SPACs have gone through an entire market cycle in about 3 months.

The CNBC SPAC 50 index began the year on a tear, peaked out in mid February, based for two months, and, in the last few days, seem to be breaking out again.

Source: CNBC.com

Does that mean its time to look for the next great electric vehicle SPAC?

Uh, no.  I am going in a different direction on this one.

Let me introduce you to one of the oldest-newest public companies – Algoma Steel.  Algoma is going public (again) through a SPAC with Legato Merger Corp (LEGO – NASDAQ).

Once the merger is complete Algoma will be one of the cheapest steel plays out there.  And because it is a SPAC, there is a very interesting way to play the upside.

I will fill in the details shortly.  But first, let’s recap what has been going on in the steel market.

Steel prices have been going up like crazy this year.  Hot-rolled-coiled steel (HRC) prices in the U.S have topped $1,600 per tonne.  That is more than double what the 5-year average.

Source: BMO Capital Markets

Last week BMO Capital Markets raised their price forecast for U.S HRC steel for 2021 and 2022.

Overall, we maintain our view that prices are likely to remain well above historical averages for the remainder of 2021 and 2022. While we still assume prices will decline somewhat in 2H’21, our “higher-for-longer” view continues to push higher-for-longer.

Yet steel stocks are taking a breather.  After big moves over the first 4 months of the year, since mid-May the steelmakers have tread water.

Source: Stockcharts.com

I think what we’re seeing is the typical commodity response – as prices go up, multiples come down.  The old wisdom is to buy commodity stocks when multiples are high and sell when they are low.

That is the right thing to do – most of the time.  But BMO thinks the stocks are way underperforming their underlying businesses.

Excessive multiple compression, exceptionally high free cashflow yields, and limited participation in recent underlying pricing gains each suggest most equities continue to lag this pricing cycle.

The stocks in BMO’s coverage universe are trading at about a 4x EBITDA multiple and change.

Source: BMO Capital Markets

What’s my take?  At 4x EBITDA, with steel way, way above its long-term trend line, I think a lot of the meat is already off the bone.

However, if you gave me a multiple that is half that, well I would get interested.

Enter the SPAC Legato Merger Corp and their recent merger partner – Algoma Steel.

Legato is an Eric Rosenfeld SPAC – he was one of the principles of Long-Term Capital Management – the hedge fund that almost cratered the world way back in 1998.

Legato completed its IPO back in January.  While some SPACs take their time to find a merger candidate (it can often be 2+ years), Legato did not.  Two weeks ago, Legato signed an agreement to merge with Algoma Steel.

Yes, that Algoma Steel.  Algoma is a 100-year-old company (117 years in fact).  It has been a Canadian institution with operations on the shores of Lake Superior in Sault St. Marie for longer than any of us have been alive.

Not surprisingly, Algoma has gone through tough times.  Algoma had to declare bankruptcy in 2015.

When Algoma exited bankruptcy 3 years later, in 2018, it emerged a much stronger company. 

Algoma did not lay off a single employee during its time in bankruptcy, instead hiring over 300 new ones – an impressive fact.  But they were able to get employee costs under control. 

Through the bankruptcy process they were bel to cap their pension and health care obligations which had hung around their neck like an albatross, replacing them with capped payments tied to profitability and cash flow.

With the new structure Algoma can forecast cash flow and plan growth.   

Algoma raised capital coming out of bankruptcy, $300 million, and used it to modernize the business. 

Algoma now operates the only facility in Canada capable of converting liquid steel directly into steel coils.

As a Canadian institution and large employer, Algoma has also been helped by the Federal government.  The Feds contributed $150 million in grants in 2019 towards improving productivity and implementing new technologies.

Make no mistake, Algoma may be an old company, but this is not some old and poorly run steel operation.

Algoma operates a high-tech facility that already has best in class costs.  In fact, Algoma’s operation is right at the bottom of the cost curve for North American producers.

Source: Legato/Algoma Merger Presentation

But Algoma is only getting started.

Algoma plans to use the $300+ million of cash from the merger – this includes $200+ million from the SPAC and another $100 million from a PIPE investment which I have heard is very well subscribed for – to convert their line from a high-emission blast furnace mill to a low emission EAF mill.

Source: Legato/Algoma Merger Presentation

The EAF mill uses scrap metal instead of iron ore and coking coal.  As a result, the conversion will make Algoma one of the lowest carbon emission steel producers in the world.

