Connect with us

Energy & Critical Metals

4 EV Infrastructure Stocks to Buy

EV infrastructure stocks are sure to see increased focus as EVs gain mass acceptance. Here are some of the best EV infrastructure stocks to buy.
The post…

Published

on

This article was originally published by Investment U

Electric vehicle sales are fast on the rise, which bodes well for top EV infrastructure stocks. Yes, the overall market share is still quite small with EVs accounting for about 2.4% of new vehicle sales in 2020, according to the International Council on Clean Transportation. Still, the sheer number of new EV sales has grown from just a few thousand in 2010 to over 315,000 new vehicle sales per year from 2018 to 2020.

To put it another way, EV sales have increased roughly 100 times since 2010. That being said, 2010 was the year the Nissan Leaf and Chevrolet Volt were released in the U.S. Plus, at that time Tesla was just a startup with no vehicles on the road, so EV sales were just beginning.

Regardless, EV sales have grown immensely in what is quite a short time in the auto industry. To support that immense growth, there must be infrastructure in place. While electric vehicles can be charged at home, that may not be possible for those with street parking, and rapid charging is needed for long-haul driving.

Thus, EV infrastructure stocks are sure to see increased focus as EVs gain mass acceptance. To support that transition, here are some of the best EV infrastructure stocks to buy:

EV Infrastructure Stocks to Buy

EV infrastructure stocks are sure to see increased focus.

No. 1 ChargePoint (NYSE: CHPT)

ChargePoint is the largest provider of charging infrastructure in the U.S. and one of the largest in the world with over 114,000 charging spots. Hence, it is naturally the first of the EV infrastructure stocks on this list. In addition to manufacturing charging stations, ChargePoint also designs the software used to operate its stations. It operates both 240-volt (level 2) charging stations as well as DC fast (level 3) charging stations.

Chargepoint currently has a market cap of about $8.3 billion and is currently trading below its December 2020 high. However, its share price has been steadily increasing since its low point of under $20 per share in October 2021. While the company has struggled to maintain consistent profitability, it has over $600 million cash on hand and is best positioned to benefit from the infrastructure bill, which contains funding for EV charging.

No. 2 EVgo (Nasdaq: EVGO)

EVgo is next on the list of best EV infrastructure stocks. EVgo is slightly different than ChargePoint in that it’s more focused on providing DC fast charging specifically. According to its website, it has more than 800 fast-charging locations ranging from 50 kW to 350 kW. For perspective, 350 kW charging can fully charge an EV in as little as 15 minutes.

While EVgo’s footprint may sound comparatively small, its market cap is nearly $4 billion and it is increasing the rate of its charging expansion, nearly doubling the rate of charging deployments in Q2 2021 compared to Q1 2020. Like ChargePoint, its stock is trading lower than its peak of $22, in this case in January 2021. However, its share price has surged of late, going from under $8 to almost $15 per share.

No. 3 Blink Charging (Nasdaq: BLNK)

Blink Charging is our next EV infrastructure stock to buy. Blink provides a network of charging stations for both homes and businesses and has deployed over 23,000 charging stations. Most of them are networked charging stations, meaning they are connected remotely to Blink’s charging network. Blink offers charging capacity of up to 175 kW and continues to expand rapidly.

Much like other EV infrastructure stocks, BLNK hit a high point in late January 2021 when it traded around $60 per share before falling to around $27 per share in early October. Since then, it has been increasing and is trading around $40 per share. Its market cap is nearly $2 billion and its revenue was up 177% year-over-year on its most recent earnings call, closing the quarter with $4.36 million in revenue.

EV Infrastructure Stocks to Buy No. 4 Volta (NYSE: VLTA)

Volta Inc. was founded in 2010 and is based in San Francisco. There are currently 2,102 charging stations in Volta’s network which it builds out in partnership with property owners. What is unique about Volta is that its charging stations feature displays that show large, full-scale ads, which gives Volta another way to bring in revenue. It offers both level 2 and DC fast charging.

As for this EV infrastructure stock, it peaked in mid-February at around $15. It bottomed out at around $6.75 in mid-October 2021 and has been climbing since then, recently trading between $11 and $12. As for its market cap, it sits at $1.96 billion. Like most EV infrastructure stocks, Volta is not yet profitable; its profit margin for the quarter ending June 2021 was -297%. Still, that was an increase of 41% year-over-year. In addition, its revenue was up 192% YoY to $6.94 million.

Are EV Infrastructure Stocks a Good Investment?

