Communications

Report by New Constructs

The latest reporting suggests SPCX is targeting a ~$1.75trn valuation, which would make it the largest IPO in history, but New Constructs argues the implied expectations are “out of this world”, with investors materially underestimating execution risk, competitive intensity and capital requirements. Their report highlights rapidly falling Starlink ARPU, misleading non-GAAP reporting and weak internal accounting controls, alongside governance concerns including minimal voting rights for IPO investors, extensive related-party transactions and potentially significant future dilution. They also note that ~80% of IPO proceeds are already earmarked for debt repayment and other obligations, while customer concentration risk remains elevated. New Constructs' reverse DCF analysis suggests the proposed valuation implies SPCX will ultimately generate both the highest revenue and highest NOPAT of any public company; sees >70% downside if revenue growth merely tracks historical rates.

Communications

Report by BWS Financial

The competitive landscape is intensifying and the existential risk for IRDM is getting bigger, according to Hamed Khorsand. The direct-to-device market is attracting well-capitalised entrants, with Amazon’s acquisition of Globalstar and Starlink’s expansion significantly increasing capacity and bandwidth relative to IRDM’s legacy network. At the same time, a proposed FCC rule could erode the exclusivity of IRDM’s spectrum, undermining a key pillar of its valuation. Customer behaviour is also shifting, with evidence of dual-sourcing and pricing pressure. While positive FCF has supported the equity story, Hamed expects rising investment needs to weigh on future generation. The recent advance in IRDM's stock makes it a good place to short/sell shares.

Communications

Report by New Street Research

New Street assesses the potential threat of Starlink to European telecom operators, emphasising that the risk comes primarily from Starlink’s direct-to-dish broadband service rather than the more publicised direct-to-device satellite offering, which they see as limited and possibly even accretive to mobile operators. Currently, Starlink's penetration in Europe is just 0.3-0.4%, with existing infrastructure supporting up to 1%. A full rollout of the V2 constellation could raise that to 1.4%, while a longer-term deployment of 15,000 V3 satellites could theoretically push penetration to 8-10%, though this would take over a decade. However, FTTH rollout, dish siting constraints and pricing remain key barriers, and New Street sees limited near-term disruption to wireline telcos.

Communications

Report by New Street Research

Analysts at New Street outline the most underappreciated telecom policy consequences of the election: the impact Elon Musk will have, if Trump is elected. They focus on 3 policies: 1) BEAD - Musk will seek to divert dollars from fibre deployments to subsidising Starlink service. 2) USF - he will attempt to see the scale of the USF programme cut back materially. 3) Spectrum (where Musk has the most to gain) - he will push for a variety of decisions in his favour, including Starlink gaining access to 2GHz spectrum currently used by Dish and Globalstar. While he will not win all these, he is likely to win some, and much more likely to win than the market appreciates.

AMZN just made history with the largest commercial launch contract ever, cementing Project Kuiper as Starlink’s most formidable competitor - in their new 9-page brief, space sector analysts at Quilty Analytics break it down, focusing on implications to the sector at large, including the three big contract winners (Arianespace, Blue Origin, ULA), the GEO market (Inmarsat, Intelsat, SES, Eutelsat) and other heavy-lift launch operators (Firefly Aerospace, Relativity Space, Rocket Lab).