Richie 🅰️

This is the second part of my analysis of $ASTS ’s recent convertible-note issuance. The central question is whether the proceeds are primarily needed to absorb higher launch costs following the New Glenn launch-pad explosion, or whether management is preparing to fund a new business opportunity. To answer that question, I will reconstruct AST’s original launch plan, compare it with the revised deployment schedule, and estimate the incremental cost of replacing delayed New Glenn capacity with Falcon 9 missions. On March 2, 2026, during the earnings call, Andy Johnson said that AST was fully funded to manufacture and launch more than 100 satellites. The company was targeting 45–60 Block 2 satellites in orbit by the end of 2026 and had 12 additional launches under contract across several launch vehicles. AST did not disclose which provider was assigned to each launch, but we can infer a plausible allocation from the number of missions, assumed batch sizes, and target number of satellites. For this model, I assume that AST planned to launch three satellites per Falcon 9 and six per New Glenn, allowing it to approach the upper end of its 45–60-satellite target. BlueBird 7 was scheduled to fly alone, leaving 11 stacked missions. Total missions: Falcon 9 launches + New Glenn launches = 11 The number of Block 2 satellites deployed, including BlueBird 6 and BlueBird 7, would have been: 2 + 3 × Falcon 9 launches + 6 × New Glenn launches The combination closest to 60 without exceeding it is: 2 + 3 × 3 + 6 × 8 = 59 satellites The inferred allocation of the 12 additional contracted missions was therefore: - 1 - New Glenn launch carrying BlueBird 7 - 8 - New Glenn launches - 3 - Falcon 9 launches This is the most mathematically consistent reconstruction of the original plan under the assumed batch sizes of three and six satellites. Fast-forward to May 28, 2026. New Glenn exploded and destroyed the launch pad. Following its assessment of the damage, Blue Origin reported that it was targeting a return to flight by the end of 2026. AST management could not simply wait for New Glenn capacity to return; it needed to adjust the deployment plan. The relevant question for investors was: how much did this disruption cost AST? On July 15, 2026, AST announced a revised deployment target. Based on expected launch availability, the company is now targeting ~45 BlueBird satellites in orbit by early 2027. For this model, I interpret "early 2027" as March 2027. I also assume that the target includes the first five Block 1 satellites already deployed. Following the loss of BlueBird 7 and the successful June launch of BlueBirds 8–10, AST has nine BlueBird satellites in orbit: five Block 1s, BlueBird 6, and BlueBirds 8–10. To reach 45 satellites by the March 2027, I assume that New Glenn returns in January 2027 and supports two originally planned missions during the first quarter. Those missions would carry 2x6=12 satellites. AST would therefore need Falcon 9 to carry: 45 − 9 − 12 = 24 satellites At three satellites per Falcon 9, this would require: 24 / 3 = 8 Falcon 9 launches These eight launches would need to occur between August 2026 and March 2027. Under the original inferred plan, AST had three Falcon 9 missions in total. One was completed in June, leaving two originally planned Falcon 9 missions, including the confirmed August flight carrying BlueBirds 11–13. The number of incremental Falcon 9 missions would therefore be: 8 required remaining launches − 2 originally planned remaining launches = 6 additional launches Now assume that AST pays the full published price for each additional launch. SpaceX’s pricing sheet lists a standard Falcon 9 payment-plan price of $74M through 2026. For simplicity, I apply that price to all six incremental missions: 6 launches × $74M = $444M Under this