The Small and Micro Cap Pure Play EV Players Need to Be Rerated HIGHER!๐๐๐
Hey Subscriber,
OK so while we are in the final stages of buffing out our 2021-2022 post-covid stocks strategy this week, weird stuff happened. #1 The top 3 new plays we wanted to add this week to our small-cap niche EV buy list exploded in value.
Maybe it was the record EV sales numbers of out China reported by Nio and XPEV this week--the world's biggest car market. Maybe it was Germany and then the UK bringing out "draconian" anti-IC (internal combustion) laws banishing new IC vehicle sales by 2030--which is even more draconian than California and the EU in 2035 and China by 2040.
CNHI-After selling NKLA and FSR, our sole EV play now up 87% from June, we need a LOT MORE EV exposure
Action to Take: Raise Buy Under to $11--$26 target by 2022 as they start to roll out NKLA EV trucks to Europe
๏ปฟ
This week, our favorite EV plays NIO, KNDI and SOLO exploded in ballistic melt-ups in about 4 trading days (always remember day-to-day stock prices are controlled by the marginal buyer--the buyer willing to pay the full asking price for a stock). When what we still consider to be WAY overvalued Fisker at @$4 billion caught a bid, we moved down the EV food chain to try to find some names we like that do not have WAY overextended charts like my new fave specialty EV Kandi (KNDI) and SOLO:
Notice KNDI's last ballistic melt-up to $17.50 and how financial gravity pulled it back (we will get to KNDI another day--but AFTER the short-selling melt-up comes back to earth):
or 3 wheel EV SOLO in a 45% melt-up today (remember--at TI PRO we are trying to MAKE MONEY buying and selling stocks over 12-36 month waves of growth--not day trading): Both charts a WAY overbought and look very similar to the meltup we caught on NKLA and TTCF:
NOTE: SOLO has more than 64,000 preorders for the SOLO EV in a total of $2 billion so they are most definitely a player we want to bet on .
But look at our OTHER favorite niche players in the EV spaces today:
69.49%
AYRO
6.18
45.76%
SOLO
9.64
39.51%
KNDI
14.41
27.07%
SBE
24.70
25.51%
BLNK
18.34
24.09%
NETE
9.67
21.03%
FLUX
9.78
19.71%
CBAT
7.59
14.74%
XPEV
48.11
8.95%
NIO
48.45
This brings us to the MOST undervalued EV player on the board-- Net Elements (NETE) which is in the process of reverse merging with Mellon Technologies in Southern California. Mellon has a very rad SUV and a SUPER RAD EV Supercar going into production with distribution all over the world. NETE is a small fry payment system in numerous niches and this is a reverse merger, not a SPAC.
Without getting too crazy into the LOI, Net Element needs to bring $10M cash into the share-for-share merger and Mullins needs to deliver $100 million in sales by a specified date to keep its share of the merger shares (see below).
The Mullins supercar is the sexiest beast I have seen in the EV supercar apace and has a number of key patents around its air-lithium battery and drive train systems. Click here and give this baby a look!
Mullen Technologies Is Now Accepting Deposits For The MX-05 All-Electric SUV
BREA, CAโOctober 1, 2020โMullen Technologies Inc. (โMullen Technologiesโ or the โCompanyโ), a Southern California based licensed electric vehicle manufacturer with international distribution that operates in various verticals of businesses focusing on the automotive industry; Mullen Automotive, Mullen Energy, Mullen Auto Sales, Mullen Funding Corp., and Carhub, today announces the Company has begun to accept deposits on the MX-05 All-Electric SUV.
Mullen announced earlier this month that the development of their pre-production facility in Monrovia, CA will begin today, October 1. This facility will be fully operational in mid-2021 and begin the pre-production process of the MX-05 in the 3rd quarter 2021. First deliveries to the public should be in the 2nd quarter 2022.
The five-passenger MX-05 All-Electric SUV boasts a 325-mile range with a 0 to 60 mph time of 3.2 seconds. Mullen will unveil the prototype and model in the coming weeks. Mullen will accept up to 100,000 refundable deposits of only $100 each for the MX-05. In order to reserve the MX-05, simply make the deposit and review the terms and conditions at https://mullenusa.com/mullen-mx-05/
Mullen has announced the pending merger with Net Element (NASDAQ:NETE), which is in itsโ final stages of due diligence and compliance. The pending merger is on schedule and both parties are working diligently to move forward as planned. NETE will spin-off its payment platform to meet the $10M cash requirement for closing.
