AST SpaceMobile (ASTS.US) plans to expand the spectrum, but 140 times the “city dream rate” was sniped by Wall Street veterans

The Zhitong Finance App learned that AST SpaceMobile (ASTS.US) is actively expanding its spectrum footprint to enhance its satellite broadband capabilities, but the market is not buying it — the stock fell 1% before the market on Monday. AST SpaceMobile's stock price rose nearly 3% last Friday to close at $39.70, but it has accumulated a cumulative decline of 2% throughout the week, falling for the fourth week in a row. Market veteran Herb Greenberg also bluntly pointed out its valuation bubble, believing that even after experiencing a sharp sell-off in the early stages, the stock's current pricing is still seriously out of touch with fundamentals.

Seek spectrum expansion: from “directly connected satellite phones” to “full-scene broadband”

In a statement on Friday, AST & Science, a subsidiary of AST SpaceMobile, proposed adding Q/V band and E band (e-band) service link capabilities to its network of 248 satellites. These links will directly connect satellites to customer terminals, further expanding the scope of their proposed high-frequency operation from terrestrial gateway connections.

The application covers part of the frequency between 40 and 51.4 GHz, as well as 71 GHz-74 GHz downlink and 81 GHz-84 GHz uplink. AST SpaceMobile said, “This will support a new deployment model where mobile user devices with different bandwidths, powers, and antenna sizes with the most basic functions can also use the smallest level of terminals.”

While providing a core connection to an ordinary smartphone, the proposed service also requires the use of specific compatible terminal devices. The document states: “AST SpaceMobile's operation is not entirely dependent on the use of the E band; in addition to the E band, AST SpaceMobile will also use other spectrum for its user terminals, including the Q/V band and the 700/800 MHz band.”

Currently, the application is still subject to approval and interference coordination, including protection for military users within specific bands.

Valuation is being sniped by “veterans”: the bitter reality behind the 140x market-sales ratio

Meanwhile, veteran financial journalist and investment researcher Herb Greenberg questioned AST SpaceMobile's actual profit potential, even though its potential market continues to expand. He pointed out that the stock's market value has shrunk by more than half in the past six months, and recently hit a 52-week low.

“Even so, the market's valuation of it is still like hyping it up as the hottest asset in history, especially when compared to more mature satellite communication peers,” he pointed out sharply. Greenberg stressed that AST SpaceMobile's corporate valuation is 140 times the revenue of the past 12 months. In contrast, Globalstar is 38 times, Iridium is 7.5 times, and Viasat is only 3 times. He also pointed out that AST SpaceMobile has lost about $532 million in eBITDA over the past 12 months.

“If you dig deeper, you'll find that based on past multiples, you can't see that its network construction is still far from being fully completed,” he said. He made a further calculation: even if AST SpaceMobile could achieve $1 billion in revenue and $50 million in adjusted EBITDA in 2028, its valuation would still be as high as 16 times revenue and 324 times the adjusted EBITDA.

Greenberg acknowledged that “overvaluation” itself is rarely a reason to avoid or short a stock, but he also emphasized the stock's extremely high shorting ratio and Fidelity Investments' warning about pressure to borrow securities.

The business vision is ambitious, but compliance and competition challenges coexist

AST SpaceMobile plans to achieve initial intermittent coverage in the US, Canada, Japan, the UK, and Saudi Arabia by the end of the year, but is still subject to regulatory approval. To achieve continuous service, more satellites are needed.

“We are moving towards the goal of providing services that use partnerships, spectrum, and network capabilities to bring cellular broadband in space into people's everyday lives,” said Scott Wisniewski, president of the company.

The company has now deployed, installed, or planned more than 60 terrestrial gateways to support more than 60 mobile operators whose networks cover more than 3 billion users. The goal is to obtain access to 100 MHz of US spectrum by the end of the year and increase the number of active coverage areas from more than 3,000 to 5,600. Furthermore, its network for smartphones has achieved peak download speeds of 98.9 Mbps, and the next generation of satellites is expected to reach around 200 Mbps.

However, in addition to the challenges of its own construction and regulatory approval, AST SpaceMobile is also facing increasingly severe external competitive pressure. Earlier, SpaceX announced the acquisition of 800MHz low-band spectrum across the US. This move is seen as a key step in Starlink's transformation to an independent mobile operator. AST SpaceMobile's stock price suffered a severe drop after the news was announced. The market is concerned that once SpaceX has obtained low-band spectrum, it can make up for the shortcoming of satellite signals penetrating buildings to build a complete “satellite+ground” coverage capability, which may directly erode the competitive barriers between AST SpaceMobile and its operator partners.

This competitive pressure is also evident in overseas markets. Currently in Europe, Deutsche Telekom, Orange, Telefonica, and Vodafone are exploring a joint bid for mobile satellite spectrum, but the satellite provider has yet to be determined. On the other hand, Viasat challenged AST SpaceMobile's previous overseas spectrum application on the grounds of interference and spectrum allocation issues, claiming that it had “fatal flaws.”

Retail sentiment has cooled down, and long and short games have intensified

On the Stocktwits platform, retail investors' sentiment about AST SpaceMobile has slipped from “bullish” a week ago to “neutral,” and the 24-hour news volume dropped 29%.

A user took note of the latest application documents and said, “If I understand correctly, the SEC has just granted AST SpaceMobile the right to compete with Starlink, disrupting the competitive landscape in the home broadband market.”

Another user said, “AST SpaceMobile will be able to target Starlink's main business! I really didn't expect the market to expand so much all of a sudden!”