozzy Ramos is that he is very steeped in knowledge and had relationships in the telecom sector and also the space sector, right? So one of the deals that he worked on was actually the Viosat acquisition in Marsat. And so he knows a lot of the players in space. He also knows all the telcos. And so this guy was hired in early August, you know, again, a very senior UBS banker decidedly even he's joining this this satellite company. For what reason, you know, we were all scratch your heads and figured at the time, I thought, well, hey, you know, they're they're negotiating this USJV, the European JV and the Japanese JV like this guy is the type of person you want to bring in. But there's also other things that are going on, right? And so people have speculated around beta. Microsoft, we know that companies had discussions with Microsoft last year and somebody this evening just said, just told me unsolicited that they believed that there's been recent discussions as well. And then of course, Google is a strategic investor. They're a partner of AST. We know that those discussions have been happening. And then of course, Blue Origin, Amazon, Blue Origin, the executives are close with AST. I don't know if there's any discussions with Amazon, but there would be obvious reasons to potentially work together, right? To leverage and utilize global stars spectrum properly. But yeah, the list is extensive, right? I mean, remember OpenAI was looking at investing or acquiring Stoke or potentially another launch provider. And so all this stuff is converging. But yeah, so Aussie Ramos was brought in early August. And then of course, now approximately two months later, you see this this changing control severance package put in place for everybody. However, I would balance that out by saying that, you know, Adriana Cisneros bought shares on the open market on August 31st. And so whatever has been happening isn't to the point of materiality, right? Where it would keep her, it would preclude her from buying shares in the open market. Obviously, there was something material like the company with Celianse off she probably couldn't buy shares, right? But if there were some initial discussions and, exploratory talks, but nothing really material, you'd have to ask your corporate M&A lawyer. You could buy shares, right? But is something imminent, probably not, but could something happen in two months, three months? Yeah, possibly. But yeah, as I mentioned before, the plan was adopted today. So two months after Aussie was hired a month after Adriana bought shares in the open market. You know, I did some research, as I mentioned before, you know, asking, ChatGbt, like, was it off cycle? And according to the analysis, this was actually this adoption does appear to be more standoff off cycle. And so again, like this is not, this doesn't seem like it was housekeeping, but, and I mentioned it before, some of the executives individually did have several disagreements. They didn't have the exact same structure, but, you know, and then, for example, Bell didn't have one in place, but by putting this in place for all the executives, it makes for, you know, an interesting data point, right? So what would it look like if it was M&A? And so, as I mentioned before, in my, my previous life is a hedge fund, a venture-driven, you know, a long short guy. Whenever you would see these AKs filed, it didn't necessarily mean that something was going to happen, but oftentimes, if you did spend the time in Dug-in and you, you, whatever company had filed it, you know, oftentimes there would be a case for the company to be sold, right? Like it had strategic value. Maybe it was in a consolidating industry. Maybe some of its peers have been acquired, and I'll talk a bit about that in a moment. But once you saw this, you would say to yourself, hey, I should probably spend the next day or two and dig into this company and see if there's any reason why they're putting this in place. And if, indeed, there's the possibility that it could be acquired, right? And so what makes this AK interesting is that if you look at the industry, what has happened, right? So SpaceX acquired Echo Star, and then you had Amazon acquired Global Star, and then you had Rocket Lab acquired a Rhythm, right? And so you do have industry consolidation, right? And so there are strategic discussions that are going on. AST was probably part of some of those discussions as a potential acquire, and then maybe it's had inbound interest as well. But let's let's focus on Eritium, right? So while people are like, hey, you know, I think this could just be good corporate governance, you know, like housekeeping. In Eritium's case, it wasn't, right? So Rocket Lab, if you go back to the merger proxy, Rocket Lab first raised the potential of an acquisition on January 8th, right? And they had some initial discussions before, but, and that was, I believe, on a partnership level, but on January 8th, Rocket Lab, they put forward a proposal to acquire Eritium. And then they circled back on January 27th, and then the parties agreed to sign a non-disclosure agreement so that they could conduct real due diligence, and that was February 6th. And so here you have a process where, and this shows you like the level of materiality, right? Like you have a process where someone's indicated they're interested in buying a company, you sign NDAs, and you start like, wholesome, like, real discussions, right? Due diligence. And so, interestingly, on February 26th, that's when Eritium's comp committee put in a new executive severance that enhanced the CSE benefits with double trigger payouts, right? And so here, after the company's had some level of discussion, and, and you know, and at that point, the board was like, hey, this is pretty serious. We need to make sure that we incentivize these executives who are taking part in these discussions that they are going to, you know, stick around, and are protected. Because, you know, if you're, if you get acquired by a company, and you have like all these, these, let's say stock options, one of the worst things that happened is if you don't have protections, a company could come in and say, hey, we bought your company, and we don't need you anymore, you're fired, and we get to keep all your stuff that's not busted. And so that's what double trigger is for, right? Where they can't come in by the company and just fire you, Willie and Nilly, just to save money. Because if they let you go without cause, meaning, you know, you're being like, go because of redundancy, not, you know, maybe they caught you, like, in busily money or something. 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