E-GREGIOUS II

Not sure whether you found time over the weekend to watch that Jon Stewart clip, but I feel the need to expound a little further.  It’s the clip that shows Republicans blasting Obama for doing something no other modern president has ever done — except it turns out they ALL have.  The Republicans are just lying about this.

It’s the clip that shows Republicans blasting Obama for failing to pass the Dream Act when Democrats controlled Congress — not mentioning the reason he failed to pass it, despite its garnering ample majorities in both the House and Senate: 41 Republican Senators killed it with one of their hundreds of filibusters.  So the Republicans are lying about this, too.

It’s the clip that shows Fox News blasting Obama for saying that he has to enforce the immigration laws and then not enforcing them — except wait til you see how they edited that tape.  It’s egregious.

Republicans do it as standard operating procedure, beginning with Governor Romney’s very first TV ad: the one that shows Obama quoting the McCain campaign without revealing he was quoting them — making it look as though he was saying this stuff.

At what point does this become an issue of character?  At what point can today’s Republican Party be branded as dishonest?  As bullying?  As rooting for  — and even as orchestrating — the country’s failure so they can regain power and further lower taxes on the wealthy?  (Remember how they cheered when we didn’t get the Olympics? Remember their manufactured debt-ceiling crisis? Remember their refusal to pass the American Jobs Act that would have taken more than 1 million Americans off unemployment?)

What does it say of the Republican strategy that it relies on making it hard for people to vote and misinforming those who do?

BOREF MATH

So my first obsession, which is a billion times more important, is that we register and turn out enough voters 134 days from now to hold the White House and Senate, take back the House, and keep from losing the Supreme Court for the next 20 years.  If you don’t think it matters to you, too, consider the Clinton years versus the Bush years.  Consider Roosevelt versus Hoover.  Consider the side that “believes in” science and evolution and investing in the future and the side that believes the bridges will repair themselves if we can just cut taxes for the best-off low enough.  But see?  I’m obsessed and before you know it, I’ve gone off on a rant.

My second obsession, it will not surprise long-time readers, is this oh-so-unusual company, Borealis.  So many red flags!  So much that’s hard to explain!  And yet the plane moved — in 2005, with an early-stage motor running alongside it on a dolly, and this month, with what they say are two actual WheelTug motors so small they fit inside the two wheels of a 737’s nose gear.  And with four letters of intent signed by four airlines.

It has come to this: I am in love with an electric motor.  And an electric motor, to make it all the more absurd, I have never even met.

So for what it’s worth — (nothing?) — here’s how I do the math.  And I do it over and over because that’s how obsessions work.

First I assign a 50% chance to the possibility that, even though we have video showing that WheelTug appears to work, they will not be able they will not in fact be able to make a production model that works well enough to be put into service.  (I include in that the possibility it will not win FAA certification — although, remember, the WheelTug motor is in no way “mission critical.”  If it fails, the captain just taxis around using his or her engines as he or she always did.)

Of course, no one can say whether that 50% estimate is fair.  Maybe the chances of failure are 95% for reasons I just don’t get.  Or maybe 25% would be a better guess.  (I hope I hope  hope.)

But if we go with 50%, then the next hurdle is: what are the chances this thing will in fact become the industry standard? I do think every airline will want WheelTug — or a competitor — if it becomes available, because why on earth would you not want to save $500,000 a year on each of your jets?  But what if, say, Boeing next week announces its own even better motor?

Let’s assign a 50% chance to that as well.

So this gives us a 25% chance (50% times 50%) that WheelTug might in a few years by in the nosegear of most  commercial jets — say, 10,000 airplanes.  And that the company might be netting $50,000 a year from each one.  (I’m thinking that to save north of $500,000 a year, an airline would pay $100,000 a year, and that half that could be profit.)  So there’s a 25% chance of 10,000 times $50,000 (which is to say $500 million) in profit.

What is a company making $500 million a year worth?  At 5 times earnings: $2.5 billion.  With 5 million shares outstanding, that’s $500 a share.  But if there’s “only” a 25% chance of this, then $625 million — $125 a share.

Let me rush to say that in this scenario there’s still a 75% chance you will lose all your money. This is not a speculation to make with anything other than money you can truly afford to lose.  But if there’s a 25% chance it will one day be worth $500 a share?  I bought a little more last week after watching the video.  Which is sort of ridiculous, because after 13 years of buying it (mostly on dips), I already have so much.  But — this being an obsession — I could not resist.

Let me rush further to say that I’m not figuring in here the dilution — Borealis owns only most of Chorus Motors, which owns only most of WheelTug.  But then neither am I allowing for the possibility that the company should sell at 7 times earnings instead of 5 times earnings, or that its motor technology could find a use in something else, like cars.  Or that any of its other scoffed-at technologies might actually prove real.  Or that its Canadian mineral deposits might someday actually have realizable value.

Let me rush finally to say that there’s no guarantee that, even if the company succeeds with WheelTug, management will not find ways to squander all the proceeds.

All I can promise you is that if you do buy any shares, you will not be buying them from me.

 Tomorrow: A Very Fun 6 Minutes From Moscow

 

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