But this is about more that just carbon.  The mill will also increase capacity by 30% and reduce costs – adding $150 million in annual EBITDA when it is completed in 2024.

Most important, EAF steelmakers (Nucor (NUE – NYSE) being the prime example, trade at a healthy premium to their blast-furnace brethren.

Source: Legato/Algoma Merger Presentation

Algoma currently sits with a cash position of $320 million (including the SPAC and PIPE cash) and debt of $485 million.  That net debt position of $165 million means Algoma is far from being levered bet.

The terms of the SPAC merger include layers of earnout shares for the existing Algoma owners.  Those earnouts are all based on this year’s numbers – if Algoma hits $900 million of EBITDA this year the full earnout will be achieved.

With steel prices at current levels that seems a given.  Assuming a full earnout there will be 153 million Algoma shares outstanding when it is said and done.  At $10 a share that is a $1.5 billion market cap.

Tag on the next debt and you are looking at an enterprise value of a little under $1.7 billion.

Here is where I become interested.  A $1.7 billion enterprise value on a stock that expects to do $900 million of EBITDA – that is less than 2x EBITDA.

The BMO steelmaker universe is trading at over double that.

There is no reason for Algoma to trade at half of what the rest of the steelmakers trade at.  If anything, they are in a better position than many of their peers – their pensions are dealt with, their debt is manageable, they have cash to expand and they operate in Canada with the lower dollar.

It sounds great so far, but here is where I become really interested. 

Because Algoma is merging with a SPAC, the SPAC shares trade as units – shares plus warrants.  Those warrants also trade separately (LEGOW – NASDAQ).

Legato warrants are typical for a SPAC – they convert at $11.50 and are redeemable for 5-years after the merger is finalized.

A re-rating of Algoma to the average peer is enough to make those warrants very attractive.  The warrants have recently climbed to $1.60, but even at that price, if Algoma stock goes to $20, they are more than a 5-bagger. 

I think that will begin to happen once the merger closes and brokerages begin to pick up coverage. 

Notice that BMO does not have Algoma on their coverage list.  Of course not!  This was a private company until 2-weeks ago.  Brokerages won’t initiate coverage until the merger is a done deal.

But when that happens, I have to think the price targets will be $20+.

At that point, the stock will begin to re-rate.  It’s just simple math.

EDITORS NOTE—Rritual Superfoods (RSF-CSE) is ramping up distribution and sales of its products.  An independent research service—Market Radius—is hosting Rritual CEO David Kerbel next Wednesday, right after market at 115 pm Pacific, 415 pm Eastern.  Get the latest from Kerbel—use this link to access the webinar:

https://us02web.zoom.us/webinar/register/3916236960643/WN_wTyVa0HgRNauDbRJThtLGQ

Me and the Market both hate shipping stocks. You can tell that by the crazy low multiple the sector gets. Why the hate? Because we regularly see news releases of management teams either buying options in their own deals or worse openly buying or selling ships from their own personal net worth back and forth to the public company. And after any good year they just spend that money on buying more ships (increasing supply).

Obviously they are not ALL like that, but certainly enough that in the junior and mid tier management teams, I generally stay away; good markets and bad. BUT…shipping rates are now INSANE. And I expect them to stay quite strong through the rest of 2021.

Putting these two themes together … well, that may explain why my #1 trade in shipping stocks is in a company that owns no ships. And even then I’m doing a covered call, though you have to own the stock for that.

Even if you don’t do calls/puts/options, I think you will find this a very interesting weekend read.

It will also give you an idea of the thinking and research my team puts into our portfolio stock picks (though we rarely do options plays; there is one or two a year). You can try out our service HERE

And here is a snapshot of where my 2021 portfolio sits today:

QUICK FACTS

Trading Symbols:                                     ZIM

Share Price Today:                                   $41

Shares Outstanding:                                110 million

Market Capitalization:                              $4.9 billion

Net Debt:                                                  $915 million

Enterprise Value:                                     $5.8 billion

POSITIVES

– Very levered to containership market

– Containership market is currently on fire – 10+ year highs

– earned $5+ EPS in Q1

– Management dedicated to returning cash to shareholders

– Covered call strategy buffers downside and gives nice 20% return

NEGATIVES

– Asset light model means they own no ships

– Focus is short-term spot deals rather than long-term charters

– Have been chartering-in ships at high rates over last few months

– When cycle turns ZIM will be hit hard

The Investment Thesis

I am taking a covered call position in ZIM International Shipping (ZIM – NYSE). There are two pieces here to understand: 1. the shipping angle and 2. the covered call angle.

