ASTS

AST D2D 5G technology is ready to enhance the telecommunications industry. This will commence at the end of Sept when they launch 5 sats – BB1s. 5 sats which will provide 125 milly revs next year and already have AST EBIDTA break even. The plan is to produce 4 sats per month next year and beyond. Approx 100 sats are needed to be fully operational.

AST has superior tech to any pretenders trying to get into the space and they will have no competitor for years. Their tech is patented and took them 10 years to establish. Starlink tend to be who people fear the most re competition. There is a misconception that Starlink are ahead of the game with anything to do with space based communication services. Starlink are largely in a diff lane – broadband and have yet to show that they will be a real competitor at all in the D2D 5G space. Even in their main area of focus, broadband, their tech is expensive and clunky – requiring a receiver for functionality. They’ve literally just announced in the last year that they’re going to get involved in the D2D space. How many years behind AST are they? Maybe 5? Maybe more?…

AST have MOU’s with over 50 MNO’s including Vodafone and Rakuten. They have recently signed commercial agreements with AT&T and Verizon, as well as received strategic funding from both companies. This is what led to a recent share price surge as the sole remaining short thesis – funding risks/dilution – was invalidated. Furthermore, AST are set to dominate the US market with AT&T and Verizon on board. It seems likely T-Mobile, who have a relationship with Starlink, will have to follow suit because Starlink have no service to offer them and won’t for many years, if ever. The scant short thesis has now evaporated and they have started to cover – as seen by a 30% or so reduction in short interest over the last month. AST have said there will be no more dilution this year. It seems there will be more more public offerings full stop going forward as AST have 50 MNO’s yet to formalise commercial agreements with – many of whom will provide strategic investment/funding via revenue prepayment and convertible loans.

AT&T recently said that they surveyed their subscribers and 30-40% said they would sign up to AST’s service when available. AST have access to 2.8 billion users through existing agreements with MNO’s. If we assume even a pessimistic take up of 20% (not the 30-40% AT&T mentioned) then that would be 560 million yearly users of ASTS. This is not including users who are currently in dead zones of many parts of Asia, Africa, South America who currently have no phones (as there are no telecom poles providing signal – a problem which AST will solve). It also doesn’t include governmental/DoD contracts or the use of day passes.

So to give you an idea of revenue potential:

We don’t know how much AST will charge users for the service. We do know it will be cheap and accessible. The cheapest possible it will be is $2 ($1 to Ast and 1$ to MNO). I believe it will be double that. However I want to show you revenue potential with the most pessimistic of uptake/price.

So pessimistically we will have 560 mill users (remember this doesn’t include dead zone users, governmental contracts, day passes and it is a pessimistic 20% uptake). AST will pessimistically be getting $1 dollar per month form each user or $12 yearly (I believe it will be at least 1.5 times more than that, maybe twice as much). So 560X12 = revenue of 6.7 billion with net profit of around 5 billion due to high margins. With a conservative 25 PE that with mean a market cap of 125 billion. Again, even allowing for a pessimistic 10% more dilution this would equate to a share price of 420 when fully operational. They should be fully operational by 2028. So doing the maths as pessimistically as possible I get a 420 share price. While this share price may sound crazy, considering ASTS is currently 11.50 per share or so, it’s really not. Transhumanica have a 500 PT by 2030 and Deutsche Bank have a PT of 676 by 2027. Have you ever seen a firm slap a 60x PT on a stock?

If you’re interested, a must read: the most comprehensive DD available, kindly shared by the Kookreport on Twitter – https://www.kookreport.com/post/ast-spacemobile-asts-the-mobile-satellite-cellular-network-monopoly-please-find-my-final-comp

Also, I’d recommend following Catse on Stocktwits/Twitter – he is ASTS’s Roaring Kitty equivalent

Finally, join ASTSpacemobile on reddit.

Disclosure: I’m all in with 20k shares and intend on HODLing all until 2027 at least.