What other tech stock to consider?

[pz1975]

So, GreenPower Motor's price has stabilized at a slight discount or equal to anticipated offering price. They announced an offering price at $18-$22/share after the 7-1 reverse stock split. As I type this, it is trading up at $2.60/share (GPVRF), so that equates to 2.6 x 7 = $18.20 per share. The big unknown that the market is discounting right now is whether or not they'll be able to place $35M worth of shares on this when they start the roadshow in a couple of weeks. Personally, I think it is a slam dunk. There are a bunch of mutual funds and other institutional investors that cannot buy GPVRF on the open market right now because it is currently just listed as either a Canadian stock or OTC, neither of which many institutional shareholders can own. Not to mention that buying a $1M or more position right now would push the price around a lot (even at these new volumes, a $1M order is very big for this stock).

My guess is that this stock is oversubscribed and goes out at $22/share, which is equivalent to $3.14 for GPVRF. If I'm right, buying now would net you a 20% gain in a month and then see where it goes from there. If I'm wrong, then this stock will bop around its current price for a while until the company shows it can continue growing at 100% per year or so.

Except for Nikola, the stock prices for other speculative EV manufacturers seems to have calm down a bit (I'm leaving Tesla out of this since they aren't speculative anymore, they are an established growth company). We could be nearing a top of EV hysteria, and things will go back to normal. Maybe.

BTW, anyone else buy GPVRF, or am I alone here?

I bought some yesterday - thanks. I like to support Canadian companies, especially in the EV space.

 

[tivoboy]

NIO will probably get over 22$ easily at this point, but stay frosty. I’m going to start to sell my remainder at 20.75$

Indeed, I sold the rest of it today at 20.75$.. we’ll probably get mkt to make it to 25+ in the near term. I’m pretty much selling CC for Oct against all tech positions at this point. Actually exited all AAPL at $510. this was a five month double. (Don’t get me started on my 30 cents per share apple position I sold too early, but paid for all my grad school!). Prices IMHO are getting WAY too out of whack and I’m a net seller in many of these names. Re: TSLA... what will people say when Friday it closes at $2100? Also exited CRM at $275 (entries, 65, 101, 153)... this move was as well WAY too much too far too fast, even with DOW inclusion. I mean, who watches the DOW for MKT direction?

 

[chiller]

I also picked up a few GPV today. What would the difference be between owning GPV and GPVRF? Except for the different currency ofcourse.

 

[Cosmacelf]

I also picked up a few GPV today. What would the difference be between owning GPV and GPVRF? Except for the different currency ofcourse.

No difference. Both will be converted to Nasdaq GP when the IPO closes.

 

[juanmedina]

I might get in on Xpeng. Copying Tesla is not a bad strategy even if they have done it too much. Anyone know what day Xpeng is going to IPO? Rumor is sometime this week, but I do not know the day.

I might too. Has anyone done any research on Xpeng? Bjord Nyland seemed to really like their car and I watched a video in which they admitted that they end up using the patents that Tesla opened to the public to design their car.

 

[elasalle]

Any good companies in (Plastic Alternative/Bio Degradable products) to invest in? Or any new startups to follow?

 

[Nuclear Fusion]

I might too. Has anyone done any research on Xpeng? Bjord Nyland seemed to really like their car and I watched a video in which they admitted that they end up using the patents that Tesla opened to the public to design their car.

I just bought NIO & Li Auto. Will buy Xpeng when they list in the next day or so

 

[replicant]

Any reason not to by SQquare at its current price?

 

[Nuclear Fusion]

XPeng has listed today and jumped over 60%

 

[tivoboy]

Any reason not to by SQquare at its current price?

I’d wait for a pull back, but we’re heading to 200$.. so maybe scaling in is a best approach.

 

[NCC1701T]

Any reason not to by SQquare at its current price?

Looking at ARKW’s trades today they sold SQuare. Don’t know if this is helpful or not.

