[PODCAST] They Pitched Tesla and Nintendo In 2018. Now, They Are Bullish On AST SpaceMobile Stock (Ticker: ASTS)
Two smart investors tell us why you shouldn't dismiss this pre-revenue stock
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AST SpaceMobile has the look of a pre-revenue shitco. It was a SPAC merger, has a huge cash burn, and needs to successfully deploy huge satellites into orbit in order for its business to even begin generating revenue.
Not exactly your blue chip favorite trading at a margin of safety.
However, investors who outright dismiss this stock may be missing a good risk/reward opportunity for a potentially disruptive technology in satellite internet technology.
That is what sharp investors Ryan O’Connor from Crossroads Capital and Toan from 10West Advisors came on the podcast this week to pitch. Both have strong track records in public markets, with O’Connor pitching (and still owning) Nintendo back in 2018. Toan saw the inflection coming in Tesla in 2018.
So what do they see in AST SpaceMobile? To try and summarize the thesis:
AST SpaceMobile will enable high-speed satellite internet directly to devices without a terminal
It has partnerships with large telecommunications providers that will spur initial demand with revenue share agreements
Partnerships with the large telcos will keep out competitors (along with other barriers to entry)
The economics of the business once revenue covers the large capital investments look highly promising
I would never say this stock is guaranteed to work out, and neither would Ryan or Toan. But it is an interesting opportunity that could have massive implications for the telecommunications market.
Listen to the full episode to hear the details of the pitch. This is one I will be coming back and listening myself even though I was a part of the interview! A lot to learn from this episode.
-Brett