Greenhaven Road: AST SpaceMobile ($ASTS) Investment Case
Introduction In their Q2 2025 investor letter, Greenhaven Road Capital introduces AST SpaceMobile (ASTS) as a new investment representing the “widest range of potential outcomes” in their portfolio. Greenhaven positions ASTS as a high expected value investment with uncertain timing, fitting their core investment philosophy of targeting asymmetric opportunities with significant upside potential. The investment exemplifies their willingness to take calculated risks on pre-revenue companies with transformative technology and massive market opportunities.
Investment Highlight: AST SpaceMobile Inc. ($ASTS)
Business Overview
- Developing space-based cellular broadband network using satellite constellation
- Enables direct communication with unmodified smartphones using existing cellular bands
- CEO owns over 30% of outstanding shares (high insider alignment)
- Currently pre-revenue with approximately $1.5 billion in cash for growth phase
Market Position
- Targeting global coverage where traditional cell towers cannot reach
- Plans to launch 248 satellites into low Earth orbit
- Each satellite unfolds to 700 square feet (half a basketball court)
- Differentiated by satellite size enabling broadband capability on unmodified phones
Performance Analysis
- Technology Platform:
- Combination of low Earth orbit proximity, satellite size, and hundreds of patents
- Enables high-speed voice and data connectivity from standard smartphones
- Users could “stream Netflix in the middle of the ocean using unmodified iPhone”
- Strategic Partnerships:
- Current partners include AT&T, Verizon, Google, Samsung, Vodafone, Rakuten
- Collective reach of more than 3 billion people globally
- Leverages existing telecom infrastructure for billing and customer support
Growth Runway
- Current Status: Five satellites in orbit for proof of concept/testing
- Near-term Plan: Additional 60 satellites by end of Q1 2026
- Cash Flow Target: Breakeven (excluding growth capex) by end of 2025 with 25 satellites
- Revenue Ramp: Expected steep acceleration in H2 2025 as satellites come online
Market Dynamics and Opportunities
- Addressable Market: Military applications, first responders, primary mobile internet, underserved areas
- Target Markets: US, Canada, Japan, Australia, Europe (>1 billion subscribers)
- Defense Opportunity: Potential “Golden Dome” contract worth $25 billion in funding
- Competitive Advantage: Superior satellite size vs. Starlink’s limited texting capability with T-Mobile
Valuation and Investment Rationale
- Share price more than doubled since initial purchase
- High expected value with “substantially more upside than downside”
- Attributes sought: high insider ownership, recurring revenue potential, operating leverage
- Very low variable costs once constellation deployed
Risks
- Pre-revenue company with execution and regulatory risks
- Wide range of potential adoption rates and pricing scenarios
- Technology and deployment risks inherent in space-based infrastructure
- Competitive threats from established players like Starlink and Apple
Market Sizing and Economics
- Focusing on developed markets yields compelling numbers with >2% penetration
- Multiple pricing tiers expected: off-grid residents and outdoor enthusiasts (high-end) to peace-of-mind subscribers (low-end)
- Economics become “very attractive” assuming higher adoption rates and pricing
- Substantial free cash flow potential across various scenarios
Other Key Points
- Investment opportunity identified by Ryan O’Connor of Crossroads Capital
- Multi-year runway for outcome realization
- Leverages existing mobile network infrastructure rather than requiring consumer hardware purchases
- First responder partnerships with AT&T and Verizon for national park coverage
Greenhaven Road Capital views ASTS as a high-risk, high-reward investment with asymmetric return potential, emphasizing the transformative nature of the technology and the massive addressable market opportunity despite the inherent uncertainties of a pre-revenue space technology company.
