But first, for those long-suffering shareholders in Borealis: the latest annual report (covering 18 months) and information circular showing how many shares of each of its subsidiaries the company owns. There is a lot of information here — and even more in the annual reports of the subsidiaries, ChorusMotors, WheelTug, Power Chips, Cool Chips, and the others.
The biggest takeaways — to me: (a) this is actually a serious effort, whether or not it ever actually pays off; (b) WheelTug’s FAA application has been filed.
The current stock price values the entire company at $25 million (5 million shares at about $5 each). As noted here ad nauseam, paintings have sold for ten times as much. And dozens of (I would argue) equally speculative companies routinely command market caps more like $500 million, on the chance (for example) the drug they’re developing may turn out to work. If Borealis were given the same valuation — a gambler’s $500 million bet that maybe one day it will be worth five or ten times as much — the stock would be $100, not $5.
(A tidbit in the Cool Chips report: “We are now funded with the purchase of 36,000 shares of WheelTug plc at the then market price of US$126/share. WheelTug plc has gotten most of the Borealis Family’s attention and most all of its funding. This share sale was for the benefit of all the companies in the family and we expect sales to be made at ever-increasing share prices. The first sale point will be a few shares at US$270/share, and we expect within a couple of years to see 4-figure sale prices, as long as WheelTug plc progresses as expected.” If 36,000 shares of WheelTug really sold for $126 a share, and if any are ever sold at $270, that would be another suggestion that Borealis shares — controlling roughly one WheelTug share each — are worth more than $5. That said, the last decade’s experience with this stock suggests potential investors should not get carried away. Buy shares, if at all, with money you can truly afford to lose; and always use “limit orders” when buying, as the stock is very thinly traded.)
And now a word about the “unbelievable success” top Trump spokesman Sean Spicer told ABC’s Jonathan Karl the President Elect has already had bringing 6,000 jobs back to the U.S. (which he arguably did not do — see below — and which, in any event, should be seen in the context of the 39 million net new private sector jobs created under the Clinton and Obama administrations, versus the fewer than one million created under the most recent 12 years of Republican administrations).
From the New York Times:
President-elect Donald Trump would like everybody to believe that his election is energizing the economy by forcing businesses to create thousands of jobs in the United States. And companies like Sprint seem perfectly happy to go along with this fiction because they know they can profit handsomely by cozying up to Mr. Trump.
On Wednesday, Mr. Trump said Sprint’s top executive had told him the company would add 5,000 jobs “because of what’s happening and the spirit and the hope.” But it turns out that the jobs are part of a previous commitment by Sprint’s parent company, SoftBank, whose chief executive said at Trump Tower in December that it would invest $50 billion and create 50,000 jobs in the United States. And even that promise was part of a $100 billion technology fund that SoftBank announced in October, before the election. In sum, Mr. Trump’s statement was hot air, just like his tweet in which he thanked himself for an increase in a consumer confidence index last month. . . .
Quote of the Day
Markets are very good at what they do, in part because they harness greed and envy (in fact, all of the Seven Deadly Sins except sloth) and turn them into positive virtues.~Rocky Mountain Institute newsletter
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