Using the typical indicators of a good investment (especially profitability), it may not seem like these are the best EV infrastructure stocks. Most of these companies are in the red in that area as it stands now. However, we should remember that the electric vehicle market more broadly is quite new; it only started to come to life in 2010. And these companies began to scale up in the years since.

Thus, EV infrastructure companies are still in the growth phase, and many of them are posting year-over-year gains in revenue and profit margin (even if their profit margin is still negative). As the market matures, we can look to those that are already dominating, such as ChargePoint, to see continued success. And perhaps one or two other charging providers will emerge as market contenders.

Of course, there is an inherent risk in this market. All of these companies are relatively new and don’t have long track records of profitability. While EV charging more generally isn’t going anywhere, the market is still evolving, and we don’t yet know who the equivalents of Exxon, BP and Shell will be yet in the charging infrastructure world.

If you’re looking for the most up-to-date opportunities on the best EV stocks, sign up for the Profit Trends e-letter below. You’ll hear directly from energy and trend investing experts. Sign up today!

Thus, while EV infrastructure should be a dependable investment going forward, we are still watching to see who the real household names will be. Until then, the best we can do is invest in those that are already dominating, such as ChargePoint, as the market continues to mature.

The post 4 EV Infrastructure Stocks to Buy appeared first on Investment U.

Author: Bob Haegele

Energy & Critical Metals

Cybernetic Technologies Ltd (OTCMKTS: HPIL) Heats Up as Co Sells NFT Procurement, Secures Equity Credit Line as Apogee Dynamics, Medusa Intel, World Gaming Group & ZIPPA Gain Traction

Cybernetic Technologies Ltd (OTCMKTS: HPIL) is a little Company trading in sub penny land that continues to make big moves and has a huge investor following…

Cybernetic Technologies Ltd (OTCMKTS: HPIL) is a little Company trading in sub penny land that continues to make big moves and has a huge investor following that continues to accumulate at current levels. The stock has been getting noticed by investors ever since top-level music executive Stephen Brown of Crank Media who took his last Company from nothing to value at over $500 million on the NASDAQ took over the Company. HPIL officially changed its name to Cybernetic Technologies, Ltd. affected a major share reduction with plans to change its ticker symbol to CYBT. CEO Stephan Brown is aggressively focused on getting all the filings in and becoming “pink current” and up listing to OTCQB with the longer-term plan of up listing to the NASDAQ.  

The Company boasts a number of exciting divisions including Apogee Dynamics Ltd. which is developing its own electric auto named “APOGEE D7” using the powertrain developed by L. Ferrox Tutinean. Apogee also recently signed an NDA with ANSYS to enter into discussions about how the two will work together on the companies Apogee D7 and its Power Train Management System, currently in development. ANSYS is a component of the NASDAQ-100 index currently trading at $358 per share. Cybernetic has also launched a new subsidiary company Medusa Intel Technology Ltd., to enter into the world of Artificial Intelligence (“AI”). The Company’s World Gaming Group Inc. division is currently launching 2 games; Santa Run and Get Santa. Another very exciting division of HPIL is “ZIPPA” a unique multi gaming global platform for gamers that will be housed at www.zippa.gg and is set to compete with the likes of “TWITCH”,”TIKTOK and “TRILLER”. ZIPPA is now in the internal Beta testing stage and will move to a formal Beta program in November that will include Pro-Gamer partners.  HPIL recently sold its NFT Procurement LTD division to Stargaze Entertainment Group Inc. who will issue 60 million shares of STGZ to HPIL. STGZ is currently trading at $0.1342 making HPIL’s 60 million shares worth around $8 million in STGZ stock. HPIL will be filing a registration statement within 30 days to then be able to disperse the shares to HPIL shareholders on a designated plan.  Earlier this year HIPL secured a Ten Million Dollar equity credit line with Auctus Fund LLC. 

Cybernetic Technologies Ltd (OTCMKTS: HPIL) operating out of Vancouver, Canada is a worldwide diversified company developing projects with cutting edge technology. New HPIL CEO Stephen Brown is the founder of a successful Independent Record label in the 90’s, Mr Brown went on to form a ground breaking streaming video company called Vidnet with the vision that the Internet would eventually have a major position in the Music and Film distribution market. Vidnet became one of the top entertainment sites on the web, streaming over 5 million videos monthly and providing content to such companies as British Telecom, Microsoft, Disney, Lycos, Alta Vista and many more, along with industry alliances such as entertainment giants, Sony Music, Warner Bros and EMI Capital. Vidnet had one of the world’s largest collections of music videos on line. Mr Brown built the company from 5 to over 100 employees; and also took the company public on the NASDAQ, reaching a market cap of over $500M.   

