Investor That Can See The Future

Chapter 445

I decided to meet a person at work.

His name is Allen Everhart. That’s Nikola’s CEO.

The history of Nikola is no less than the history of electric vehicles. At a time when automakers were passive about electric vehicles, Nikola made and introduced the highly efficient electric vehicle Model P to the market, which drew the interest of investors.

Nikola, who succeeded in targeting the rich market with high-tech products, opened up the electric vehicle market in earnest by expanding the plant based on the funds earned and releasing the $30,000 model TM.

At this point, Carlos emerged as a competitor. Up until this point, investors and experts predicted that it would be difficult for Karos to defeat Nikola.

However, with the development of OTK batteries, the situation changed. The OTK battery significantly improved the capacity and charging speed of the existing NCM battery, and completely changed the paradigm of electric vehicles.

GM and Ford joined the Karos camp, but Nikola still insisted on survival.

This is because the main car models are already tuned to the existing batteries, and they were procuring their own batteries through Giga Plant, a joint venture with Technics.

Moreover, Giga Plant hedged against cobalt to ensure a stable supply of raw materials. It is a contract to buy a certain amount of cobalt at a certain amount for the next five years regardless of the price fluctuations.

However, since the release of OTK batteries, the price of cobalt has plummeted by more than 70 percent.

Thanks to this, other battery makers were able to secure price competitiveness, but Giga Plant had to bear the loss. A 100 won bill has turned into 30 won, is it a situation where you have to keep buying it for 100 won?

When Karos released AD3 and AD4 equipped with OTK battery, Nikola’s sales plummeted and stock price went downhill.

Taek-gyu, who was listening to me, looked at me and said.

“In the end, 90% is your responsibility.”

I shook my head.

“no. The last big one hit me.”

In fact, the time when Big One came was the time when Nikola was increasing the production of Model TM, which can be called a cash cow.

Due to Big One, the Model TM plant in California was shut down due to damage to the production line, and the Giga plant in neighboring Nevada was also partially damaged.

IT companies can resume work as long as servers and manpower are intact, but manufacturing has no answer when factories stop.

In the end, Nikola and Giga Plant went bankrupt. Currently, Nikola is in a workout and trading is suspended on the Nasdaq.

According to media reports, it is known that Allen Eberhart and I have a bad relationship. To be precise, I was still, and he fought hard by himself.

When Karos released an electric car, he mocked that it would go bankrupt within three years and become a lump of scrap metal, and when OTK batteries were first released, they criticized that an explosion would occur soon. And to me, who said that I had to prepare for Big One, he poured double insults like a bastard and a madman.

But the day will come when we will meet in person like this.

Taek-gyu crossed his arms and said.

“Hmm, it’s like meeting a malicious commenter who has been persistently posting malicious comments in person.”

I hear it and it seems that way.

“It looks really gentle, though.”

“Originally, malicious commenters are all fine when they see their faces. If you know that Hayoung is always malicious in webtoons, he must be a sincere office worker.”

“How do you know that? Have you met him?”

“No what… … .”

“Are you a malicious commenter?”

Taek-gyu groaned.

“What are you talking about? Who else cleans the internet space like me?”

“… … .”

It’s even more suspicious to see him strongly denying.

* * *

I shook hands with a white man who came to my office.

“You have worked hard to come a long way. This is Jinhoo Kang.”

“nice to meet you. This is Allen Everhart.”

“Good morning. This is Taek-gyu Oh.”

He is tall and has cool and cool features.

Although he looks like an American, he was actually born in South Africa, after which he studied in the United States and started a business, obtaining American citizenship.

The strength of America is that he can be accepted as an American if he has the ability to come from any country. Microsoft’s CEO, Satya Shyamalan, was also originally an Indian or American citizen.

He is now only in his mid to late 40s. It’s hard to believe that you’ve grown such a company at such a young age.

He predicted the coming of the electric car era and founded Nikola and Solar Land as he thought solar power was suitable as a way to charge electric vehicles. Then he realized the potential of space exploration, and he founded the private space company Space Z.