Of the two, the covered call matters most.

First, what is a covered call? It means I am buying shares of ZIM and selling calls on my shares. The calls “cover” the upside – think of it as selling the upside in advance.  Why? Because they will pay me for it! Handsomely.

Here are the numbers. I’m buying ZIM shares at $42 and immediately selling the October 15, 2021 calls with a $40 strike for $8.  For every 100 shares of ZIM I buy, I write one call contract (each contract covers 100 shares).

If ZIM is $40 or above on October 15^th, the person who has the ‘option’ to take my shares for $40 will do so. It doesn’t matter if ZIM is still $42 or $100, they get to buy my shares at $40.

If ZIM shares are trading below $40, I keep the shares. And whatever losses I have on them. BUT, I still keep the $8.00 I received when I sold the covered calls. But there is more.

ZIM just announced a special dividend of $2 per share to be paid on September 15^th. Because I own the shares, and I will still hold them in September, I will get that dividend. But I will not have to pay that dividend on the calls I sell. It’s mine. The wife and I will go out for dinner on September 16^th. I’ll make the reservation now, under ‘ZIM.’

My “cash return” – ie. the cash I get from the trade, will be $8 from selling the calls and $2 from the dividend on the shares. $10 all-in. In order for me to lose money on the trade, ZIM shares would have to go down $10 from where I bought them – nearly 24% – to $32. At that point, I lost $10 on the shares I bought, which is perfectly offset by the $8 call option premium I received and the $2 special dividend.

If ZIM shares go up, I keep the $8 call option premium AND the $2 special dividend, but I have to hand over the shares for $2 less than I paid for them (I sold someone the $40 call option, after all). That nets me a return of $8, on a $42 stock – or 19%. 

Taking a step back, it looks pretty attractive to me. If ZIM is flat or up from now until October, I make 19%. If ZIM is between $32 to $40, I make less, but still something. It is only if ZIM drops below $32 – a 24% drop, that I start to lose.

In a nutshell I am betting that ZIM does not collapse between now and October 15^th. I picked October 15 because the shipping sector is usually in full force then—just finishing the back-to-school deliveries and switching into Christmas present transport.

How likely is that? I think it is a good bet. Here is why.

The Containership Market

We have seen a huge move in the containership market. Rates to ship cargo across the ocean have gone through the roof.

The pandemic has backed up ports and with retailers trying to restock post-pandemic.  Consumers are getting out of the house and going on a spending spree.

Everything I read says this is not ending any time soon. Even the bears admit it does not improve until next year.

Below are 1-year Harpex index that measures container rates. They have gone up – a lot!

Source: Harpex

But its more than a short-term blip. Longer-term charters for container ships are extremely strong. The 24-month charters are only 10-15% below the 12 month charters – this is far higher than the 10-year average..

Source: Contex

Here’s something else– retail inventory to sales ratio…retailers have REALLY low inventories—and they are not going up—despite the desperate race to buy anything and everything they can from China right now. GREAT chart here: https://fred.stlouisfed.org/series/RETAILIRSA

Now, charterers are booking 3-year and 4-year charters on a Type 6,500 ship at $45,000/day. While that is lower than the 1-year $56,000 rate, it is not a lot lower. A few years ago they would have been booking $12k-$15k.

Meanwhile the supply side is only beginning to perk up. Up until the last couple of months containerships new build orders were down to 10+ year lows.  

Source: Bloomberg

My take is that while the recent strength in rates may not continue at the extreme that it has, it is very unlikely to come down much.

And that is really the trade here. I do not need ZIM to go to the moon – just to stay at these levels.

Zim Integrated Shipping

ZIM is not your typical containership company.

For one, they do not own any ships.

Wait, what?

ZIM owns no ships. They charter in ships from other owners on long-term charters and then book those ships back out on the spot market for higher rates.

ZIM is like the inverse of a financial company. They are borrowing long and lending short. Taking long-term (1-4 year) contracts on ships, and then contracting them out on short (<12 month) charters.

About half of ZIM’s vessels are chartered out for less than a year.

This is, to say the least, a unique strategy. It was devised by CEO Eli Glickman when he came to the company in 2017.

