Newsletter · · Ashutosh Agarwal

AST Races SpaceX for Japan's Billion Dollar Sat Phone Prize - The Satellite & Space-Comms Race - Week of June 26, 2026

Satellite and space-comms newsletter for the week of June 26, 2026. Japan's $1 billion J-LEO direct-to-device award is a near-term binary for ASTS, while the record SpaceX IPO left ASTS down 49% from its late-May high as insiders hedge a basket of pure-play space names into the August lockup.

The Satellite & Space-Comms Race

Week of June 26, 2026: AST Races SpaceX for Japan's Billion Dollar Sat Phone Prize

The biggest IPO in American history landed this week, and the most interesting thing about it for our little corner of the market isn't the $2.7 trillion price tag. It's the wreckage it left on the launch pad next door. SpaceX went public, the whole space complex melted up into it, and then ASTS got taken to the woodshed, down roughly 49% from its late-May high. Meanwhile, a quieter, far more consequential story was unfolding 6,000 miles away in Tokyo, where a government is about to write a billion-dollar check for direct-to-phone satellite service. Let's get into it.

TL;DR

  • Japan's J-LEO award is a near-term binary for ASTS. A ¥150 billion ($1 billion USD) sovereign D2D contract; an internal decision was expected at end-June, public reveal July to August. AST/Rakuten are the frontrunner.
  • The SpaceX IPO is the macro overhang. Insiders can't sell yet, so the read on the Street is they're shorting a basket of pure-play space names, with ASTS the cleanest proxy for Starlink, into the August lockup.
  • Quiet week on Globalstar, Rocket Lab and Iridium. No dedicated podcast coverage; they surface only as read-throughs.

What's new

1. AST built a "sovereign satellite" blueprint, and it explains everything. On the AST SpaceMobile Podcast's "Billion Dollar Sovereign Satellite Blueprint" (Jun 25, operator/insider, a deep-DD retail analyst), the host laid out the structure: a JV ("Satco Japan") between Rakuten and AST in which the Japanese government's ~$1 billion buys BlueBird satellites and ground gear from AST, with the JV, not AST, owning the birds outright. The kicker is the sale-leaseback: when those Japanese-owned satellites fly over the US, Europe or Africa, AST and other carriers lease their capacity back. Why it moves numbers: it lets AST monetize a sovereign-funded constellation globally without diluting shareholders to build it.

2. The launch happened, and the year-end target quietly slipped. Per Kook's Weekly (Jun 23, operator/insider), BlueBirds 8, 9 and 10 went up on a Falcon 9 at ~2:38am on June 23 with a 100% detumble/hit-rate so far; BlueBirds 11 to 37 are in production. But the Jun 24 "Why SpaceX Insiders are Shorting ASTS" episode (investor) was blunt that the 45-satellites-in-2026 goal is dead: the next SpaceX launch is "the first week of August," with roughly four SpaceX launches booked for the year, pushing 45 birds into Q1/Q2 2027. The Blue Origin New Glenn pad explosion is part of why cadence is constrained.

3. Two regulatory wins you should not skip. Same episode: Brazil granted AST commercial approval plus 10 MHz × 10 MHz of S-band spectrum, at no cost, and Japan's MIC approved 700 MHz cellular spectrum for satellite D2D tied to the Rakuten partnership. Low-band spectrum is the whole ballgame for connecting an unmodified phone through rubble after an earthquake; these are hard regulatory milestones, not press-release fluff.

4. The most credible D2D voice this week wasn't an AST bull. On On Orbit (Jun 23), Skylo's Mindel De La Torre, ex-Chief of the FCC's International Bureau, now Head of Global Regulatory Affairs (operator/insider), said Skylo has crossed 17 million activations in under two years, is native in all Pixel 9/10 and Samsung Galaxy phones, has 84 certified devices/chipsets, and holds authorizations in 41 countries covering 72M+ sq km, with Verizon, Orange, Telefónica and Deutsche Telekom as MNO partners. Her tell for the bears: there are two regulatory "flavors" of D2D, and the one AST and SpaceX/T-Mobile chose, getting terrestrial spectrum reallocated for satellites, is "a much more complicated regulatory task."