deliberately conservative scenario, AST would require ~$450M of additional gross launch funding to secure the six incremental Falcon 9 missions. The convertible offering is expected to generate ~$887M after fees and hedge costs. The estimated $450M launch requirement would therefore represent roughly 50% of the net proceeds. Even under this worst-case model, only half of the proceeds can be explained by the need for additional launch capacity. The remaining half would be available for the growth initiatives and strategic opportunities described by management. Now let’s unfold the aggressive implicit assumptions made to produce the $450M estimate. - AST receives no refunds, credits, or other relief from Blue Origin. AST continues to reserve cash for 100% of its original Blue Origin obligations and purchases the additional Falcon 9 missions on top of them. If six Falcon 9 missions simply replace three New Glenn missions valued at an assumed $80 million each, the incremental economic cost falls to: $444M − $240M = $204M - AST receives no volume discount from SpaceX. The model applies the full $74M public price to all six incremental missions, despite the size and repeatable nature of the order. - AST receives no meaningful benefit from the BlueBird 7 insurance recovery or its contractual rights against Blue Origin. This assumption disregards AST’s statement that it expects the cost of the lost satellite to be partially recovered under its insurance policy and that it expects to receive a replacement launch under the terms of its contract with Blue Origin. The $450M estimate therefore requires several highly conservative assumptions to hold simultaneously. Now we can estimate the base-case. Starting from the $204M incremental economic cost, assuming $80M replacement-launch credit and a conservative $25M insurance recovery (only 15% of company’s stated cost of BlueBird 7), the incremental cost estimate reduces to ~$100M. Allowing for uncertainty in these offsets and launch pricing, I use a base-case range of $100–150M. Issuing convertible notes under unfavorable market conditions solely to fund $100M incremental launch costs would have been a highly inefficient financing decision. It would also create a serious inconsistency with management’s March funding statement. Forecasting launch cadence and mission success is difficult when a partner’s launch vehicle is still maturing. But estimating available cash and existing contractual obligations is considerably straightforward. If AST was genuinely fully funded to manufacture and launch more than 100 satellites, a capital shortage to finance unexpected six additional Falcon 9 missions would represent a major forecasting error. The financing therefore suggests that management is preparing for an unexpected capital-intensive commercial or strategic opportunity beyond merely replacing disrupted launch capacity. This interpretation is also consistent with the order in which management listed the intended uses of proceeds in the official announcement: 1. "Pursue an expanding universe of growth initiatives" 2. "Mitigate risks associated with third-party launch providers" That leaves the final question: what strategic opportunity could require over $700M of capital expenditure this year? P.S. I excluded Vulcan from the analysis because its role remains highly uncertain. There is a substantial possibility that it will be used for DoW-related contracts that directly cover launch costs and therefore do not burden the company’s cash balance. I also excluded any Falcon 9 surcharge associated with a priority launch requirement. In one of his posts, Elon stated that AST was charged the market price. The analysis assumed no discount to list price, which already represents a premium and is consistent with the "market price" described in Elon’s post.