 

[vikings123]

So, GreenPower Motor's price has stabilized at a slight discount or equal to anticipated offering price. They announced an offering price at $18-$22/share after the 7-1 reverse stock split. As I type this, it is trading up at $2.60/share (GPVRF), so that equates to 2.6 x 7 = $18.20 per share. The big unknown that the market is discounting right now is whether or not they'll be able to place $35M worth of shares on this when they start the roadshow in a couple of weeks. Personally, I think it is a slam dunk. There are a bunch of mutual funds and other institutional investors that cannot buy GPVRF on the open market right now because it is currently just listed as either a Canadian stock or OTC, neither of which many institutional shareholders can own. Not to mention that buying a $1M or more position right now would push the price around a lot (even at these new volumes, a $1M order is very big for this stock).

My guess is that this stock is oversubscribed and goes out at $22/share, which is equivalent to $3.14 for GPVRF. If I'm right, buying now would net you a 20% gain in a month and then see where it goes from there. If I'm wrong, then this stock will bop around its current price for a while until the company shows it can continue growing at 100% per year or so.

Except for Nikola, the stock prices for other speculative EV manufacturers seems to have calm down a bit (I'm leaving Tesla out of this since they aren't speculative anymore, they are an established growth company). We could be nearing a top of EV hysteria, and things will go back to normal. Maybe.

BTW, anyone else buy GPVRF, or am I alone here?

It looks like today is the 7 for 1 consolidation. Any idea when is the IPO date? Sometime in the next few weeks is what I gather but no firm date.

I love how they call this out in their investor presentation:

 

[Cosmacelf]

It looks like today is the 7 for 1 consolidation. Any idea when is the IPO date? Sometime in the next few weeks is what I gather but no firm date.

Well, they caught me by surprise. IPO is done: GreenPower Announces Pricing of its Upsized U.S. Initial Public Offering

They sold $42.8M of shares including the overallotment today. It is trading as GP (nice ticker). The price has been gyrating a lot today on high volume, but has mostly stayed in the $20.30 to $21 range with a big spread (like $0.40). So, they've passed a huge hurdle. For the first time in their life they have real $$ in the bank and can actually plan with a medium term horizon. I like this company as a growth stock.

I love how they call this out in their investor presentation:

View attachment 581612

Yes, cute, but also true

 

[vikings123]

Well, they caught me by surprise. IPO is done: GreenPower Announces Pricing of its Upsized U.S. Initial Public Offering

They sold $42.8M of shares including the overallotment today. It is trading as GP (nice ticker). The price has been gyrating a lot today on high volume, but has mostly stayed in the $20.30 to $21 range with a big spread (like $0.40). So, they've passed a huge hurdle. For the first time in their life they have real $$ in the bank and can actually plan with a medium term horizon. I like this company as a growth stock.

Awesome, they definitely seem to have potential. They just seem to be missing a pumper in chief that can go on CNBC and twitter to talk about how they are changing the world.

 

[Cosmacelf]

SPACs. That is what seems to be driving a lot of market hype around EVs (other than Tesla, of course, which is not a SPAC).

Special Purpose Acquisition Corporations, also known as blank check companies, get born in an IPO raising typically hundreds of millions of dollars. They have 18 months from IPO to announce an acquisition, and 2 years from IPO to deploy the capital, or else they must return it to the IPO investors. The theory is that with public company P/Es reaching 22 or 24 on average, a SPAC can buy a private company at an 18 P/E and be ahead of the game.

However, due to the huge amount of money now being poured into SPACs (I watch recent IPO filings and it seems that 80% of new IPOs are now SPACs), there aren't enough quality private companies to go around, hence they start to buy speculative companies with negative earnings, or even no sales.

That's what NKLA was, a SPAC acquisition.

IMHO, the problems with SPACs is that the target company gets to go public with ZERO SEC oversight. No prospectus, no finicky SEC lawyers asking you to clarify or disclose things you'd rather not disclose. And the SPAC gets to artificially set the market cap of the acquired company. There is no market (bidding) mechanism to set IPO price. And maybe even worse, there is no built in institutional support for the stock price. In a normal IPO, you have institutions who buy the stock, and you have a plethora of brokerage companies (the underwriters) whose analysts follow the stock and issue reports. Those brokerage houses are incentivized to prop up the stock price so that they can earn the next lucrative IPO to come along. SPAC companies have none of this.