Also on the executive management team is President, David Postula. David is a seasoned senior executive with broad experience driving strategy, business optimization and revenue growth across a number of technology segments. He has a true passion for new technology and business strategy, which he brings to his role with Crank Virtual a division of Crank Media. Prior to joining Crank Virtual, David was Vice President of Strategy and Business Development for Tower Semiconductor, where he was responsible for driving strategy, roadmaps, and both customer & partner alliances in support of $1B of 2020/2021 Revenues. Before that, David was the Vice President of NA Sales at Global Foundries, where he co-created, implemented and executed a sales strategy that exceeded new customer and revenue targets by 20%.

Perhaps the most exciting part of HPIL is Apogee Dynamics Ltd. The Company joined forces with a group led by L. Ferrox Tutinean to launch Apogee a Company that Cybernetic Technologies is a majority owner. In regards to Apogee Dynamics we learned in the call that a major investors and shareholder in the Company contacted Stephan Brown about L. Ferrox Tutinean self-charging drive train. It is a highly disruptive early-stage technology that allows electric cars, boats and motorcycles to be charged while in use instead of being charged by plugging them in like tesla and other EVs. This technology is still in its early stages however Stephan Brown has been making rapid progress. The Apogee Dynamics website should also be updated in the next 30 days and Mr. Brown has already teased some developments with the D7 as well as key partnerships.  

Cybernetic reported it has decided to develop its own electric auto named “APOGEE D7” using the powertrain developed by L. Ferrox Tutinean and Apogee Dynamics Ltd. The plan for the new Apogee D7 is a 4-seater vehicle that will not only use the new Apogee powertrain it will have up to 10 partners all utilizing their DISRUPTIVE business models from Technology, Green, Materials and Media that will challenge the future of the auto industry as it is known today. All partners will have their imprint on the vehicle and will be an instrumental part of its functionality. Cybernetic signed an NDA with ANSYS to enter into discussions about how the two will work together on the companies Apogee D7 and its Power Train Management System, currently in development. ANSYS is a component of the NASDAQ-100 index currently trading at $358 per share with a market capitalization of over $3.5 billion and 2020 revenues over $1 billion and over 4,000 employees. 

The Company recently signed an LOI with the representatives of the Michael Czysz estate to develop a proof-of-concept Electric Motorcycle under the Apogee Dynamics Power Management System. This brings together revolutionary Apogee technology with Electric Motorcycle world-champion pioneer MotoCzysz, whose legendary visionary, Michael Czysz, passed away in 2016. Management stated they are excited to be moving to a long-form agreement with MotoCzysz on this thrilling project. As early innovators in the Electric Vehicle space, they are a perfect match to what Apogee aspires. Their E1pc raced on the cutting edge of EV technology, winning 4 Isle of Man racing championships. Apogee’s powertrain system will provide a unique profile in the Electric Motorcycle segment, providing both advanced power distribution as well as unrivalled range.  

To Find out the inside Scoop on HPIL Subscribe to Microcapdaily.com Right Now by entering your Email in the box below

HPIL

Cybernetic Technologies has launched a company Medusa Intel Technology Ltd a subsidiary to enter into the world of Artificial Intelligence (“AI”) along with select partners the company has been working with for the past few months. Medusa was created over a span of 30 years by  L. Ferrox Tutinean of Apogee Dynamics / CT (HPIL).  Medusa Intelligence a division of Cybernetic Technologies Ltd (the “Company”) (OTC: HPIL) announces it will launch META DATA ANALYTICS a tracking program that will use algorithms along with its own program to be used in the entertainment industry first and to then potentially expand in to other areas.“We are so excited about the Medusa (AI/Artificial Intelligence) “Meta Data Analytics” project that we hope to change how the internet and the human thought process could change its purchasing decisions”, said Stephen Brown. 

Another division of HPIL is World Gaming Group Inc. which has been involved in blockchain projects and have developed “GAMEZCASH” and “TUNEZCASH” that are to be used as a new form of currency in the esports/gaming world and the online music industry.  World Gaming Group will soon be launching one of its many games in development “SANTA RUN”. A mobile game app with many fun elements for all ages within the app with players able to win great prizes. Santa Run is a holiday themed endless runner game, where consumers play against friends and others to challenge for the highest score and win great prizes. Management has been plans for the game recently comparing it to Candy Crush. They also recently reported it will launch its long awaited mobile game “GET SANTA” officially on December 1st, 2021. 

