They Called Tesla and Nintendo. Now, They Are Bullish AST SpaceMobile Stock (Ticker: ASTS)

Episode Overview

• The episode provides a deep dive into AST SpaceMobile (ASTS), a company building a satellite constellation to deliver 5G broadband directly to standard, unmodified cell phones anywhere on Earth.
• It explores how ASTS's capital-light partnership model with mobile network operators and the drastically reduced cost of space launches (via SpaceX) make its ambitious vision financially viable, avoiding the pitfalls of past satellite ventures.
• The discussion breaks down the multi-billion dollar market opportunity, focusing on high-value initial verticals like first responders and the military, which could justify the company's valuation even before a mass-market consumer rollout.
• The speakers conduct a "pre-mortem" on the investment, identifying the two primary risks as the technology failing to work at scale and potential launch delays causing a severe cash crunch.

Key Concepts

• Core Mission & Technology: ASTS aims to "connect the unconnected" by launching the largest-ever phased-array antennas into low-Earth orbit, enabling 5G connectivity directly to standard cell phones without requiring special dishes or terminals.
• Key Differentiator: Unlike competitors like Starlink or Kuiper that need specialized ground equipment, ASTS's technology is designed to work with the phones already in people's pockets, creating a seamless user experience.
• Enabling Economic Shift: The entire business model is made possible by the dramatic reduction in the cost of space launches, primarily driven by SpaceX, which allows for the affordable deployment of their massive satellites.
• Go-to-Market Strategy: ASTS partners with existing Mobile Network Operators (MNOs) like AT&T and Vodafone. This capital-light model leverages the MNOs' customer base, billing infrastructure, and spectrum rights, avoiding the immense customer acquisition costs that led to the failure of ventures like Iridium.
• Market Verticals & Prioritization: The total addressable market is segmented into three core areas: first responders, military/government, and direct-to-consumer. Due to initial capacity constraints, ASTS will prioritize high-value customers like the Department of Defense who can pay the most for guaranteed service.
• Investment Thesis & Risks: The core argument is that the first responder and government contracts alone represent a multi-billion dollar opportunity, making the vast consumer market a "free call option." The primary risks are technological (failure to work at scale) and financial (a cash crunch caused by significant launch delays).

Quotes

• At 2:41 - "In the end of the day, they're trying to connect the unconnected." - Ryan O'Connor provides a concise summary of AST SpaceMobile's core mission.
• At 4:26 - "Unlike Starlink or Kuiper where you need to have a dish, a terminal on the user side, this can go right to your cell phone." - Tuan explains the key technological differentiator between ASTS's service and that of its major competitors.
• At 5:20 - "This company can control the electromagnetic spectrum anywhere on Earth. And then you have to think of all the applications that can be built on that." - Tuan frames ASTS not just as a service provider but as a foundational "enabling technology" platform with vast, hard-to-predict potential.
• At 7:07 - "I think one of the things I noticed was that the cost of launch is going down, thanks to SpaceX." - Tuan identifies the falling cost of space launches as the crucial economic shift that makes the entire ASTS business model feasible.
• At 9:02 - "The biggest difference between AST and Iridium is the go-to-market strategy... they partner with the terrestrial providers." - Ryan O'Connor explains how ASTS's capital-light partnership model avoids the critical pitfalls that caused previous satellite companies to fail.
• At 27:24 - "They are going to be shit out of luck in terms of their terminal value, probably sooner rather than later." - The speaker predicts the demise of niche businesses that profit from providing connectivity in captive environments like airplanes and cruise ships.
• At 30:45 - "you've got $21 billion sunk... and it definitely doesn't work when it's the one use case that the entire operation was spun up to solve." - This quote criticizes the extreme cost and failure of the existing FirstNet system for first responders, highlighting the massive need for a reliable alternative.
• At 32:20 - "you can zero out the consumer broadband opportunity, and just focus on... the slam dunk, low-hanging fruit, and you're getting one of the best businesses I've ever seen for a truly ludicrous multiple." - The speaker argues that even if you only value the first responder and government contracts, the company is incredibly cheap.
• At 46:51 - "You know what, I don't know what your job is, but my job is to try and find the greatest ROIC in the history of capitalism. Correct." - A speaker's passionate response framing the investment as a search for a generationally great business.
• At 51:36 - "One, the tech doesn't work as advertised at scale... and then the other... is trying to be smart and creative about coming up with a hard-to-conceive chain of events that... cause the company to burn through its balance sheet." - The speaker outlines the two primary "pre-mortem" risks that could invalidate the investment thesis.

Takeaways

• When evaluating deep-tech companies, scrutinize the business model and go-to-market strategy as rigorously as the technology itself; ASTS's capital-light partnership model is a key de-risking factor.
• Deconstruct a company's total addressable market into high-certainty segments versus speculative ones; the ASTS thesis is built on a solid foundation of government and enterprise contracts, with the consumer market acting as a massive bonus.
• Look for industries being unlocked by cost reductions in adjacent, enabling technologies, as the fall in space launch costs has done for satellite-based businesses.
• Identify incumbent businesses with poor products in captive markets (like in-flight Wi-Fi) as prime targets for disruption by new technologies that offer a seamless, superior user experience.
• For high-risk, high-reward investments, clearly define the binary, "make-or-break" factors—for ASTS, these are the successful scaling of its technology and the avoidance of catastrophic launch delays.
• Think beyond a platform's initial use case to consider the second- and third-order applications it might enable; like early AWS, ASTS's control of the electromagnetic spectrum could unlock unforeseen future value.