SpaceX fixed Starlink’s biggest weakness this week.
If you’ve never used Starlink, you put a dish about the size of a pizza box outside and you’re connected. I’ve sent text messages by satellite miles out in the open ocean, with no cell service and no land in sight.
But Starlink has one weird problem.
You need a clear sky, or what the engineers call line of sight. Satellite signal doesn’t pass through walls, and AT&T’s CEO has argued publicly that this would keep Starlink from ever competing with the phone companies.
The Old Walkie-Talkie Spectrum That Crushed The Phone Stocks
Spectrum is the slice of radio frequencies a phone network uses to send signals, and the government licenses it like real estate. Remember when you could use your cell phone as a walkie-talkie? That was Nextel, and it ran on 800 megahertz.
800 megahertz is freaking awesome at passing right through walls, any kind of wall. And it was almost like a distressed asset.
T-Mobile sold its 800 megahertz holdings to an investment firm called Grain Management in August, and this week, SpaceX agreed to buy all of it. The deal still needs FCC approval, but SpaceX says most phones people already own support this frequency.
That’s the final piece of the puzzle. Now SpaceX can build a cell network from space that works inside buildings.
On Friday morning, T-Mobile was down about 10%, and AT&T and Verizon were each down about 7%. They didn’t see this one coming.
Why I’d Buy SpaceX At $100 But Not At $160
Mark my words, SpaceX is the eye of the storm for AI. I honestly think this thing will be huge.
I’m still not buying it up here around $160. I’ve been selling puts down around $105, which means I get paid upfront for agreeing to buy the stock if it falls that low.
At $100, I’d buy it. Up here, I don’t care if it goes to $800, I wouldn’t buy it.
My problem is the market. The bonds and notes are sitting right at their lows, and if they break, the S&P breaks with them. This market is a powder keg right now.
We may love a particular stock, but you don’t buy it because of the market. I don’t like the market right now. I don’t have to like it, and I don’t even want to like it.
To your success,
Don Kaufman
