If you have a meaningful portion of your allocation in high beta, I think it's important to understand market liquidity mechanics. To simplify it, with an influx of attention and liquidity, price often detaches wildly from reality to the upside, leading to remarkable gains (if you take profits). When the liquidity tide goes out, the reversal can be just as dramatic and feel bottomless. This has now happened multiple times in the last year. I've mentioned it before but it's worth reiterating. This will virtually always happen with these high beta/momentum names. You will run out of incremental buyers, and there are forces that will intentionally capitalize on that. To quote my prior simplified warning: "The data suggests that many funds are very over-exposed and retail is likely heavily margined with negative cash (and no dry powder to buy the dip). The "buy the dip" liquidity may be strained, leading to very little fuel to the upside and a much higher risk of forced selling. In addition, liquidity is the lifeblood of these high beta/momentum stocks. Without it, big firms exploit that vulnerability to farm retail/margin accounts with algos. They know you have nowhere to run. Their moves get magnified as high-beta names drop in a coordinated way (pressure on pain points yields dramatic results). This is what gave us the relentless downward cascade" Your commission-free trades are not actually free. Your positioning is not a secret. This market has turned into a casino with remarkable mood and liquidity swings. Worth keeping in mind with liquidity-dependent positions. Otherwise you either repeatedly round trip everything, or worse, get harvested as the tide goes out and you're out of position.

$RKLB Bigger deal than it looks, easy to gloss over. Hungry Hippo is Neutron's most unusual hardware & now it's ready to sit on a rocket. Second stage test stand complete is big too. The biggest point: thrust module will be tested on the real launch mount, not an off-pad rig.

Less price-insensitive algo selling doesn't mean no further selling. It doesn't mean the relentless risk-on, up-only environment of the last year and a half resumes overnight. And it doesn't mean further delays at $RKLB or $ASTS won't affect sentiment and price action. The macro risk-off concerns don't disappear overnight either. What it does do is let me start gradually adjusting exposure, and I've been incrementally building my space exposure back up the last few days. The sector has been annihilated for nearly four months straight from the perfect storm of the $SPCX IPO and its volatility, a macro risk-off environment, summer low liquidity, and several ATMs and share sales. I'm watching as a base and price support starts to form. Further, if the Democrats sweep the midterms that may weigh on the AI sector, along with the Anthropic IPO next month. It remains to be seen where that money goes, but notably I'm not adjusting my AI exposure up right now (mainly $NBIS and $BE).

Came as a big surprise. Funding the acquisition was a big overhang in my mind and I figured it'd be a slog, so I'd held off adding to $RKLB. As the lead high beta horse in space, the ATM likely suppressed the sector as algos propagated it. That pressure should come off now.

I've been gradually getting caught up after taking a break the last 1.5 months (surgery). The concerns I outlined below regarding the $ASTS community continued to manifest, and it's now a cacophony of amplified frustration. Coming back to it fresh, without having lived through the process, the end result reads as very odd and overly negative. From my standpoint, I had been wondering when something would finally go wrong technically and how the company would handle it. There was no way everything would just keep chugging along while building and launching never-before-built massive satellites one after another. There are plenty of reasons for a shipment delay including design updates, new features, government requests, or added resiliency after further testing with BB1-BB13 in the air. Remember that $ASTS didn't launch anything last year. Now they finally get to test a stacked deployment and a real constellation that is starting to take shape. We'll see how long the delay is and how major the issue is, but if it's two months and things are still humming along, I'll take it. On that note, I think people misread the recent PR/update. To me it was them saying "things are still humming along." Remember they're limited in what they can say for a variety of reasons, including competitive secrecy, government secrecy, and nuisance lawsuit risk. And the company has shown over and over that they prefer the head-down grind approach. They haven't sought the spotlight and most of the world has no idea they exist. The one thing I'd been hoping for by year-end is the start of beta service. That's no small feat for a company that until recently was tiny and fighting to survive the startup phase, and is now building never-before-seen satellites while ramping to ~1,000,000 square feet of manufacturing, hiring and training staff, keeping quality and efficiency up, and staying cost conscious. If they can't make beta happen before year-end I'll be disappointed, and I'm sure they'll be even more so. Also remember that 60+ MNO's and multiple governments are depending on their success. So far they've kept affirming that goal. I'll wait to pass judgment until then. I think the BB11 fears are currently baseless. If you start from the premise that "management lies and is incompetent," you'll look for ways to sneer and throw stones. If BB11 were a total failure, I think they'd have said so and de-orbited it by now. Instead it appears they're testing on it, which could very well improve and prevent issues on the next 20+ satellites. They're working their ass off, and if they found things to improve for BB14 and beyond, two months of "delay" is breakneck speed for introducing new engineering to the manufacturing line and re-constructing already built satellites. They can't afford a catastrophic screw-up at this stage. For us it's a black eye on net worth and selling or moving on. For them it's existential, and it squanders the opportunity to change human history. This is coming from someone who thinks touching options/leverage on this stock is a terrible idea, and who would be totally fine if the stock were $60 at year-end as long as the long-term thesis remains intact. I'm looking for a stock I can hold and compound for many years. I don't think satellite shipping news would have changed the stock price much in this environment. In my mind it's actually ideal that the negative stuff is happening now instead of hurting the recovery once the market is risk on again. Just my 2 cents as I get back into the flow, not financial advice. I wrote this out yesterday, has nothing to do with the green day today.

