Dear Subscriber

OK friends...it is now time to get very real on the NKLA valuation and what our options are at this point. 

#1 The REAL valuation of NKLA is just under $30 BILLION as of this moment. 

That valuation is about 10 times its forecast $3.2 billion in revenues in 2023.

How did I get to that figure? A) the pro forma figures from their SEC filing shows the diluted share count of 361 million. Next, we have to add in 24 million warrants with an exercise price of $11.50, and then the 41.1 million employee stock options with an average pre-merger strike price near $2.

Add it up, and there will soon be 426 million NKLA shares outstanding, aka as a REAL market capitalization value around $30 billion. Cash on the balance sheet totals about $1.2 billion, including the proceeds from options and warrants.

Net out that cash and the operating NKLA business is valued right at $30ish billion.

But in reality, NKLA is now a cult stock. And a cult stock is worth what the cult members will pay for it. That is UNTIL the insider stock holdings are done with 6-month lock-up period.

Key Point: IF you paid just $2 or $10 for your NKLA shares, what would YOU DO with most of them when the lock-up period allowed you to sell?

SELL and or lock-up your profit with a "collar" transaction that puts a floor under your shares and you keep most of any upside from there. In fact, I have been that insider person a few times--and I can tell you what I did--I sold enough to get 10X my money back, converted the warrants, and then (this was 1998-1999 dot com craze) used the 50-day moving average to let me know when to sell the rest.  

Here's the certificate to prove my point: Xoom stock went from $10 IPO to $100 during the dot com melt-up phase. I was VERY happy to hold some of my shares that I had paid $4 for and converted warrants and sell into that final melt-up phase!

BUT--I had already sold enough to get 10X my money back BEFORE I let the rest ride! 

Trust me there is NO GREATER feeling in the world to check your bank account at the ATM and see seven figures.  If I had an app, I would have worn out that screen!

As I said, I am not a cult stock analyst. Yes the promise of Tesla the cult stock came true and it now has a market capitalization of $186 billion. Net debt is a few million, putting its enterprise value around $180 billion.

If Nikola could — again, roughly speaking — become another Tesla as I have forecast and achieve the NKLA dream, Nikola stock would rise about sixfold. That is the dream scenario.

But today in the here and now, ANY way you slice this, $NKLA is now worth more than Ford or GM or Fiat Chrysler today

Action to Take: AGAIN I am NOT your portfolio manager, but if you took our advice, you now have 2X your original investment back in profits/cash, you own your warrants for $0 and your shares are free and clear and you are "playing with house money." 

But don't kid yourself: that "house money is YOUR REAL MONEY. 


Action to Take: For my accounts, we put a 10% moving sell stop under the open price yesterday and took our NKLA profits at $85 and lowered our cost on warrants to ZERO. Those warrants are over-weighted in our growth portfolios to 15% of the total portfolio. 

Like I said yesterday: "My best guess? Lightning rarely strikes twice. We got one parabolic rise today. ODDs are high that AFTER the surge in the morning, the FOMO market orders dry up and we got back to the open price and then THEY freak and we go back to $72 close today."

It did. Today we saw another bounce up to $75 (the Robinhood day traders of course) now the line of truth for NKLA is $65.80 the low of the day. THERE is a HUGE battle being fought here today between the $56 low of yesterday at the $72 close. 

Here are the lines of truth right now.



Key point: The SLOW stochastic on this chart has crossed over from said yesterday to break the WAY overbought 80 lines.  What is a stochastic? Let anything else today, GO TO THE GOOGLE and ask the question, then GOT TO THE YOUTUBE for a detailed answer! Here ya go:
 

https://www.youtube.com/watch?v=2x9cQHJUKG4

Monday I said "The MORE UP NKLA goes UP, the gravity will bring it faster down when it breaks. 

It is NOT a question of IF the stock breaks, it is a question of WHEN it breaks, OK?"

These moves are like being in the Twilight Zone TV episode--except they are very very real.

What Have I Done With MY PERSONAL/Managed Account Shares?

As I said, we have taken all the profits in our NKLA SHARES at $85 and sold enough warrants to have zero cost. We will execute $30,000 of NKLA shares at $11.50 cost basis and HOLD those babies fah evah to live the dream!  IF NKLA value fell below its 50-day moving average (which will take eh 50 days ok?), we would be buyers again. 

For the Transformity Research track record, we are marking the position to reflect the sale of the VTIQ and VTIQU shares at the blended NKLA rate of $85 and holding our warrants at our $6 acquisition price and will convert and hold our shares at $11.50.

How do I exercise my warrants?

TALK TO YOUR BROKER.

Warrants may be exercised during the exercise period. The exercise period begins 30 days after the merger has closed, and will expire at 5:00 p.m., New York City time, five years after the completion of the business combination. 

Warrants may be exercised through your broker, or by contacting the warrant agent:
Continental Stock Transfer and Trust Company
One State Plaza 30th Floor
New York, New York 10004

Final Note: This has been life-changing wealth creation for many of our subscribers. The early folks have done better than the new. BUT if you made life-changing wealth, your job is now to KEEP THAT wealth.

My one piece of advice to any new $millionaire is "Dude quit investing like you did when you had $10,000 in your IRA!!!  You are now rich--your job is to STAY FREAKING RICH."

Am I clear?

NOTE: Again IF you want to trade options around NKLA to lower your cost basis, join the now 125 members of our All Access group. WHEN the bubble finally pops, we will be SELLING CALL OPTIONS and buying PUT OPTIONS on the final pop and keep that premium and profit as a reward for enduring the brain damage of following NKLA 20%-50%-70% moves up and down. Here is the secret decoder ring:

https://transformityresearch.com/register  1) Click on the link 2) scroll down to the page to the All-Access membership 3) click on the All Access "SELECT" button 4) Fill out registration info 5) SCROLL down to choose payment (ignore "Coupon Code")  insert credit card data 6) click payment button "Register Account"   

What a journey! 

Toby (Mr. NKLA from now on)

PS: We will create a trade to lock-in/collar NKLA's $68ish value out six months soon because when the insider lock-up period is over, there will be an AVALANCH of NKLA selling--and hope to buy that dip!