November 2025
It's been a difficult few years to identify founder-led, skin in the game, U.S. growth companies positioned to outpace the all-encompassing Magnificent Seven (Nvidia, Alphabet, Microsoft, etc). Bitcoin proxies, one answer that had carried the weight in our portfolios, have now stalled and gone sideways over the last year. However, since entering our position at roughly $30/share in February, ASTS has outpaced most of these ideas, currently trading around $64/share as I write this. The stock has doubled, (become a ‘1-bagger’), while we've watched it execute on a few milestones over the last several months.
AST is building the first space-based cellular broadband network designed to work with your existing smartphone, with no special equipment required. I’ve spent plenty of time in rural Iowa and Colorado mountains that even today lack basic mobile service. Imagine now if all of these places, in service areas but with coverage gaps, could have high speed 4G/5G mobile. AST satellites feature antennas (about half a basketball court in size) that can beam signals strong enough for standard cell phones to receive. This eliminates dead zones permanently.
I have an entire yet-unreleased podcast recording with Ryan O’Connor on Crossroads Capital's AST research. What we know is that the company has now demonstrated the world's first space-based voice calls, video calls, and achieved broadband download speeds of 14-21 Mbps to unmodified smartphones.
Unlike (another Elon business) Starlink, which sells directly to consumers and requires expensive hardware, AST operates wholesale through mobile carriers. They've secured partnerships with over 50 mobile network operators globally. In the U.S., AT&T and Verizon provide access to a combined subscriber base approaching 300 million people.
The revenue model is pretty straightforward: carriers offer AST's satellite connectivity as an add-on to existing plans, splitting the revenue roughly 50/50. If AT&T charges $10/month for "always-on" connectivity, AST receives $5. The margins are solid, estimated at 80%+ EBITDA margins at scale. There are essentially zero marginal costs once satellites are operational.
Here's where it gets interesting from an investment standpoint. Based on Crossroads Capital's analysis, AST should generate approximately $6 billion in normalized EBITDA once their global constellation (e.g. all satellites in orbit) is fully deployed over the next 18-24 months. At today's roughly $23.5 billion market cap, that's around 3.9x EBITDA.
Compare that to Starlink's implied valuation of roughly $345 billion (75% of SpaceX's recent $460 billion valuation). AST offers better tech for mobile connectivity, has locked up the major carrier partnerships that Starlink doesn’t, and trades at maybe 7% of its only true comparable's (e.g. Starlink’s) valuation.
The technical risk that kept many investors away has largely been eliminated. AST has:
According to AST's management, they expect to reach cash flow breakeven by Q1 2026 with just 25 satellites operational. With 45-60 satellites planned for deployment by year-end 2026, the funding risk that plagued earlier analysis has essentially evaporated.
I recently finished a fun audiobook by Erik Larson called Thunderstruck. Larson writes historical thrillers and is best known as the author of the salacious, but informative and engaging Devil in the White City. With Thunderstruck, he is telling another true crime Edwardian murder mystery, while at the same time relating it to the invention of the radio by the late italian inventor Guglielmo Marconi. Marconi’s story was the classic tale of one entrepreneurial setback after another before finding success. Funding issues, accusations of charlatanism, and a press that constantly asked ‘why do we need this?’ All of this was before his radio technology essentially resolved the story’s murder in real-time (spoiler alert), essentially solidifying the radio’s merit to the public.
AST Spacemobile’s founder and CEO Abel Avellan is in some ways in the tradition of Marconi. This latest form of communications technology being championed by Avellan is a capital-intensive business building complex infrastructure. Launch delays, technical issues, and slower-than-expected consumer adoption could impact the timeline. The regulatory environment for satellite communications continues evolving. And yes, competition from well-funded players like SpaceX exists.
We're holding a founder-led company that could become the largest subscription business in wireless history. The technical path is clearer, partnerships are secured, launches are progressing, and a path to profitability seems to be coming.
As with a few of our other aspirational investments, this is another volatile position appropriate only for long-term investors. I always appreciate your patience as we watch stories like AST Spacemobile unfold.
Thanks,
Andy
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Andrew Flattery is a CERTIFIED FINANCIAL PLANNER™ and Principal of Flattery Wealth Management. He serves affluent families in Kansas City and nationwide. Flattery is the host of Gentleman Speculator, a podcast on legacy, investing, and the life well-lived. When he’s not helping individuals build wealth, you can catch him playing rec sports, writing children's books, and spending time with his wife and four children.