The Company recently finished building “ZIPPA” a unique multi gaming global platform for gamers that is set to launch on September 1, 2021. The platform will be housed at www.zippa.gg and is set to compete with the likes of “TWITCH”,”TIKTOK and “TRILLER”. ZIPPA has been working diligently to separate itself from Tik Tok and Triller and concentrate fully on the ESports/Gaming industry as the revenues are 4 times more: The valuation and revenues are simply amazing and ZIPPA with its unique approach and partnerships plans on capitalizing on this and expanding into other similar markets in 2022. ZIPPA is now in the internal Beta testing stage and will move to a formal Beta program in November that will include Pro-Gamer partners. 

For More on HPIL Subscribe Right Now!

HPIL is a little Company trading in sub penny land that continues to make big moves and has a huge investor following that continues to accumulate at current levels. The stock has been getting noticed by investors ever since top-level music executive Stephen Brown of Crank Media who took his last Company from nothing to value at over $500 million on the NASDAQ took over the Company. HPIL officially changed its name to Cybernetic Technologies, Ltd. affected a major share reduction with plans to change its ticker symbol to CYBT. CEO Stephan Brown is aggressively focused on getting all the filings in and becoming “pink current” and up listing to OTCQB with the longer-term plan of up listing to the NASDAQ. The Company boasts a number of exciting divisions including Apogee Dynamics Ltd. which is developing its own electric auto named “APOGEE D7” using the powertrain developed by L. Ferrox Tutinean. Apogee also recently signed an NDA with ANSYS to enter into discussions about how the two will work together on the companies Apogee D7 and its Power Train Management System, currently in development. ANSYS is a component of the NASDAQ-100 index currently trading at $358 per share. Cybernetic has also launched a new subsidiary company Medusa Intel Technology Ltd., to enter into the world of Artificial Intelligence (“AI”). The Company’s World Gaming Group Inc. division is currently launching 2 games; Santa Run and Get Santa. Another very exciting division of HPIL is “ZIPPA” a unique multi gaming global platform for gamers that will be housed at www.zippa.gg and is set to compete with the likes of “TWITCH”,”TIKTOK and “TRILLER”. ZIPPA is now in the internal Beta testing stage and will move to a formal Beta program in November that will include Pro-Gamer partners.  HPIL recently sold its NFT Procurement LTD division to Stargaze Entertainment Group Inc. who will issue 60 million shares of STGZ to HPIL. STGZ is currently trading at $0.1342 making HPIL’s 60 million shares worth around $8 million in STGZ stock. HPIL will be filing a registration statement within 30 days to then be able to disperse the shares to HPIL shareholders on a designated plan.  Earlier this year HIPL secured a Ten Million Dollar equity credit line with Auctus Fund LLC. We will be updating on HPIL when more details emerge so make sure you are subscribed to Microcapdaily so you know what’s going on with HPIL.

Disclosure: we hold no position in HPIL either long or short and we have not been compensated for this article.

The post Cybernetic Technologies Ltd (OTCMKTS: HPIL) Heats Up as Co Sells NFT Procurement, Secures Equity Credit Line as Apogee Dynamics, Medusa Intel, World Gaming Group & ZIPPA Gain Traction first appeared on Micro Cap Daily.

Author: Boe Rimes

Continue Reading

Energy & Critical Metals

Canadian Lithium Developer Receives US$100 Million Equity Infusion from Leading US Investment Group

Source: Streetwise Reports   11/24/2021

Standard Lithium Ltd.’s shares rose 22% after the firm reported that a Koch Investments Group subsidiary…

Source: Streetwise Reports   11/24/2021

Standard Lithium Ltd.‘s shares rose 22% after the firm reported that a Koch Investments Group subsidiary has agreed to make a strategic investment in the company of CA$127.07 million via a direct private placement.

Lithium project developer Standard Lithium Ltd. (SLI:TSX.V; SLI:NYSE American), which is engaged in development, extraction and production of lithium carbonate, today announced that “Koch Strategic Platforms (KSP), a subsidiary of Koch Investments Group, will make a US$100 million investment in Standard Lithium through a direct private placement to support the company’s strategic development goals.”