So, just buyer beware whenever you see a company going public via SPAC acquisition, or reverse merger into a public shell, or a direct listing. They've all bypassed the normal IPO process that has built in safety mechanisms for investors, and helps support the stock price.

Here's an interesting article talking about recent EV related SPACs: Little-known EV and lidar firms are raising billions in Tesla’s shadow

 

[NCC1701T]

SPACs. That is what seems to be driving a lot of market hype around EVs (other than Tesla, of course, which is not a SPAC).

Special Purpose Acquisition Corporations, also known as blank check companies, get born in an IPO raising typically hundreds of millions of dollars. They have 18 months from IPO to announce an acquisition, and 2 years from IPO to deploy the capital, or else they must return it to the IPO investors. The theory is that with public company P/Es reaching 22 or 24 on average, a SPAC can buy a private company at an 18 P/E and be ahead of the game.

However, due to the huge amount of money now being poured into SPACs (I watch recent IPO filings and it seems that 80% of new IPOs are now SPACs), there aren't enough quality private companies to go around, hence they start to buy speculative companies with negative earnings, or even no sales.

That's what NKLA was, a SPAC acquisition.

IMHO, the problems with SPACs is that the target company gets to go public with ZERO SEC oversight. No prospectus, no finicky SEC lawyers asking you to clarify or disclose things you'd rather not disclose. And the SPAC gets to artificially set the market cap of the acquired company. There is no market (bidding) mechanism to set IPO price. And maybe even worse, there is no built in institutional support for the stock price. In a normal IPO, you have institutions who buy the stock, and you have a plethora of brokerage companies (the underwriters) whose analysts follow the stock and issue reports. Those brokerage houses are incentivized to prop up the stock price so that they can earn the next lucrative IPO to come along. SPAC companies have none of this.

So, just buyer beware whenever you see a company going public via SPAC acquisition, or reverse merger into a public shell, or a direct listing. They've all bypassed the normal IPO process that has built in safety mechanisms for investors, and helps support the stock price.

Here's an interesting article talking about recent EV related SPACs: Little-known EV and lidar firms are raising billions in Tesla’s shadow

Thank you for the write up and good read!

 

[EV forever]

SPACs. That is what seems to be driving a lot of market hype around EVs (other than Tesla, of course, which is not a SPAC).

Special Purpose Acquisition Corporations, also known as blank check companies, get born in an IPO raising typically hundreds of millions of dollars. They have 18 months from IPO to announce an acquisition, and 2 years from IPO to deploy the capital, or else they must return it to the IPO investors. The theory is that with public company P/Es reaching 22 or 24 on average, a SPAC can buy a private company at an 18 P/E and be ahead of the game.

However, due to the huge amount of money now being poured into SPACs (I watch recent IPO filings and it seems that 80% of new IPOs are now SPACs), there aren't enough quality private companies to go around, hence they start to buy speculative companies with negative earnings, or even no sales.

That's what NKLA was, a SPAC acquisition.

IMHO, the problems with SPACs is that the target company gets to go public with ZERO SEC oversight. No prospectus, no finicky SEC lawyers asking you to clarify or disclose things you'd rather not disclose. And the SPAC gets to artificially set the market cap of the acquired company. There is no market (bidding) mechanism to set IPO price. And maybe even worse, there is no built in institutional support for the stock price. In a normal IPO, you have institutions who buy the stock, and you have a plethora of brokerage companies (the underwriters) whose analysts follow the stock and issue reports. Those brokerage houses are incentivized to prop up the stock price so that they can earn the next lucrative IPO to come along. SPAC companies have none of this.

So, just buyer beware whenever you see a company going public via SPAC acquisition, or reverse merger into a public shell, or a direct listing. They've all bypassed the normal IPO process that has built in safety mechanisms for investors, and helps support the stock price.

Here's an interesting article talking about recent EV related SPACs: Little-known EV and lidar firms are raising billions in Tesla’s shadow

Is GreenPower also a SPAC? Also, couldn’t find it under GP ticker, is it not active yet?

 

[Cosmacelf]

Is GreenPower also a SPAC? Also, couldn’t find it under GP ticker, is it not active yet?