At the time ZIM was heavily in debt and the containership market was in a deep trough.

Glickman decided that ZIM was going to take a new approach to the business – an asset light model with no ships.

The benefit is flexibility. When Covid hit ZIM pared back its fleet to 50 ships. Now with the market hopping, ZIM operates 110 ships. They will have 120 to 130 in short order.

It is also the perfect strategy for this environment. They are reaping the benefits on ships they chartered in at far lower rates.

No surprise, ZIM’s first quarter results were strong. 

Revenue increased $900 million. EBITDA increased $720 million.  ZIM did a great job of converting incremental revenue into cash. They generated $777 million of operating cash in Q1.

Source: ZIM First Quarter Results

Earnings per share came in at $5.35. This is well ahead of consensus estimates of $4.70.

ZIM is well-positioned geographically. About half their ships are trans-Pacific – meaning they run that Asia to North America route. This route is reaping the benefit of US imports as well as the port congestion on the West Coast.

Would ZIM try to take advantage of the boost in long-term rates? That seems unlikely. CFO Xavier Destriau said on the Q1 call that “we were not so keen on [that]. We are quite pleased to limit contracts to 12 months as we are still optimistic on the U.S. market.”

In fact, ZIM is doing the opposite. They are fixing ships now at what seems to be quite high rates, presumably because they believe the market is only going to get stronger.

While I personally find this a bit scary (one reason to not own the shares), you can only interpret it as a very bullish move. Taking in long-term charters now will be a death blow if rates fall back to levels of the last decade.

ZIM simply does not think that will happen. In fact, Glickman told TradeWinds he believes three-year charters may even be too short.

Glickman has said that the low orderbook and the impact of new environmental legislation are going to impact the business well beyond the post-pandemic restocking. He thinks the squeeze will continue into 2023 and beyond.

Not surprisingly, the bible of the industry, TradeWinds reported that ZIM has fixed several containerships for periods of up to four years.

The Special Dividend—Is ANOTHER ONE Coming?

The other piece of ZIMs strategy, which fits with this trade, is that ZIM plans to pay their winnings back to shareholders.

Beginning in 2022 ZIM will be paying out a 30-50% of net income annual dividend.  That could be as much at $7-$8 per share.

But more important for this trade – they will be paying a $2 special dividend on September 15^th.

I think it’s highly likely that there is ANOTHER special dividend before my covered call expires—the industry is that profitable right now.

Analysts are predicting ZIM will earn $13.48 this year. That puts the shares at a little over 3x earnings.

ZIM raised guidance on the first quarter call. They now expect EBITDA between $2.5 billion and $2.8 billion for the year.

The enterprise value of the stock sits at $5.8 billion. The stock is trading at ~2x EBITDA. Think back to my intro—this sector is always cheap. That’s because the Street doesn’t trust these teams.

Conclusion

You could look at the valuation and say – if it is that cheap, why not just buy the shares? 

I’ll suggest a couple of reasons.

First, I do not trust the containership market. Yes, rates are sky high right now but the shipping market can change on a dime.

I will admit, it is very interesting to see 3- and 4-year charters at the level they are at. The market is saying that this is more than a short-term post-pandemic squeeze.

But I am no true believer – yet.

Second, ZIM is going to get killed on the way down. All containerships will, but ZIM more than most. 

Remember, this is a shipping company without ships. It is a business model that is geared to leverage spot exposure as much as they can.

Shippers are valued on earnings on the way up and net asset value on the way down. ZIM has no assets.

The other side of that coin is that if rates stay high, it will look great for earnings now, but new charters become a problem. I already pointed out that they are chartering in some new ships at high rates. Those could turn into albatrosses in the backside of this.

Finally, there is the share overhang. Through past restructurings, former lenders have been handed shares.

These include Deutsche Bank, with 15.7 million shares and Danaos, with 10.2 million shares.

We just saw Danaos file to unload some of their shares. That won’t be the last time. But… that special dividend just about guarantees there will be no more unloaded until after October.

Put all these concerns together and it is just easier to not swing for the fence. A 19% return over 5-months annualizes to over 40%. That is pretty darn good. I also think there is a strong possibility of a second special dividend before my covered call expires.

With a market that still feels awfully frothy to me, I will take it, along with the lower risk, and leave the big payoff / big downside alternative.

PS—most of my stocks/trades are much more junior than this. But I have followed shipping for a decade, and this is one of the lowest risk/highest reward trades I’ve seen in this sector in a long time.

