AST is progressing. In January, its British partner, Vodafone, demonstrated what it claimed was a "world's first" video satellite call though AST satellites to a standard smartphone on a Welsh hilltop with no terrestrial coverage. In late January, the FCC authorized AT&T and Verizon to start testing AST's service on a few thousand phones each.

Providing voice service and some video to a demonstration phone is one thing. Serving up 5G-quality broadband concurrently to thousands of moving phones is a technical challenge.

"A modern cellphone is essentially an underpowered, poorly located satellite antenna for a cell tower in space," said Sara Spangelo, the co-leader of SpaceX's direct-to-cell program, at a conference a few years back. To better reach cellphones, SpaceX has asked the FCC to let Starlink satellites transmit at higher power and with narrower safeguards protecting neighboring frequencies from interference.

In common with other stocks that came to the market via SPAC deals, AST has a strong retail investor following. Some institutional fans recognize there is a degree of risk. AST is the single biggest holding in the Hennessy Focus fund, a high-conviction concentrated portfolio run by California-based Hennessy Funds. It recently removed a warning about the potential for a "complete capital loss" on the investment, but still classifies it as a "special situation."

Others remain skeptical. Some 27% of AST's free-trading shares have been sold short by those betting the stock will drop.

So far, AST SpaceMobile's celestial broadband quest has defied skeptics. Some of the world's biggest carriers have bought in, and five functioning satellites now fly overhead. For its numbers to work -- not to mention its stock -- it will have to find millions of callers willing to pay a premium above what rivals like SpaceX charge.

Write to Adam Clark at adam.clark@barrons.com and Bill Alpert at william.alpert@barrons.com

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February 12, 2025 03:00 ET (08:00 GMT)

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