Submitted by FootoftheBeast t3_yvbi15 in wallstreetbets
Hey peoples,
By now most have heard of ASTS. I won't go into extreme DD around the company but here is the summary that matters:
- ASTS is a player in the Satellite Communications (much like Starlink)
- Unlike Starlink they do not require special equipment to receive the signal and their tech can be utilized with any regular phone
- They will accomplish this by launching MASSIVE satellites with +600 SQFT area. Bluewalker 3 (the catalyst behind all this craziness) has been launched in September and is now confirmed to be "unfurled" (i.e. unraveled) and ready to be tested in earnest. Check out the size of this bad boy
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This is a HUGE catalyst to the company as it shifts the investment proposition from a binary opportunity of the "tech works?" to a scalability and ramp up problem. It is no exaggeration to say the next coming days and weeks will be the most important in the company's history
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Major industry players just as Vodafone, AT&T, Rakuten and others are already invested in ASTS and many have even released videos with their CEOs/CTOs/COOs demonstrating their confidence into ASTS tech and the overall company. You can find them on the company's Youtube channel.
At this first glance, we might be tempted to discard this as another run-of-the-mill YOLO but with some DD of your own you can quickly arrive to a different conclusion. You might realize there is currently a huge tug of war between retail investors and a large short fund, which has "double-downed" today as an attempt to stem the insane pre-market rally of +20%.
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Their efforts were successful as the stock pulled back to -5% at this time of this writing.
However, it came at a cost.
Below is the funding rate for ASTS short positions. Notice how the funding fee (now at 20%) has been inching up (while available shares persistently below 50k) since Nov 9th when the speculation that Bluewalker 3 had unfurled successfully started to be confirmed by the astronomer community. There are currently ZERO shares available to borrow and some users are reporting their brokers reaching out to them to borrow their shares. Any re-borrowing will come at least 25-30% rate if not higher.
At the same time today we saw a record number of submissions for institutional buys at pre-market including Goldman Sachs, Vanguard, JP Morgan and others as evidenced below. Notice today's filling date on the last 9 fillings.
Why is today such a big deal?
Cause the earnings call with unfurl announcement is happening TODAY at 5pm. The short thesis best bet is to stifle the excitement through massive sell pressure (potentially even FUD questions during the call) and hope that sentiment carries over the next couple of weeks to give them time to cover.
The company has already announced via social this morning that the deployment was successful and 3 hours later a record short position was reinforced with the borrowed shares mentioned above.
The short sellers are panicking and with good reason. When companies migrate from binary thesis ("is this even possible?") to a scale/ramp-up problem, they are usually met with large amount of trench funding. This has happened with a multitude of companies such as SpaceX, AirBnB. Uber, Google, etc etc. We are exactly at that point with ASTS where the technology is weeks or even days of being completely validated. This will continue to act as a catalyst.
Now combine that with the fact that nearly 40% (that's right FORTY percent) of the entire float is short. When you consider institutional ownership + insider holdings (which by the way have not sold a single share since public listed other than for tax purposes) you can see how this can become a powder keg as the funding rates spike.
With a functional Bluewalker3, ASTS will literally become the new leader of Satellite Communications, even surpassing Starlink in growth potential. ASTS will move away from "will it work" to "will it scale". Large positions from outside investors are soon to follow.
Finally, social awareness is starting to rise. They already have +9k followers on Twitter but daily gains are accelerating and so is engagement.
Not bad considering that even established companies struggle to hit 50k followers.
As testing progresses and AST gets more exposure, this trend is bound to accelerate with Reddit not far behind
I'm in 👍
Mandatory position screenshot
Disclaimer: None of this is financial advice. I typed this up by hitting random keystrokes while blindfolded. My real job is flipping burgers