Stone Fox Capital
Founder, CIO & Portfolio Manager of Stone Fox Capital
T-Mobile, AT&T and Verizon look vulnerable to Starlink's prospective entry as a mobile carrier: the incumbents have grown complacent and milked customers for too long. Starlink should disrupt them, favoring SpaceX. x.comÂ
AT&T faces downside risk from Starlink coming for cell plans; that competition looks set to leave a mark on the stock. x.comÂ
T-Mobile's discount to the Street's lowest target could make it a good trade despite the long-term competition risk. The stock trades 14% below that $169 target, offering a valuation-based counterpoint to the concern that even marginal competition could be disastrous. x.comÂ
SpaceX could need cell towers as a customer, turning Starlink's feared disruption into potential rent for tower REITs. Crown Castle, SBA Communications and American Tower could gain a tenant, while T-Mobile, AT&T and Verizon face a new competitor. x.comÂ
Verizon and AT&T face pressure as Starlink enters mobile service: Musk's entry into their market should make it harder for incumbents to retain share. x.comÂ
T-Mobile's operating-income growth has far outpaced its stock, which could make the share-price lag an overreaction. Fiscal.ai reports operating income up 114% over five years while the stock fell 1%. x.comÂ
AST SpaceMobile faces growing satellite-cellular competition beyond Starlink Mobile, which, per Starlink, agreed to acquire a nationwide US low-band spectrum portfolio. A later 5,105-satellite direct-to-cell system from Amazon tied to Globalstar is also a threat. AST's best chance is giving AT&T, Verizon and T-Mobile a fighting chance against them; that reliable Starlink Mobile service is a long way off doesn't matter. x.com x.com x.com x.comÂ
Starlink risks losing paying customers because service can fail at the provider's unilateral discretion. Its conduct in Ukraine is like insurance that fails to pay during a hurricane: zero incentive to keep paying and maximum incentive to bypass reliance on it. x.com x.comÂ
Debt, costly spectrum auctions and bad capital allocation make AT&T, Verizon and T-Mobile long-term laggards. They may rebound, but cannot keep pace with the S&P 500 or even weaker safety stocks. T-Mobile's Sprint-led growth is over with higher leverage; AT&T cut its dividend and spent heavily on Warner, while Verizon flip-flopped on fiber. High yields do not compensate. If forced to choose, AST SpaceMobile is probably the better gamble since legacy carriers have more incentive to support it. … Show more
AST SpaceMobile is the non-consensus winner of Starlink's IPO, because Starlink's aggression makes carriers more eager to fund their own satellite hedge. Every dollar Starlink takes from AT&T and Verizon pushes them toward AST, which runs through carrier billing and branding as a carrier-native partner rather than a competitor. AST has 60 carrier partners and $1.2B in contracted revenue commitments. The consensus that Starlink's listing finishes AST has it backwards. x.com x.comÂ