Coming back from a month of surgery recovery leave be like

$ASTS one week later... Things are progressing better than I'd have imagined a year ago. Which is why over-owning it (leverage, margin, options, concentration) likely leads to worse outcomes & mental health right when they're finally under a year from flipping the switch.

Finally had a chance to go through the $ASTS Q2 transcript line by line. Pulled out the ones that stood out. Each is a pretty big deal on its own, let alone taken in totality... Direct transcript quotes: -From the beginning, we designed our network architecture alongside existing mobile network operators, not as a replacement of them. -We're building the direct-to-device network of the future today in partnership with, not in competition with mobile network operators. -our total addressable market is rapidly expanding. We see several growth opportunities across government communications and non-communications opportunities, including radar, emergency response, Internet of Things, AI edge compute, and other advanced connectivity solutions. -In the United States, we have deployed over 3,000 low-band cellular cells. We expect to deploy the remaining cells this year to light up the roughly 5,600 cellular cells that cover the United States. -Our ASIC chip is now in full production -As a reminder, our ASIC is designed to support up to 10 GHz of processing bandwidth per satellite, which is nearly 10 times improvement from our in-orbit Block 1 BlueBird satellites. Over time, we expect further gains of up to additional 10 times improvement in user experience through AI-enabled spectrum management. -We recently unveiled plans for an additional 400,000 sq ft of manufacturing and production space in Midland, Texas, as we prepare to further scale production for United States government and our extended TAM of commercial applications. -We expect our global manufacturing and operations footprint will exceed 1 million sq ft of manufacturing capability, with over 900,000 sq ft residing in the United States once completed. -the regulatory backdrop also continues to support our commercialization efforts and provide a window into how we expect the business to develop. -We plan to talk more about these [three government] awards publicly soon, but they represent near-term capabilities that have been in development with the U.S. Department of War for years and leverage our unique in-orbit technology to solve large strategic needs. In general, the backdrop and size of the Golden Dome opportunity, coupled with the Arsenal of Democracy initiative, remains very strong... -I want to take a moment to discuss the large addressable markets for the company beyond direct-to-device. We see the opportunity to leverage our unique platform that we have created to dramatically expand the company's total addressable market... We believe each of these new additional end markets could ultimately become multibillion-dollar annual plus revenue opportunities for AST SpaceMobile. -In the government and defense market, firstly, we've seen early traction around non-communications, including radar. -Secondly, and this will sound familiar, we have the ability to provide secure communications directly to low-profile, low-power devices. This means regular 3GPP devices, but also custom-designed handsets, existing radios, headsets, wearables, and drones… These applications will be new to the war fighter and greatly simplify and improve communications for them in the years to come. -Apart from defense, we also see a few more funded comms opportunities. First, we are seeing a trend with large countries or regional bodies looking to replicate owned, in-orbit, resilient communications… With the Japan J-LEO preliminary award falling into this category. -Second, federal emergency and backup is another market taking shape... -Thirdly, IoT, or Internet of Things, is an attractive market for cellular and satellite operators… With our controlled MSS frequencies combined with extremely low-cost devices, this is another attractive use of our existing in-orbit network. -One final network I wanted to highlight today is space-based AI edge compute. As companies are starting to think about how to service this market in a big way, one of the key elements is the ability to deploy and control large structures in space, which is what we do. This is significant power to orbit at meaningful scale and with competitive cost. This provides clear cost and scale advantages for supplying power and compute in space. -In total, all of these markets represent an expansion of our incredibly strong core direct-to-device total addressable market into new large markets, primarily on a funded basis, leveraging the incredible platform we have built. -Our commercial and government efforts to date serve as important milestones in our roadmap to much larger opportunities, each with potentially billions of dollars in revenue per year as we scale our business. -What we are seeing is that this [government] opportunity is going to start scaling up into a recurring multi-billion dollar a year opportunity starting in 2027. -this [broad spectrum portfolio and efficiency] is allowing us to actually scale up into a multitude of new applications that create a multiplication of our TAM, our current TAM, from D2D to seven more new applications that really multiply the addressable TAM that we have today. -We want to continue expanding our capability of producing [satellites] to even larger satellites that allow us to support communications, radar, GPS, AI, cloud computing, IoT, and other very strategic applications that we have. -We see the J-LEO project as a real proof point for how large countries are thinking about their own infrastructure… This is a trend that's going to play out, we think, multiple times in the coming years. -I would say that we expect [government contracts] to scale in the near term most significantly. -Frankly, as we said when this was announced, the [US MNO] joint venture frankly frees up a third and fourth customer for us in the U.S., so we were happy and supportive of it. -Going forward with the joint venture, we look forward to partnering with them [T-Mobile] as well. --- Michael Funk Yeah, good evening. Thank you for the questions, guys. So first, ex Blue Origin, how many launches do you have contracted for the remainder of 2026 and 2027, and what is the stack ability on those vehicles? Scott Wisniewski We have 10 launches booked with two different providers, and we're targeting a cadence of every month or two on average… I think with Blue Origin, I