The companies noted that the KSP’s decision to invest in Standard Lithium was made after extensive due diligence regarding Standard’s LiSTR DLE technology, its Lanxess project’s demonstration plant and its project development plans.

In addition to the direct equity investment, the two firms expect to pursue strategic opportunities with other Koch Industries affiliate companies to achieve Standard Lithium’s project development objectives. Specifically, the firms mentioned that Koch Engineered Solutions (KES) will be an excellent collaborative partner that can provide key process equipment, engineering, procurement, and construction services and Koch Minerals & Trading (KM&T) is well suited to handle trading of required materials and lithium products produced.

The company advised that the net proceeds from the investment will be used to continue and accelerate its first commercial Lanxess facility project and to advance its South West Arkansas Lithium Project. The funds will also be utilized to further improve and commercialize Standard’s modern lithium extraction and processing technologies that in turn will allow for even greater project expansion.

Standard Lithium’s CEO Robert Mintak commented, “We’re entering an important phase for Standard Lithium and we’re thrilled to be starting it with a globally recognized industrial leader like Koch Strategic Platforms as a partner…KSP has an impressive track record of investing in disruptive technologies and their backing is an important endorsement of the Company’s core technology, development plans and of our intent to make the Gulf Region a leading supplier of lithium resources.”

Koch Strategic Platforms’ President David Park remarked, “KSP is focusing on investing in companies with strong tailwinds that are disrupting the market as we know it. We are excited to invest in Standard Lithium as they pave a path forward towards lithium production here in the U.S. This is an exciting time for energy transformation and we believe KSP’s investment in Standard Lithium can help accelerate the production of lithium resources right here at home.”

The report indicated that through a direct private placement, KSP will invest a total of CA$127.07 million (US$100.0 million) in Standard Lithium. In exchange, KSP will receive 13,480,083 of Standard Lithium’s common shares at a price of CA$9.43 (US$7.42). The transaction is conditional upon adherence to certain statutory resale restrictions under U.S. and Canadian securities laws and remains subject to ordinary closing conditions and approval from TSX Venture Exchange.

Standard Lithium Ltd. is a lithium development and production company headquartered in Vancouver, B.C. The firm at present is engaged in testing and proving commercial viability of lithium extraction from greater than 150,000 acres of permitted brine operations at its Lanxess Project in southern Arkansas. The firm stated that at its flagship Lanxess south plant facility, it has it has commissioned “a first-of-a-kind industrial-scale direct lithium extraction demonstration plant that utilizes its proprietary LiSTR technology to selectively extract lithium from Lanxess’s tail brine.”

The company mentioned that its processes are environmentally friendly as there is no need to build evaporation ponds. In addition, Standard’s methods significantly reduce processing time and enhance lithium recovery yields. The firm noted that it is also actively pursuing a 30,000-acre property package of lithium resources in southwest Arkansas offering brine leases as well as 45,000 acres of mineral leases in San Bernardino Co., Calif.

Koch Strategic Platforms has offices in Atlanta, Ga. and Wichita, Kan. and is one Koch Investments Group’s six key subsidiaries along with Koch Asset Management, Koch Disruptive Technologies, Koch Equity Development, Koch Investment Management and Koch Real Estate Investments. KSP was established in 2020 with its efforts centered around making key strategic investments in both public and private high-growth companies across many industries that demonstrate innovative and disruptive potential.

Standard Lithium started the day with a market cap of around $1.3 billion with approximately 147.4 million shares outstanding. SLI shares opened more than 11% higher Friday at $9.68 (+$0.98, +11.26) over Thursday’s $8.70 closing price. The stock traded Friday between $9.18 and $10.74 per share and closed for trading at $10.63 (+$1.93, +22.18%).

Sign up for our FREE newsletter at: www.streetwisereports.com/get-news

Disclosure:
1) Stephen Hytha compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

 

( Companies Mentioned: SLI:TSX.V; SLI:NYSE American,
)





Author: Author

Continue Reading

Energy & Critical Metals

President Trump’s Social Media SPAC Could Now Have Interesting Risk-Reward Characteristics

Former U.S. President Donald Trump’s SPAC stock, Digital World Acquisition Corp. (NASDAQ: DWAC), has reversed ~60% of the outsized gains
The post President…

Former U.S. President Donald Trump’s SPAC stock, Digital World Acquisition Corp. (NASDAQ: DWAC), has reversed ~60% of the outsized gains it realized in the first two days (October 21 and 22) after its merger agreement was announced. The decline may have created a second potential entry point for this extremely volatile — and controversial — stock.