GreenPower Motors is not a SPAC. They just closed on a Nasdaq secondary IPO today at $20/share. Since it is a brand new ticker, GP, it might not show on on your data feed yet. Yahoo finance, for instance, has it half right. You can do a search for GP and get pricing info, but the stock name is “undefined”. And the price action isn’t correct, it shows the closing price of 20.66 as a 6% loss on the day, but really, it is trading up from the IPO price.

 

[Cosmacelf]

Here's another growth company for you guys to research.

Everbridge (Critical Event Management, Keep Your People Safe & Operations Running), EVBG. They are a SaaS company that provides Critical Event Management for companies. Imagine you are anything from a restaurant chain to a worldwide manufacturing company and something happens like an earthquake or a more slowly moving disaster like a hurricane. You need to have a plan in place to deal with such events, and to communicate with only your affected employees during times when traditional communications might not work. Also, you need to make sure you know all affected people have gotten the message and are coordinating responses.

That's what Everbridge does, and it is kinda topical right now. From a financial point of view, they are busy rolling up their important competitors, which is going to leave them with the lion's share of the market. Like most SaaS companies, once a customer starts to use a SaaS package, it is very sticky, companies generally try to not move off a SaaS platform. In addition, companies will often start with a subset of functionality, or implement it across a test department first before rolling it out company-wide, meaning there is usually lots of natural sales upgrades.

And just to tie this company back to our favorite growth stock, Tesla had been using Everbridge's CEM platform just for their manufacturing facility (presumably in Fremont), and just recently decided to roll it out to all sectors of the company worldwide.

Anyways, this company has a solid balance sheet, is close to cash break even, and has a good acquisition strategy in addition to organic growth.

Disclaimer: I hold an investment in this company.

 

[junas]

Has anyone considered investing in Desktop Metal?

(current SPAC-ticker: TRNE, after merger: DM)
Full investor presentation: https://www.desktopmetal.com/uploads/Desktop-Metal-Investor-Presentation-FINAL.pdf

Pros:

• 3D-printing metal parts at industrial scale sounds like a promising business. There are no current competitors in the metal 3D-printing business AFAIK.
• JB Straubel and Chamath Palihapitiya on board (due diligence couldn't be in better hands)
• Strong cash position ($625M) after merger. They've probably enough to implement their business plan if 3D-metal printing really works at large scale.
• Economics compared to machining or casting parts. No-brainer if calculations are even closely accurate.
• High margin business (up to 60% gross margin according to Chamath & investor presentation). High margin possible due to recurring revenue from consumables such as powders and from service. All numbers are projections of course.

Cons:

• Valuation looks insane according to presentation: TRNE has a current market cap of $439M representing 12% of the new company. This means the break-even market valuation of DM is over $3,6B when merger is complete.
  • SPAC shares receive 12%
  • Founder shares 2%
  • PIPE equity 11%
  • Seller rollover 74%
• $15-25M estimated revenue and $64M estimated loss for this year. This means there is no any kind of proof of execution so far. Industrial hi-volume scale is not proven IMO.
• All existing 3D printing companies are trading with lower market caps: Protolabs $2,9B, Materialise $1,2B, Stratasys $800M, etc.
  
• Personally I'm skeptical when reading projected CAGR numbers. Could be true, but they are too good to be true.

Some investment thesis by Chamath: https://pbs.twimg.com/media/EgwtABtWoAAmnIa?format=jpg&name=large

Open questions:

1. Am I getting it right that break-even market cap is 3658M once merger is completed? I've never invested through SPAC because of the reasons explained by Cosmacelf few posts up. Therefore, it's possible I'm understanding the numbers wrong.
2. Does anyone know about patent situation?
3. Where the valuation exactly comes from? I understand DM cash position after merger (625M) makes some difference to competitor balance sheets, but where the remaining $3B comes from? Is it just the proof-of-concept technology to print metal in layers? Strong order book? Those optimistic CAGR-projections?
4. Is it easy for existing 3D-companies to compete in metal printing? If someone understands additive manufacturing in more detail I'd love to hear comments. I'm struggling to see why other companies couldn't print at industrial scale and eventually use metal as material.