KEY POINT: Mullens is ALL about reducing the cost of EV batteries with its patented Air Battery.
EV battery prices becoming increasingly economical, dropping 87% in less than a decade with an additional 30% drop predicted by 2023
Battery-focused subsidiary Mullen Energy part of US expansion, thousands of jobs expected to be created
Pre-orders for MX-05 SUV commenced, production expected to start in 2021
Here are the terms of the NETE/Mullen merger. The KEY POINT? The $284 million valuation for Mullen vs. $4 BILLION for Fisker who is roughly on the same trajectory as Mullen for Q2 deliveries with only ONE vehicle.
The deal is a triangular reverse merger with Mullen Technologies.
The survivor company will be named Mullen Technologies, the ticker will be changed, and the payment processing business is to be sold.
This transaction would allow Mullen to be public this year and then raise capital in a secondary transaction to support its plans.
Mullen Technologies plans is to sell Qiantu Motorsโ electric vehicles with their battery technology. Qiantu is a Chinese manufacturer that is a subsidiary of HUGE CH Auto based in Beijing. It already sells EVs in China. Mullen has an agreement to sell those vehicles in the US and plans to assemble them here. It will raise additional capital to pay for their assembly plant with a secondary offering/PIPE or combination.
Funding acquired via the deal will support Mullen's plans to manufacture and sell EVs in the United States, starting with a compact SUV dubbed the MX-05 and the sports car Dragonfly K50 (shown above). The sports car was first shown in 2016 as the Qiantu K50 by Chinese design company CH-Auto Technology, and it's already on sale in China.
The Dragonfly K50 features aluminum and carbon-fiber construction, a dual-motor system rated at up to 375 horsepower, and a promised range of over 200 miles. It's priced from $124,999.
The MX-05 is a small SUV is priced from $55,000--but I bet that price comes down to the $45k range. For the first 200,000 vehicles, Mullen vehicles will qualify for Federal $7500 tax credit (which we expect to be expanded to 500,000 vehicles by the Biden Administration). ALL 50 states offer $1500-$2500 tax credits as well.
No specs for the SUV have been revealed.
Figure 1. Dragonfly K50 at the NY International Auto Show 2019
Source: Shutterstock
The management of the remaining company will be from Mullen but Oleg Firer, CEO of Net Element, would remain on the board.
Mullen Technologies was founded in 2014 and is based in Brea, California by entrepreneur David Michery. It currently sources cars from its Chinese OEM partner Qiantu Motor. Mullen currently has eight car dealerships in California and another in Arizona where it sells a variety of cars and showrooms its K50. It also owns CarHub, a platform that leverages AI for a solution for buying, selling, and owning a car. Early in 2020, the company launched Mullen Funding Corp. to provide direct auto financing and lease options for new and pre-owned Mullen vehicles.
Mullen Technologies owns valuable lithium battery patents to create batteries rivaling Teslaโs technology. It has a joint venture with Ukrainian company NextMetals Ltd. to create a solid-state battery under a new division called โMullen Next.โ
Net Element shareholders are expected to own 15% of the surviving company. If Mullen can reach revenues of $100 million in the next 24 months, it is entitled to another 5% of the shares leaving Net Element shareholders with 10%.
If revenue is less than $80 million, then the Net Element shareholders will get another 5% leaving Mullen shareholders with 80% of the fully diluted common shares of the company.
At Net Elementโs current enterprise value of $39 million (using a $9.20 stock price) this puts the entire valuation of Mullen Technologies at $248 million or more than 90% LESS than its competitor Fisker.
In short--The SUPER ATTRACTIVE investment here is a massively undervalued company in the publicly traded world. And in reality, the ONLY THING that really matters and differentiates EVs from a price and performance aspect is batter life and recharging life. Mullen, unlike car design guru Mr. Fisker, has the price and performance advantage in 1) their battery patents 2) their production deal with a major Chinese EV design and manufacturing shop, and 3) lower assembly cost over outsource assembled Fisker EVs.
Fisker has a more valuable brand for sure--but 12X MORE valuable?
NO WAY.
Action to Take: Let's be patient for NIO, SOLO, and KNDI and let come back to earth--like all stocks that go ballistic they will return to earth. NO CHASING!!
Action to Take: This GUY is JUST BREAKING OUT--BUY NETE Up to $12 with a $48 target by mid-2022