On October 20, President Donald Trump, perhaps the most polarizing world figure in decades, announced an agreement whereby the Trump Media & Technology Group (TMTG) will merge in a SPAC transaction with SPAC sponsor DWAC. TMTG intends to launch a conservative social network called TRUTH Social. Ultimately, after regulatory and shareholder approval, TMTG would become the surviving publicly traded company.

Details on the venture are scarce, but TRUTH Social plans to launch for invited users before year-end 2021 and hopes to be available to all users in early 2022. The company also expects to create a subscription video-on-demand service.

The principal issue which has affected the stock, particularly over the last week, seems to be a late October report by The New York Times that DWAC’s founder Patrick Orlando may have been in discussions with President Trump for months prior to DWAC’s public market listing in September 2021. According to U.S. law, a SPAC sponsor is not supposed to have a merger “pre-planned” at the time of its IPO. 

Such discussions can begin only after the empty-shell SPAC sponsor has begun trading on a stock exchange. The thinking is that having an agreement worked out beforehand would make it too easy for private companies to go public via a SPAC transaction and therefore avoid the long, detailed and sometimes convoluted SEC S-1 filing process.

The Trump discussion timing issue received more headlines on November 18 when U.S. Senator Elizabeth Warren, a vocal opponent of President Trump, wrote an open letter to SEC Chairman Gary Gensler, asking him to investigate the matter. Senator Warren suggested there could be violations of securities laws and requested an answer by November 29. According to Reuters, a spokesperson for the SEC has declined comment, saying merely that the SEC does not “comment on the existence or nonexistence of a possible investigation.”

When TMTG and DWAC announced their merger agreement, TMTG said the enterprise value (EV) of the company will be US$875 million. An undefined US$825 million provision was also mentioned which could bring the initial EV to US$1.7 billion. We note these figures are presumably based on an initial US$10 share price, as is the convention with SPACs. 

Since DWAC is trading at US$39.48 (down from a US$94.20 close on October 22), the current implied EV could be around four times these US$875 million/US$1.7 billion figures, or US$3.5 billion to US$7 billion. Reflected in these calculations is some portion of the US$293 million of cash that DWAC has in trust. This cash will initially fund the launch of TRUTH Social. It is not clear if the DWAC-TMTG venture will include private investment in public equity (PIPE) financing that is typically part of SPAC transactions.

We emphasize this is a quite unusual SPAC transaction. In a typical SPAC deal, the underlying business may not yet be generating revenue, but it is at least operating (e.g., electric vehicle SPACs). TRUTH Social is not yet even operating. In addition, the Trump venture provides no forecast information. Since such forecast information is used to justify (frequently inflated) SPAC valuations, this raises the question of how the initial enterprise valuation was determined.

However, Trump supporters are very loyal and may be inclined to support his venture enthusiastically. Many Trump supporters could very well join his platform, including as paying subscribers, particularly given the rapidly approaching (November 2022), highly contentious mid-term Congressional elections. President Trump seems likely to play a large role in these contests.

To put this in numerical context, President Trump at his peak before he was barred from appearing on various social media outlets, had 146.5 million total followers on Twitter, Facebook and Instagram combined. If even a fairly small fraction of these followers were to join TRUTH Social, that platform would have many tens of millions of members.

From a comparative economic perspective, consider the following: Twitter currently has 436.4 million users including 211 million monetizable daily active users. Its stock market value is about US$38 billion. While the number of active users is far from a direct link to stock market capitalization, it does not seem impossible that TRUTH Social could achieve a daily active user base (and therefore an advertising audience) of perhaps a third of President Trump’s previous total followers, or around 50 million. Based on Twitter’s valuation, the market could value such a venture at significantly more than just US$3.5 to US$7 billion — even factoring in the uncertainty regarding SPAC timing discussions between President Trump and DWAC.

Admittedly, DWAC is a difficult-to-analyze stock, as information on its financials and business plan are far from complete. However, for an active investor with high risk tolerance, the stock’s 60%+ collapse over the last month may be overdone. It is, after all, unclear if the SEC will choose to investigate the TMTG/DWAC SPAC transaction, and, even if it does so, what remedy/penalty that regulatory body would require or impose.


Information for this briefing was found via Edgar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

The post President Trump’s Social Media SPAC Could Now Have Interesting Risk-Reward Characteristics appeared first on the deep dive.

Author: Jim McFadden

Continue Reading

Trending