think we're all watching that. We were sad to see what happened in May, but they've made tremendous progress to date both turning around the pad and getting resolution recently on the root cause for the anomaly. They're targeting this year. We're not betting on that necessarily. We'll be happy if they do it, but we're not betting on that in our numbers. With a mix of launches, we think we can get to early 2027 for our initial 45 satellites. --- -We've been consistent now for several quarters that we are falling between $21 million and $23 million [cost] per satellite. That includes launch, that includes our direct labor and so forth… I think that that is over the life of a constellation. So some of the initial satellites may exceed, but over time in our planning and so forth, that range holds up for the first constellation. Then we continue to look at ways to take cost out. As we continue to engage with launch providers and acquire more launches, the economics scale better in that way. So over time, we'd hope to bring that cost down, but that's been consistent in that $21 million- $23 million range currently. --- Chris Schoell Great. Thank you. You mentioned the expanding TAM, and you cited AI edge computing, federal emergency, and IoT. Can you just help us better understand what needs to be done operationally to tap into some of these markets, and any rough sense on the timeline there? And as you think about targeting these areas, how should we think about funding needs? Will you continue to be opportunistic, or do you have much of what you need for the foreseeable future? Thank you. Abel Avellan Yeah. Chris, all these opportunities are basically on the back of the architecture we have, which is basically fundamentally the largest capacity to generate power in space, and the largest gain, antenna gain, for a spacecraft. So basically, we are piggybacking in the space architecture we have, and also on the gateway architecture we have. In AI compute, we are starting to add that capability into our satellites. We mentioned that we're on satellite 46. In production now, we're starting to add the compute capability on satellite 47, 48, so later in the year, we integrate it to our system. IoT, radar, emergency, and dedicated constellations, or specialized constellations like the one in Japan, they're already part of the architecture as we have it. So these are incremental opportunities, basically, taking advantage of what we have built on our intellectual property. --- -As you know, we had a joint venture in Europe with Vodafone. 21 of the top 25 operators in Europe have indicated they want to partner with us in accessing that [spectrum] capacity. --- Louie DiPalma Good evening, Abel, Scott, and Andy. On prior calls, you discussed the target for 2027 revenue to approach $1 billion. Given the different puts and takes and the backlog of $1.3 billion now, how should we think of modeling next year's revenue and beyond? Thanks. Scott Wisniewski Hey, Louie. The principles there were based on a first full-year of commercial service. Nothing's changed on our expectation and our goal of approaching $1 billion of revenue in our first year of commercial service. Next year, the way to think about it is still a really strong opportunity in government that could contribute to probably as much as half of that. Still good infrastructure revenue like we have this year. Then as commercial service comes online, ramping into the balance of that. We still feel really good about that number. It's just a question of when we kick it off and when we hit to run rate. --- Louie DiPalma Great. Thanks, Scott. You discussed the beta trials. What is the timing in terms of when consumers will be able to trial your network? I know that you don't want to speak on behalf of your carrier partners, but have they given any sense on when the generic AT&T and Verizon customers will be able to test out the service? Related to that, if there are 25 satellites in orbit, from a general location in the U.S., what percentage of the day will a satellite be overhead such that consumers will be able to connect to your network? Scott Wisniewski Thanks, Louie. Getting the capability ready for consumers is something that we're targeting for later in 2026. How we go to market with that, how we use that, of course, like you said, we're going to defer to our partners, and there'll be announcements on that in the right way. But we're very focused on enabling that. There's a lot that you can do separate and apart from the space. So those two are kind of separate. While we've historically said 25 satellites is the right way to think about it, we have great flexibility there on how we do beta. For us, it's all about racing towards putting satellites in the air and then racing towards getting a scaled beta available. Because of course, the steps from a scaled beta to commercial service is pretty quick. It's just a function of satellites in orbit. In terms of our about 25 satellites, like you said, there's a lot of variance there, but think about it as about half the day coverage. --- -we expect to be working with all operators in United States and all major operators in Europe. We did announce 60 mobile operators around the globe with access to around 3 billion devices on a global basis. As it relates specifically to the United States, as Scott explained it, we plan to keep the contracts that we have with our current partners the way they are, and expanding the relationship into all of them, both through the JV and directly with each one of them. --- Scott Searle Great. Are there any other opportunities that are percolating that you can address in terms of number opportunities or potential timeline for other similar types of dedicated sovereign constellations? Thanks. Scott Wisniewski Hey, Scott. We do not want to comment on that, but there are other discussions with other parties. Frankly, if you think about it, having communications capabilities that are resilient and in your control, I do not know why a G20 country would not want this kind of capability, given the price. --- Huge things I didn’t specifically quote which are in addition to the above: -Announcement of the $1B J-LEO grant with Japan itself -Captured nearly all of US market -Captured nearly all of European market -Largest global portfolio of spectrum ever assembled plus “More spectrum lanes of traffic for our network means more subscribers and better services when paired with our unique technology.” -Working on adding 20 more MNO’s across 50 other countries. -Total government contracts is now sixteen