I’ve got a couple new stocks coming to subscribers in the next week, and re-iterating one very high conviction stock in the DE-CARBONIZATION industry.

Sign up for a risk free trial of InvestingWhisperer right HERE

I’m hearing a lot of bullish chatter on uranium right now—and after listening to all of it in the last 3 days, I’m still not sure about the trade.

I made my first big grubstake on uranium stocks in 2006-2008, so I know a little bit about it. And I’ve known enough to stay as far away from uranium as possible for the last decade. But now what’s old is new again, in a couple ways.

One of the big reasons uranium stocks had a huge run in the mid 2000s was because legendary mining investor Eric Sprott started a fund to purchase physical uranium supply and tighten the market. That was so long ago, I’m not sure how well he succeeded but literally dozens of stocks were 5-10 baggers or better. I paid off my first house with that sector.

Now Sprott’s old firm is taking over a uranium holding company (they own physical yellowcake–U-TSX) and plans to

1. turn it into a fund,
2. list it in the US
3. raise several hundred million dollars
4. and buy up physical uranium again

To me it sounds like the exact same business model that took the industry market cap from millions to billions.

In the intervening 13 years, uranium bulls have had to muddle through a few issues. One is that the green movement can’t decide if uranium is good or bad. The second was the Fukushima incident in 2011 in Japan where a tsunami overwhelmed a nuclear power plant, causing the cores to melt and turn public opinion against nuclear for a decade.

From what I read, uranium demand is slowly increasing. But still, prices have been so low that the world’s #1 producer, Cameco, has had not one but three of its largest mines offline for years at a time as they were unprofitable. That hardly sounds like a bull market, does it? 

To me it’s a lot like oil—where a concentrated group of large suppliers have HUGE excess capacity, but show enough restraint to convince the Market of their madness. One big difference between the two commodities is—the oil price and oil production was moving up immediately prior to COVID, indicating a robust market. That was definitely not happening in uranium.

I don’t think we are in any danger of being short oil in the coming years, and I think that’s the same for uranium. There’s LOTS of the stuff around. It’s a bit of a manufactured scarcity—but the Market may be willing to pay for that.

Uranium bulls point to two of Cameco’s Saskatchewan assets being depleted by 2026—just in time for the largest uranium deposit the world has ever seen—the Arrow deposit by NexGen (NXE-TSX/NYSE) come online—also in Saskatchewan.. 

Saskatchewan’s Athabasca Basin is a freak of geological nature like the South African platinum, or even South African gold—it’s so high grade most geologists—and the public—have a hard time wrapping their heads around it.

Even saying that, the Arrow deposit is a freak of nature. When it gets into production it will account for over 20% of global production. There is no other mine in any other commodity in the world that comes close to that. High grade, huge—by definition it will be a low cost producer.

So fundamentally, I’m not convinced uranium deserves a much higher price. Can the producers bully their small customer base (the large utility companies) into paying a higher price through manufactured scarcity? Maybe, but I would not be betting my last dollar on it. I see in the U-TSX powerpoint that they are expecting a big increase in Asian utility buying starting in 2025—new demand that will hopefully increase prices. Hey, I hope it’s true—I really do want everybody to make money.

And speaking of prices, the published spot price is only a small volume mechanism, compared to the huge contracts signed between producers and customers. So while it is valid, it’s not COMEX either. (To be fair, the spot market has been increasing its market share the last few years.)

Also–a decade ago wind and solar became the big alternative power sources, and now it’s lithium and hydrogen eating uranium—and uranium investors’—lunch. Is that going to change? Are politicians going to score ESG points by touting uranium? Are ESG funds going to score ESG points—by buying uranium instead of the latest EV or solar technology SPAC? Not sure about that.

But if the bulls are right, these stocks have a long way to go in this liquidity fueled stock market. Most of the stocks I bought 6-8 months ago are up 3-8x. Cameco (CCO-TSX/CCJ-NYSE) is not even a double yet. Nexgen (NXE-NYSE/TSX) is a little over a double. Denison (DML-TSX/DNN-NYSE) is a triple. All these stocks are inter-listed in the US, giving them great liquidity.

