Following on yesterday‘s graduation speech . . . here’s a story about young graduates out to make a lot of money — but mainly to give it away. Do you know Peter Singer’s classic question about the toddler drowning in a shallow pond? Would you muddy your shoes and be late to work to save her if no one else were around to help? Do you know about GiveWell.org? If you have a minute, read the story.
Hoping to make a lot of money myself one day, I’m still enjoying Tuesday’s airberlin announcement, wherein WheelTug picked up 110 more potential planes to retrofit. Trading in Borealis stock barely budged. But airberlin stock was up — choose the three-day chart here to best see it — even in the face of an unrelated sell recommendation (if I’m reading this translation right). You could say that the difference is that airberlin has some credibility in the financial market, so when it announced what it believed to be good news, some people bought shares; whereas Borealis, after 14 years of bold projections and no revenue, has earned a first class baggage allowance of skepticism.
And yet . . . the thing works.
Pick your magician: it’s one thing to make a jet vanish (it was a small jet, and, even if it really did vanish, how is that valuable?); quite another to drive one around for hours with no assist from the main engines, potentially saving a fortune (try that, David Copperfield).
If the system gets FAA Certification, what airline would not want this money-saving capability?
And because the system is not flight critical . . . and because so many airlines want it and so many experienced partners are working to make it happen . . . why is it crazy to think it may get certified?
The system is estimated to save more than $700,000 a year per plane.
Why is it nuts to think WheelTug (a subsidiary of Chorus Motors, which is a subsidiary of Borealis) could net $50,000 a year in profit from each leased system?
There are something north of 10,000 jets that could be retrofitted with WheelTug. So multiply $50,000 times 10,000 planes and you get half a billion dollars a year. In profit. Assign that a multiple of 10 and you get a $5 billion value, which would make for a hundred-fold jump in the price of the stock.
Sure, there could be competitors; but as of yet, no airline I know of has signed with one.
And sure, I’m not taking into account that Borealis owns only most — not all — of Chorus Motors and that Chorus owns only most — not all — of WheelTug.
But then again I’m also not assigning any value to the possible value of the company’s various technologies for, say, automobiles. Or its other potentially valuable assets.
So I frankly don’t get why the stock isn’t higher.
It remains highly speculative — and bizarre, with its headquarters in Gibraltar and all the rest. But is there not by now a reasonable chance — a 50% chance or a 30% chance or a 20% chance — the vision will be realized? If so, this is one heck of an under-priced lottery ticket.
But I’m in no rush.
What was that Sydney Greenstreet said at the end of “The Maltese Falcon” once he knew the real jewel-encrusted falcon had eluded him? “Seventeen years I’ve wanted that item, and have been trying to get it. If we must spend another year on the quest . . . well, sir, it will be an additional expenditure in time of only [he pauses to calculate] five and fifteen-seventeenths percent.”
Quote of the Day
Your average Wall Streeter, faced with nothing profitable to do, does nothing for only a brief time. Then, suddenly and hysterically, he does something which turns out to be extremely unprofitable. He is not a lazy man.~Fred Schwed, Where Are the Customers' Yachts?
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