5. SpaceX's valuation got marked by two of the most respected pencils in the business. On Excess Returns (Jun 19), Aswath Damodaran (pundit) pegged fair value near $1.3 trillion against ~$2.7T trading, noting Starlink is only ~$15 billion of revenue (60 to 70% of the company) and calling the $26 trillion AI TAM a narrative, not a number. On The Rundown (Jun 22), Morningstar's Nicholas Owens (investor) put a base case of $63/share, versus $200+ at the time, with a $129 billion Starlink TAM against SpaceX's claimed $1.6 trillion.

The debate: how big is direct-to-device, really?

Steel-man the bull. A sovereign government is about to commit ~$1 billion to D2D; Europe is reallocating 2 GHz spectrum to home-flagged constellations; Skylo's 17M activations prove consumers use the feature; and the US carriers' May JV is read by AST followers as a mechanism to "box out SpaceX" and route capacity through AST and FirstNet, potentially ~$1B/year of revenue. If D2D becomes table-stakes national infrastructure, this is a utility, not a science project.

Steel-man the bear. Damodaran's own framing is that connectivity is "a niche business," Starlink at $15B of revenue is the whole satellite-internet leader. Morningstar caps the realistic TAM at $129B, an order of magnitude below the trillion-dollar slides. The spectrum path AST chose is, per the former FCC bureau chief, the hard one. And the elephant: SpaceX's own IPO prospectus made explicit it's coming for terrestrial cellular. Pre-revenue, the bull case is a bet on flawless execution against the best launch operator on Earth.

Stocks in play

  • ASTS: Bull: Japan J-LEO win + Brazil/Japan spectrum + European JV + a CEO (Avellan) doing a non-dilutive prepaid forward on 5M of his ~78M shares, read as a confidence signal (Jun 23, operator/insider). Bear: 45-bird target slipped to 2027; short interest at all-time highs; convertible overhang. Next catalyst: J-LEO decision (July to Aug) and the first-week-of-August launch.
  • SpaceX/Starlink (private): Bull: unmatched launch cost advantage; Starlink dominance; Q1'26 connectivity revenue of $3.3B (69% of the company). Bear: fair-value marks of ~$1.3T (Damodaran) and $63/share (Morningstar) sit far below ~$2.7T; a brutal supply calendar. Next catalyst: Q2 earnings + the August lockup.
  • RKLB: Quiet week on Rocket Lab. The only read: its short interest rose alongside the IPO-era space-stock hedging.

Read-throughs

  • The SpaceX supply shock is the trade. On Chit Chat Stocks (Jun 24), ex-Goldman/Citi banker Rupert Mitchell (investor) walked the lockup calendar: roughly 150% of the float unlocks in early August (two days after Q2 earnings), another 455M shares if the stock clears $175.50, and ~1.3 billion more in November, taking the free float to ~8× its IPO size.

    "You are literally looking between now and November at a staggering amount of paper that's got to find a new home."

  • Why ASTS is the punching bag. The "Shorting ASTS" episode argues SpaceX insiders, locked up until Aug 20, are hedging via a basket of pure-play space names, and since connectivity is 69% of SpaceX, ASTS is the cleanest public Starlink proxy. That's a mechanical drawdown that should unwind into the lockup, not a thesis break.
  • Carriers (VZ, T, TMUS): all surface only inside the D2D plumbing, Verizon as a Skylo/AST partner, and the AT&T/Verizon/T-Mobile JV that may finally open T-Mobile to AST as its Starlink deal lapses "this month or next."
  • EchoStar/SATS & IRDM: read-through only. EchoStar is cited as an indirect SpaceX short and holds EU 2 GHz spectrum up for renewal in May 2027 (15 of 30 MHz to be steered to European entities). Iridium got a one-line mention as another possible connectivity short proxy.
  • Quiet week on Globalstar: GSAT surfaced only as the answer to a trivia question: it was the only company providing D2D (Apple's iPhone SOS) before Skylo lit up the Pixel.
  • Suppliers called out: Mitsubishi Heavy (H3) and Ariane as sovereign-launch options for AST; Blue Origin (New Glenn, post-pad-explosion); and Antonov cargo flights ferrying composite "donut rings" from India to Midland.

What changed vs last week

The signal flipped from euphoria to digestion. ASTS ran to ~$130 into the SpaceX IPO in late May, then gave back ~49%, partly the Blue Origin pad blow-up, partly proxy-hedging. The new, durable overhang is the SpaceX float calendar (August onward), which didn't exist as a tradable event a week ago. Quiet week on the incumbents and launchers, nothing new on Globalstar, Iridium or Rocket Lab.