In addition to this, he has a history of starting and selling several companies.

It would have been difficult for an ordinary person to do even one. If you look at this, you can see that there are geniuses in the world.

Contrary to the harsh words he said in the media interview, when I met him in person, he was gentle.

“What did you come here for?”

Low in his seat, he said calmly.

“I wondered who had ruined Nikola. Suddenly, I wanted to see your face.”

Seeing you say this makes me feel like a geek.

What would have happened if I didn’t invest, so there was no Karos and no OTK batteries?

So Nikola was still doing well, right?

Nikola’s once over GM; The market cap shrank to $5 billion after the workout. That’s a drop of more than 90% from its peak.

Automobile companies have a large number of employees and have a huge impact on the overall economy when they go bankrupt. Therefore, it is necessary to save it rather than let it perish as much as possible.

We cannot ignore Nicola’s brand value and accumulated know-how. In addition to electric vehicles, there are also charging systems called hyperchargers that are installed all over the world.

If you can get it for just (?) $5 billion, it looks pretty good, but there’s one problem.

That’s over $10 billion in debt.

It was thanks to the issuance of bonds and new stocks that Nikola was able to continue investing despite making huge losses every year. In the meantime, corporate bonds have been issued at interest rates of 5 to 7 percent, which is more than double that of U.S. Treasuries.

The reason the interest rate is so high is because the issuance volume is so high and Nikola’s financial situation was not very good. Although there is some risk, the growth has continued, so it has been in the spotlight among bond investors who like high returns.

Had I known it was going to be this bad, no one would have bought it.

There are 2 billion dollars of bonds that have already expired and have not been repaid, and even now, bonds that have expired are coming back at a rate of 200 million dollars every month.

Acquisitions also include debt. Acquiring Nikola means that Nikola has to assume responsibility for repayment of bonds issued by Nikola.

A company with a lot of debt can be taken over by mistake. For this reason, GM and Ford have no choice but to express their displeasure.

But in this situation, one company raised its hand.

“Did you say that you would like to take over from Zhoucha?”

He nodded.

“I know that I do not have enough money to pay compensation for various mergers and acquisitions and Karos, but I do not know where the money is going to take over.”

Taehyung just nodded his head.

“If anyone sees it, they will misunderstand that the Chinese government is providing the funds.”

What… … If you ask me, I would say no.

Naturally, concerns arose about technology leaks, and the U.S. Department of Commerce did not allow the merger or acquisition. Zhou Cha must have been bored, knowing it wouldn’t work.

As a result, creditors vehemently protested.

From the creditor’s point of view, if a company goes bankrupt, it doesn’t matter if there is a technology leak or not, in the event that you can’t get a single penny out of it.

Eventually, the ball went to Carlos. The US government secretly hinted that it would be good for Carlos to take over. Since Karos is doing the best in the automobile market, it seems that he is taking responsibility.

Daryl Sagan considered the matter carefully.

From Carlos’s point of view, Nikola is not necessarily needed. But we can’t let it go to Chinese companies. The government should also look into it.

The acquisition cost is a problem, but fortunately (?) bond prices have plummeted.

In the bond market, ratings below BB+ are usually treated as junk bonds, but Nikola bonds have also been downgraded to CC rating, which is the bottom here.

The reason why it did not go down to D grade even though it is already in default is because there is a glimmer of hope that it can be repaid if it is taken over. However, it is already being traded at 40% of the issue price rather than interest.

If you negotiate with creditors and readjust bond prices and interest rates, you can significantly lower costs.

Well, these issues are up to you to deal with.

“What will you do after selling Nikola?”

Allen Eberhart said confidently.

“I’m going to focus on Space Z. Space is a huge market that cannot be compared to automobiles.”

Taek-gyu showed curiosity.

“Five! Space exploration?”

The company he had worked hard to grow went bankrupt and was sold. If he was a normal person, he would have been frustrated, but he had a rather relaxed expression on his face.