One would think the $ASTS community was retiring tomorrow based off the visceral reaction to the company raising $1B If you’re a long term investor, shouldn’t you welcome more opportunities to add at low prices? I know what I’ll be doing

Not again. *AST SPACEMOBILE TO OFFER $1B OF CONV SR NOTES DUE '34 $ASTS

$ASTS to expand manufacturing even further in Midland on 23 acres beside the site 1 headquarters Set to exceed 1,800 workers as part of the agreement & build at least 400,000 sq ft facility Nearly doubling their existing footprint

Time for my monthly portfolio update. MTD performance: +40.4%. YTD performance: +97.8% I made a couple of trades this month. Bought some $WOLF and $FLNC in the beginning of the month and sold my $TMDX shares. My cash allocation is around 11.6% at the moment. Unless I found some great new additions, I see my building up a bit of cash at the moment (just by saving my income, not by selling). A deeper dive into the performance, the allocation is without my 11.6% cash at the moment and the performance is the monthly performance. 1. $PL (+44%): Planet did not only broke above the $40, but also now notes steadily above the $50. They report earnings next Thursday (04/06) and I'm really looking forward to this one. Last quarter was great and their forecast was rather conservative. I think we are in for another great quarter. I always said we can see the stock moving to $60 before year end, and that is still my target. I will do a separate post of what I expect during earnings. 2. $RKLB (+75%): Rocket Lab surged on some great earnings this month. The stock was only up 10% YTD before the earnings, now up 89%. Stock was only up 10% because of the rising concern of the competition of SpaceX, last quarter rklb proved they should not be scared of the competition and there is room for both them and SpaceX. Space had an excellent month and I expect the space to keep accelerating. 3. $OUST (+77%): I always said Ouster is a $40 company but it would take time. Earnings exactly proved this and the stock dropped 20% towards $24. Two weeks later, Ouster is now trading at $46. LiDAR has gained more popularity in the last couple of weeks and investors gained trust that Ouster will deliver. I keep my shares as I think Ouster is a stock for the long-term, but for me, not in buy territory any more. 4. $PLTR (+13%): Palantir has long been my number 1 stock. Down almost 25% for the highs, Palantir is hoping to end a rough stock pricing period. Earnings are still exceptional though. Accelerating revenue growth Year on Year is impressive and on top of that they are making the commercial side more important. They are not entirely dependent on defensive contracts any more. Still my favorite AI software play. 5. Sk Hynix (+77%): I should have bought way more SK Hynix 3months ago (+114%). I decided to sell my $ASML shares (+13% in 3 months), to buy SK Hynix but should have poured more money into the company. Hynix and memory is still immensely undervalued imo, investors are still rerating them from cyclical product to a core AI bottleneck. 6. $AMPX (-3%): Down 34% due to not spectacular earnings, the company crawled back the last two weeks. The long-term view on Amprius is just too bullish, drones are an important part of our future and Amprius is providing the best quality batteries for them. They are also improving on the non-drone sectors like eVTOL, robotics, and space. 7. $IREN (+47%): My highest cost allocated stock in portfolio. Have been a bag holder for a long time but now +-30%. Datacenters are needed and IREN is perfectly positioned to proved Hyperscalers exactly what they need. It's still waiting on a new deal for Iren but it is just a question of when instead of if. 8. $MRVL (+29%): Posted great earnings this month. But as the stock already doubled since March, Marvell did not move too much. Marvell is in the center of everything that is related to photonics. They got a healthy balance sheet to do the right acquisitions and management proved to be very capable of pushing Marvell to a next level. 9. $ASM.AS (+28%): I got ASM International longest in portfolio of all my stocks. ASM manufactures advanced wafer processing equipment used in the fabrication of semiconductor chips. I use the stock as a safe heaven in my portfolio. It have been a great year for them though and the stock has proven to be quite cyclical. If they move to my €1.000 target, it can be that I will sell for now. 10. Filtronic (+42%): Dropped 20% from ath due to less than expected CapEx from SpaceX, the stock still performed very well. Filtronic build the E-Band GaN Amps for SpaceX and they have a research collaboration with SpaceX to move to other frequencies as well. I they succeed, I'm sure Filtronic will move up my portfolio quickly. 11. $WOLF (+111%): Working away debt, a bullish SiC report of the BoA and price targets exceeding $80, helped wolf to double this month. The stock is moving into a very volatile period as some investors are looking to lock in some profits. But institutions who keep buying the stock, are keep pushing the stock higher. Long-term outlook is very bullish for Wolfspeed. 12. $FLNC (62%): Down 30% after the earnings peak due to the owners who will sell a big stake in the company. When a company like Fluence gets too big, it needs to live it's own live. This happens all the time, ASML is a perfect example of a company that got sold by the owners. Fluence posted great earnings though. The battery manufacturer secured two contracts with Hyperscalers. They did not give too much details during earnings but next quarters should be crucial for the company. 13. $GOOGL (+3%): Nothing spectacular here. Alphabet already doubled in the last year. I think the company can become the most valuable company in the world at a certain moment. They own parts of SpaceX, Ast Spacemobil, Planet Labs, Anthropic,... Own Youtube, Waymo, have TPU's,... It looks like Alphabet is in everything they need to be at the moment. 14. $HIMS (+0.87%): With the AI hardware wave in full glory, pharma companies like HIMS stay under the radar. Pharma still got the biggest growing TAM outside of AI and HIMS is ideally positioned to profit from this wave. I only have a 3.7% allocation at the moment, but I might be looking to add to this allocation in the future. I'll stay transparent with all the moves I make on this page.