AST SpaceMobile ($NPA): Mobile Space Provider that Will Disrupt the Entire Wireless Industry
AST SpaceMobile ($NPA): Mobile Space Provider that Will Disrupt the Entire Wireless Industry
The New Providence SPAC will take next-generation satellite broadband specialist AST & Science public through a deal that values the space company at $1.8 billion.
Hey guys, This is Yaniv writing.
Today we will talk about the new SPAC ticker symbol: $NPA this company is still under the radar of many retail investors and currently trading at $13.49. I will write my main keys and my opinion on why I think the story is really exciting behind SpaceMobile.
Who are we dealing with?
AST & Science was founded by CEO Abel Avellan. Avellan previously started a tech company - Emerging Market Communications - which provides high-bandwidth data for video and other communications applications which he sold in 2016 for $550 million.
Midland, Texas-based AST is building a network of satellites it calls “SpaceMobile,” designed to deliver broadband from space directly to consumer smartphones. Existing satellite networks require additional physical devices to connect to the service, such as Iridium’s mobile satellite phones or SpaceX’s Starlink user terminals.
How it will work?
SpaceMobile ($NPA) has created the first and only patented protected, space-based cellular broadband network that can provide coverage across the entire globe. Service is compatible with all +5B mobile phones in use today featuring 4G & 5G data speeds with low latency.
SpaceMobile has built an insurmountable competitive advantage, +750 patent claims that support underlying technology, 161 space scientists, and engineers with 40 prior satellite builds/launches.
Industry-leading strategic partners/investors with a deep technology moat and customer base, planning to launch 20 satellites in 2022 with commercial service in 2023.
Let’s talk financials. One of the key points that I really like about this company is that AST existing shareholders are subject to a 12-month lock-up period and employee stock options are subject to 2-year lock-up period.
Project 9M subs in 2023 growing to 373M subs in 2027 (153% CAGR), SpaceMobile is planning to partner with wireless carriers trough rev-share model 50/50% that will provide them immediate access and exposure to customers with no need of any acquisition or marketing costs (AT&T, Vodafone, Rakuten, etc.)
Ownership breakdown: 43% by Founder, 28% Existing Shareholders, and 13% PIPE shares.
SpaceMobile's technology has been validated through the successful launch and service test with BlueWalker-1 satellite in 2019. +$100M capital raised from strategic investors including Samsung, Vodafone, American Tower and Rakuten:
“What we’re doing is launching a space-based satellite network that allows any phone — without any modification of hardware, software, apps, nothing — to be able to connect directly to satellites,” AST chairman and CEO Abel Avellan told CNBC.
“This will support true 5G broadband speed.”
American Tower, the largest cell tower company in the world ($129B EV), is increasing its investment by participating in the $230M PIPE at $10/share. This is a big hedge for the company because SpaceMobile’s technology could be an existential threat to the cell tower industry.
Competition/Risks/Valuation:
Currently, there is no identified competitor while SpaceX, Amazon, and OneWeb building constellations to provide broadband internet directly to customers. SpaceMobile isn’t trying to compete with existing internet service providers, they are partnering with all the big ones in order to solve the connectivity problem and get reliable coverage to mobile phone providers in the 5G space.
Here’s a table made (credit to @anpanman from Twitter) based on projected 2024E EBITDA multiples compared to $SRAC, $T / $VZ / $TMUS, and $SPCE. There's a whole host of reasons why $NPA should trade better than all of these:
Risks: No actual revenue, currently selling dreams backed by many patents and big partnerships. The team has to execute right here in order to launch it by 2021/2022. “Super-wholesale model requires minimal operating expenses and expected to result in 90%+ EBITDA margins” seems quite aggressive and unachievable.
This is a very speculative investment and currently is based mainly on hype same as we had with Virgin Galactic ($SPCE).
The explosion in Nashville this weekend that took out the AT&T hub has caused outages in Nashville, Knoxville, Louisville, Atlanta, Huntsville, Birmingham, and other areas. This is why SpaceMobile $NPA could be a game-changer.
Thank you for reading.
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References:
https://www.reddit.com/r/SPACs/comments/khpzpg/ast_spacemobile_npa_invest_in_the_mobile_space/
https://www.reddit.com/r/SPACs/comments/kfavuf/npaast_science_proven_tech_from_an_industry/
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Great writeup. I'm also bullish on this being game changing but its early.