So it’s deja-vu all over again. In the mid-2000s, uranium prices had been low for a long time. Then came a new business model to spur prices higher. Now that man’s namesake company (Eric is no longer part of Sprott) is doing the same thing again 13 years later, in the exact same market conditions. Maybe lightning strikes twice—well it already is as these stocks are running now and the premium to NAV for U-TSX is at the upper end of its range.

Uranium won’t be A Big Trade for me. But I do own a small amount of U-TSX for physical exposure, and some URA-NYSE—the ETF that owns the stocks of all the uranium producers and developers (like Nexgen). 

I’m not sold on this trade. But I am long. Here’s a list of the Top 10 Holdings for the URA-NYSE ETF.

The EV battery of the future may have just got a lot cheaper, charge faster and be more environmentally friendly, thanks to Nano One Materials Corp. (NNO-TSXv/NNOMF-OTC).

The company just announced it has passed a crucial set of battery testing milestones with a “multi-billion-dollar Asian cathode material producer” with their High Voltage Spinel (HVS), also known as LNMO-Lithium Nickel Manganese Oxide technology.

What this means is that Nano One and the big Asian company tested NNO’s unique cathode chemistry—which uses no cobalt and very little nickel—and it passed a huge array of tests.

These would be tests like (and I know this from previous chats with the team over the last two years):

1. How fast did it charge up and how fast did it spend its power
2. All that charging at different temperatures—from very cold to very hot
3. What was the power density

“When you’re testing the materials, you’re looking for does it have the capacity?” Dan Blondal said in an interview this morning. “Can you cycle it? So each cycle being one tank of gas. 

“And is it economically viable? So the materials that are going in and the process being used to work on it, is it going to be economically viable? And then ultimately, how quickly can you charge it and discharge it? And this material in particular is very fast charging.

Blondal wouldn’t say exactly what their milestones or achievements were, but they were positive enough to move into commercialization discussions with their un-named partner (first announced last August).

The Market could see that their IP with the higher voltage—which makes the battery much more efficient—has a good chance to be globally adopted.

NNO already has a named deal with Volkswagen, and openly says they are working with MANY global automakers, their OEMs and power tool companies, among others. By the way, VW said in its Power Day presentation a few weeks ago that the LNMO chemistry–there’s actually three chemistries that are being used–(LFP (cheap safe/low range) and NMC (luxury long range/expensive) are the other ones) was front and center for them. 

NNO uses a solid state LNMO technology; there’s no liquid electrolyte and that was the big problem with it in the past. NNO is the first company to make LNMO work in a conventional battery.

“This batter technology certainly charges faster and punches a lot of power,” says Blondal. “And it’s cheaper. Literally the key things are is that it’s got the higher voltage and better power, it charges faster, and it’s basically got no cobalt and not much nickel in it. So it’s a relatively inexpensive battery.

“So you’re dollars per kilowatt hour drops.”

Blondal knows there is still a lot of work to do—in fact he almost goes out of his way to make sure people understand that this is a big step, but there’s more work to do. It’s not a commercial technology yet. No battery yet uses this.

But they are the world leader at this point. They have a proprietary method of making the next EV battery cheaper, fast charger and be more environmentally friendly—by not using as much nickel and cobalt.

Blondal explained the feature/benefit set in simple terms:

“It’s also got a three-dimensional structure, a crystal structure which allows lithium to go in and out really fast. So that’s what allows it to quickly charge and discharge. But that three-dimensional structure also keeps it from expanding and contracting, so it doesn’t strain the inside of the battery as much.

“And then lastly, because it’s high voltage, it’s about 25% higher voltage than other cathode materials, so that actually has some interesting application, let’s say, in something like a power tool or even electric vehicles.

“You don’t have to string as many of them together to get the voltage. So you kind of simplify the battery pack.

“And because it’s higher voltage, you generate less heat. So thermal management gets easier.

“It’s more powerful and more efficient and ultimately more productive of a battery. So those are all the kind of the reigning characteristics of the material. That’s the whole package.”

Blondal said that this new stage of development would not increase Nano One’s burn rate–for now. But one of the reasons they wanted $30 million + in their treasury was for both negotiating power with partners, and for the potential to be an active partner, not just a royalty play on their technology.

I’ve always thought NNO has the potential to be a “unicorn” stock—and get a market leader’s valuation. While the overall market for that kind of stock performance may have passed (how many middle finger charts do we see out there?), the underlying technology here could get Nano One noticed by a much larger and more validating group of investors.

The Next Big Investor Meme of 2021
DE-CENTRALIZATION