After all, only successful cases are well-known, but in fact, there are not one or two businesses where he has failed. Perhaps the reason he is a genius is because he continues to challenge after overcoming such failures.

Would it be possible for me to do that?

Thinking like that, Taek-gyu muttered with a serious expression for nothing.

“Is it possible that a full-fledged universe century will open?

“… … .”

no. Even with space development, the space century will not open.

When you think of space, of course, the first thing that comes to mind is NASA. As an institution under the direct control of the president, it can be said that it is a leader in space development.

However, space development costs a lot of money, but it is not a business that makes immediate profits. I don’t know if it was when they were fighting an arms race and pride battle with the Soviet Union during the Cold War, but now the government is like a hippo eating money.

In fact, since the 1980s, NASA’s budget has been shrinking year by year, and a lot of talented people have left.

Due to a lack of budget, they started a forced diet, and NASA decided to focus on its original tasks of research and exploration, and transferred other tasks such as space cargo transportation and satellite launch to private companies.

Here’s Allen Everhart.

He founded Space Z, a private space company, and received a technology transfer from NASA, winning projects such as ISS (International Space Station) cargo transportation.

Unlike state institutions that are operated by government tax, private companies that are operated by receiving investment prioritize profitability.

Allen Eberhart came up with a groundbreaking idea to cut costs.

When the spacecraft leaves the atmosphere, the first stage rocket is separated and the second stage rocket is ignited. At this time, the separated first stage rocket falls to the ground and shatters.

If this first stage rocket can be recovered and reused, 80 percent of the launch cost can be saved. In other words, the cost can be reduced to one-fifth of the existing one!

It seems like a great idea, but it’s not that other people didn’t think of it.

Anyone can have an original idea. It’s just difficult to make it a reality. Could it not have been made because other people couldn’t even think of a smartphone or an electric car?

This plan was also easy to say, but it took a lot of trial and error to succeed, and there were many skeptics.

However, Space Z succeeded in recovering it by re-propelling the first stage rocket separated from the atmosphere and landing it on the ground after Yeora’s turn.

It was like opening a new chapter in space exploration.

If the cost is low, the number of launches will increase, and if the number of launches increases, the price will become cheaper due to economies of scale.

Perhaps thanks to the development of these technologies, the United States, Russia, and China are again focusing on space technology development.(Read more @ wuxiax.com)

If a full-fledged space age opens in the future, what will happen to Space Z?

“I heard you are getting married.”

“Yes.”

“It’s better not to get married. Living alone is the best.”

“… … .”

You say very nice things in front of people who are getting married. By the way, he has been divorced twice. Why are there so many divorces?

“Anyway, congratulations. I will give you a wedding present.”

He handed out two tickets with the Space Z logo on them.

“What?”

“This is a space travel ticket.”

Taehyung asked in surprise.

“Wow! Were you really doing this?”

“of course. We will do it from next year.”

Even if it’s a space trip, it doesn’t go very far, and it goes up to low Earth orbit in a capsule and then comes back to Earth soon.

Tickets are actually on sale, and despite the $300,000, it is known that reservations are already full. It is said that the world’s richest and famous Hollywood actors applied.

You can have this kind of experience, is money a problem? I can’t believe this time has come.

When the media raised stability issues, he himself went to space in a capsule.

“How was it? Did it really look like a pale blue dot?”

he laughed bitterly.

“In the words of Professor Carl Sagan.”

In 1990, the Voyager 1 spacecraft sent a photo to NASA. It had a single faint blue dot on the screen, all black. That was Earth.

“If you look closely, it doesn’t look like that. You’d better see it yourself than tell me. Tickets are available, but reservations must be made in advance.”

One piece of this is $300,000, and two pieces is a whopping $600,000. It’s a huge amount to give for free, but if I ride it, it’ll be good publicity.

It really looks like we are going on our honeymoon to space.

Taek-gyu asked, his eyes bright.

“Do you have anything for me?”

Then Everheart said bluntly.

“Buy one. You have a lot of money.”