AST SpaceMobile: A Most Spirited Ascent

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Now, regarding AST SpaceMobile – a name, I confess, that rather tickles the tongue – its shares have been performing a most energetic jig of late, leaping and bounding with an enthusiasm that would make a jackrabbit blush. According to the chaps at S&P Global Market Intelligence, the stock has experienced a positively ripping good rally this week, and, if one casts a glance backward over the past year, one discovers a climb of over 400%! Quite a performance, what?

The firm, you see, is attempting a rather ambitious undertaking: building a constellation of satellites with the intention of beaming internet connectivity directly to one’s mobile telephone. A dashedly clever notion, if I may say so. And, just recently, they’ve received a nod from the U.S. government, granting them permission to bid on contracts for the somewhat mysteriously named “Golden Dome” security system. As of Friday, January 16th, at precisely 12:41 PM EST, the stock was up a respectable 18.6%. A most agreeable state of affairs, wouldn’t you agree?

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A Novel Approach to Wireless Communication

The brilliance of AST SpaceMobile’s scheme lies in its simplicity, or so it appears. They propose to utilize rather enormous satellites to deliver internet access directly to smartphones, bypassing the need for those ungainly satellite dishes that clutter up one’s garden. This, naturally, puts them in direct competition with Starlink, but with the added advantage of reducing the bother for the consumer. A significant point, that – the avoidance of unnecessary bother is, after all, the very essence of progress.

The plan, as it stands, involves launching these satellites into orbit throughout 2026, with the intention of switching on internet service in the United States sometime this year. And now, they’ve received potential validation in the form of permission to bid on contracts for the “SHIELD” missile defense program. This could potentially unlock billions of dollars in spending from the U.S. military, all thanks to this direct-to-device technology. A rather lucrative prospect, one might say.

At present, AST SpaceMobile is not exactly rolling in the dough, posting a mere $15 million in sales last quarter. Building and launching a satellite constellation, it seems, is a costly business. They are currently burning through close to $1 billion in free cash flow, which is, admittedly, a rather alarming figure. They will need to generate a substantial increase in revenue if they are to turn a profit, which is, of course, the object of the exercise.

A Word of Caution for the Keen Investor

After this considerable surge, AST SpaceMobile boasts a market capitalization of over $40 billion. A rather hefty sum, when one considers their trailing revenue. This gives them a price-to-sales ratio that is, shall we say, rather on the lofty side. One might even describe it as a bit of a stretch.

Once the satellite constellation is fully operational, AST SpaceMobile may well achieve hundreds of millions in sales through partnerships with telecommunication firms, as well as potentially securing those aforementioned lucrative government contracts. However, even with this anticipated growth, the stock appears rather overvalued. It remains to be seen just how large the business will need to be to justify this initial investment in satellite development.

In short, AST SpaceMobile stock is, at present, wildly overvalued. A most spirited ascent, undoubtedly, but one that appears to be based more on hope than on solid financial foundations. Therefore, my advice, if one is seeking a prudent investment, would be to steer clear for the time being. A bit of patience, after all, is a virtue, and one is far more likely to find a sensible bargain by waiting for a more reasonable valuation.

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2026-01-16 21:13