Inversor007

[Inversor007 @inversor007]

@DsrPrivate Nice dogs!

[Jamie Envesta @jamie_envesta]

One of the things that fascinates me about $ASTS isn’t actually the satellites themselves. It’s the economics behind the business. Management believes that 90 satellites could provide 24/7 global coverage. Think about that for a second.

Today, the world has roughly 5.4M cell towers. Yet despite all that infrastructure, there are still billions of people with little or no mobile broadband coverage, and vast areas of the planet remain difficult or uneconomical to serve. Imagine a small town out in America, Russia, Brazil, Africa, there is no cell tower companies in the world that are going to spend tens of millions in capex to provide coverage for a handful of people. So how are these people ever going to get online? Like ever? Well, AST is attempting to solve that with just 90 satellites.

Now think about it from the perspective of a MNO (mobile network operator) like AT&T, Vodafone or Verizon. Of which all three have already signed MOU agreements with AST. In fact between them they have actually invested about $250M into AST to help them get this working. Now, If you want to improve coverage in a remote village, mountain range, desert, offshore location or sparsely populated rural area, you normally need to spend billions on building and maintaining more towers.

With satellite connectivity, much of that capex heavy infrastructure could potentially be avoided. But what gets my attention besides the fantastic product is the business model.

Most companies spend a fortune acquiring customers. Marketing. Advertising. Sales teams. Retail stores. Promotions. AST doesn’t have to do any of that. Instead, they’ve partnered with mobile network operators that already serve more than 3 billion subscribers worldwide. Those operators handle the customer relationship, billing and distribution. AST is simply the middle man that provides the connectivity from space.

So if the service performs as expected and consumers are willing to pay a few extra quid a month for coverage in places where they currently have none, AST gains access to neigh on half the world, with an existing customer base held by the MNOs without the traditional customer acquisition costs. Does anyone know of a model that compares? I certainly don’t.

So what happens when the service goes live and they essentially, overnight open up the floodgates to 3B customers? If just 5% of them opted for a $5 per month (this is an conservative estimate, no figures have been released) satellite connectivity add-on, that’s 150 million users and roughly $9B in annual revenue. At the same price to sales multiple as their competitor Starlink (90x), they would be trading at $810B or $2,600 per share. However, Starlink is super overvalued and it comes with a Elon premium, of which AST will never have. So if we more realistic and conservative multiple of say 20x sales, that gives us $180B MC or $580 per share. At 80% margins as guided for by management, that would put AST at 25x price to earnings, which for a company that will be putting up triple digit growth I think is more than reasonable. Just my opinion, but based on the above I would not be suprised to see ASTS 5x over the next 5 years.

Not a prediction by any means, just an illustration of how large the opportunity could be if the service gains even a tiny slice of adoption.

There’s obviously huge execution risk attached as they still need to deploy the network and prove the economics at scale, and ultimately if they cannot do that before running out of money they will either go bankrupt, or dilute.

But if they succeed, this could end up being one of the most capital efficient and scalable business models I think I have ever come across.

[Inversor007 @inversor007]

@MacrostratPB Do you expect a bigger pullback in equities next week or you think we are done?

[Inversor007 @inversor007]

@DsrPrivate what?

[Inversor007 @inversor007]

@mandalapore @DsrPrivate Not even the algos believe that shit anymore 😂

[Inversor007 @inversor007]

@MacrostratPB Yes I know! But I thought maybe it is not worth to hold longs if oil goes up much

[Inversor007 @inversor007]

@MacrostratPB Wouldn't oil go up strong if the war starts again?

[Inversor007 @inversor007]

@MacrostratPB How would you react if the war starts again? Would you close longs immediately? Or still risk on?

[Inversor007 @inversor007]

@fortressbio $FBIOP Pay the dividends!

[Inversor007 @inversor007]

@chaka23121 OMG he deleted his account again 🤦😂
What did he expect? Create an account and have 10000 followers in a few weeks while taking about a microcap? SMH

[Inversor007 @inversor007]

@NikLentz I'm not advocating that you have to sell your longs because of the war, I didn't. Just talking about what the market is pricing in and what not. When I read the Oil experts to me this looks way worse than Russia/Ukr if this continues. But we will see :) Good luck

[Inversor007 @inversor007]

@NikLentz That said, I think you are confusing being early (wrong) with being wrong about what happens if the strait doesn’t open in a long time.

[Inversor007 @inversor007]

@NikLentz I disagree that the market has priced in a long term closed strait. That may happen or not but is definitely not price in. IMO the market has priced in a very short/temporary close of the strait. This is normal,why should it price in a long term close initially, it will gradually

[Inversor007 @inversor007]

@MacrostratPB How is it positive if the strait will be closed for another 2 weeks?

[Inversor007 @inversor007]

@DsrPrivate Is this just a short squeeze or is there a reason for this rally?

[Inversor007 @inversor007]

@Zellchair lol every head ticks different. I never thought about that. There is always a good opportunity somewhere. The market is just VERY impatient. They can't wait between a few weeks and a year for what will probably be 50 to 100% return. It is so stupid but there lies the opportunity.

[Inversor007 @inversor007]

@DsrPrivate SPX is almost higher than before the war started, despite oil experts saying it will take half a year or more to restore everything even if it ends now. Does this make sense? What impact do you think that 20 $ higher oil prices for a year has on equities?

[Inversor007 @inversor007]

@DsrPrivate @sotoseattle Didn't they close the strait again? That is more than words..

[Inversor007 @inversor007]

@BurggrabenH @BijuSDamodaran Do you give this scenario a low or high probability?