The reason I'm perplexed is that it's one thing for us to put together breadcrumbs of a possible future, and entirely different for the company to just come out and say it all. I'm glad they said it. It turns those breadcrumbs into a stated goal and shows the vision they've been building toward for years. The "problem" is that none of it is a now thing. It's a future thing. The now thing is incredibly high cash burn and only 13 satellites up and a skeptical (or even adversarial) market. The risk is people expecting all of it to get priced in soon, owning more $ASTS than they should (through margin, leverage, and options), anchoring to prior euphoria highs, and burning out before any of this comes to fruition.

I've got to be honest, that $ASTS call has me perplexed. It was genuinely the most bullish call ever. The sheer number of things they just casually threw out... Every other sentence was a future billion dollar revenue stream. They literally said they were about to start building AI data center satellites with BlueBird 48. Then again, why the hell would they need 900,000 square feet of manufacturing space? It was like they finally said out loud everything SpaceMob has been hoping for. Still not sure what to make of it.

Sorry guys, had to go back into surgery. This second round is taking longer to recover from. Working on slowly getting back on track. Going to push myself a bit to avoid developing too much inertia.

Nice! 😏

Hmm...

Rising 10-year and 30-year Treasury yields tighten financial conditions across the economy in a lot of the same ways a Federal Reserve rate hike does, even when the Fed leaves its short-term policy rate unchanged. In his press conference, Warsh explicitly referenced this. He noted that since the previous FOMC meeting: “Financial market prices, in this intervening period, they didn’t pause. They reacted to the inflation data in one direction, strong economic growth in the other direction, and nominal and real rates went up.” “Rates are higher today than they were 42 days ago.” Today the 10-year yield rose and the 30-year yield climbed above 5.2%, highest level since 2007. The market is essentially doing some of the Fed’s work of raising rates.

Market acting like we got a rate hike. Looking at bond yields, maybe we basically did. Didn't re-enter. Market is out for blood regardless of news. All I see in the flows and institutional data is a black-swan scale hedge fund and retail wipeout, with numbers that look like they did during COVID. Not exaggerating. Entire retail bases in some countries are getting erased and the damage compounds when the average person (and HF) can borrow several times their actual capital. The fire just needs to burn out. Risk is currently undefined. No more trying to reposition. From here I want strong proof this has played out rather than trying to anticipate it (though my gut still says we are close).

Alright Korea that's enough of that.

Sorry guys, it's going to take me a while to get through these. I'll probably miss some, don't take it personally.

Again great print from Seagate $STX and very strong numbers from Bloom $BE. Watching whether they hold their earnings gains as an early hint of a paradigm shift. Need to listen to the $BE call, but after a 50% discount I'll look to get back in if tomorrow isn't a trainwreck.