I fell asleep writing yesterday’s column.  When my head went thunk on the keyboard, it must have hit PUBLISH . . .  so I never really got to the point.

Here’s where we left off:

The latest Borealis weekly investor email links to the huge Borealis prospectus issued in connection with the stock’s listing on the Prague Exchange (to date, no shares have traded) and notes that grand-sub WheelTug (sub of Chorus Motors, sub of Borealis) is upping the price of shares it is selling privately —  from the most recent offering price of $90 to a hoped-for $180.  The 2013 Borealis annual report shows “profit from sales in  subsidiary companies” at nearly $8.5 million.

The point is that Borealis owns 65% of WheelTug.  And WheelTug — at $90 a share with a little over 7 million shares outstanding — is being valued at more than $600 million.

Thus one might conclude that Borealis’s 65% stake in WheelTug is currently worth more than $400 million (65% of more than $600 million).  And one might divide that $400 million by Borealis’s 5 million shares outstanding to come up with $80 worth of WheelTug for each Borealis share.  Which is one reason buying Borealis shares for $11 as you could yesterday — or even for $15 or $20 or perhaps $30 or $40 — strikes me as a sensible speculation.  Not least because Borealis may have value beyond WheelTug.  As has been noted before, if its patented electric motor technology can move a jumbo jet, perhaps it may have some application in automobiles, forklifts, elevators, golf carts, or who knows what?  And if this scoffed-at Borealis technology proves valuable at long last as now seems at least a bit less fanciful, perhaps one or more of its other scoffed-at technologies and subsidiaries (like Cool Chips and Power Chips) has value.  (Even, someday, its claimed mineral wealth.)

Of course, there’s no guarantee WheelTug is worth the $600 million valuation that some investors have accepted, let alone the new $1.2 billion offering price for new shares ($180 a share).  But it’s still encouraging that some people must think so.  Indeed, they must think it’s worth more than $600 million, or else why tie up $8.5 million in illiquid, non-public shares?

I keep annoying you with this because (a) those of you who have joined me as long-suffering shareholders over the past 14 years need encouragement (keep hope alive! keep hope alive!); and because (b) those of you who have not yet jumped in might still wish to — though only with money you can truly afford to lose.

(If you do decide to jump in, be sure to use limit orders.  The stock is very thinly traded.  A “market” order basically says, “I’ll pay anything you want to charge me.”  A “limit” order says, “I’ll pay anything up to a limit of $11 a share.”  Or $12.  Or whatever price you set.)

There remains the real chance we will lose all our money . . . though I become increasingly hard-pressed to see quite how Borealis shares would come to have zero value.  At the current $55 million valuation, it is considered only one-fifth as valuable as Cezanne’s “The Cardplayers.”  A lovely painting; but can “The Cardplayers” make the global airline industry significantly more efficient, as just one of the Borealis subsidiaries shows promise of being able to do?

As always: naysayer comments welcome.  If I’m missing something here, I’d be eager to know what it is.




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