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This things going down
Jerry Kroll has been selling shares. He's sold 320,000 shares over the past 2 months netting himself $500K
The Solo appears to be back on the drawing board and not being released till mid 2020 now !!!! Its now Gen 3 (3rd time's a charm I guess)
They appear to have totally stopped developing the Tofino
And they appear to have backed away from their massive claims of billions in orders.
If it truly had been dealt with, the story would have been taken down and a retraction issued.
All they did was engage a lawyer.
Clearly that lawyer was unable to discredit the story
Where there is smoke
Please explain to me why I’m wrong with facts
Ad hominem attacks won’t make me run and hide
Looks like a lot of people woke up this morning and decided enough was enough.
The biggest red flag is that even Jerry is no longer claiming a number as to how many cars they will produce by years end.
Now only saying,
"we continued to prepare for the mass production ramp that we expect to take place in the second half of 2019,” said Jerry Kroll, CEO of Electra Meccanica. “We continued early-stage production at our state-of-the-art production facility in Chongqing, China with our strategic partner, while laying the groundwork to allow for automated mass production later this year."
Does this mean they are now backing off manufacturing 5,000 by years end? I always thought this was a crazy committment given their inexperience with mass production. Have they come to their senses? If so, what is the new committment?
There was also no material increase in orders.
They have had over 64,000 orders on the books for more than a year now. And more than 2/3 of them are for Tofinos.
As per the recent Annual Report MD&A, they are not even expected to have the first prototype of the Tofino for another year. So based on the Solo timeline, they are 3 or more years away from mass production.
Given their increased burn rate, the 25% tariff on Chinese cars, and the issues with Solo production, they may well be broke well before then.
Lots of big news today for Electrameccanica
The Solo is now qualified for $900 rebate from California!!!
This will help offset some of the the impact of the price rise of the vehicle that surely must happen given the other news.
Trump is reinstating the 25% tariff on Chinese made goods
Funny how Jerry has never mentioned the tariff before.
On the last Facebook live webcast, someone asked him how the trade war between Canada and China was impacting Electrameccanica.
He gave a really quizzical look and said he didnt know there was one. Then muttered along about how these things change everyday etc...
At the time I didnt make much of it.
But I think he was reacting to having dodged a bullet on a question on the USA/China trade dispute.
The market for the Solo is California. So with Trump slapping 25% tariffs on cars from China, this will probably absorb any profit that they have on their cars, based on their stated margins. Unless they can raise the price to offset the tariff.
I can't imagine the Democrats will be in a hurry to remove tariffs on cars that are stealing jobs from good Americans.
I disagree
The market, especially in China is already orders of magnitude ahead of Electrameccanica
Check out some of the competition noted in this article.
https://cleantechnica.com/2019/02/24/china-electric-vehicle-sales-jump-175-up-to-4-8-of-auto-market-in-january/
The SAIC Baojun E100 looks like an awesome little car. Two seats, 250km range, and under $15,000 (before subsidies, which as a real car, it could qualify for in USA & Canada).
And they are affiliated with GM, so the distribution network is already in place.
I read it, but have questions:
How does having a unique design for the battery cartridge generate a competitive advantage for the company?
Is it better? If so, how?
Cheaper?
Safer?
Or is it just different for the sake of being different?
I didnt denigrate them.
I said nothing negative about them or management
Letting fellow investors know that their are multiple other companies in the same space that are several orders of magnitude larger does not denigrate Electrameccanica
It is meant to keep everyone FULLY informed.
This just proves how far behind Electrameccanica is.
The Chinese electric car market is already massive.
There are already multiple manufacturers in place in China cranking out thousands of cars per month each, from facilities that totally dwarf the one used by Eletrameccanica, and they are all backed by resources (staffing/capital etc..) that totally dwarf Electrameccanica.
Multiple Chinese companies are already on the path to become the GM/Ford/Chrysler of the electric car industry.
You should have a look at the likes of SAIC, BYD, Chery & BAIC and you will see how far behind Electrameccanica is
Half the price, and 80% less seating
Wow, the Chinese production facility has really stepped up production.
Less than 7 days ago they had only made 20 Solos at the facility in China, now they are up to "about 50"
I disagree.
They have no IP
You can see how little (relatively speaking) they have spent on R&D and tooling etc... up to this point.
Why would someone target them for a buyout ?
Assume they achieve everything you say, they will have proven that there is essentially little barrier for entry in the EV market. It would be way, way cheaper to emulate them then buy them.
I highly doubt they will achieve the goals you set for them, so we will never know if your hypothesis is correct.
This is no longer getting the same jumps with every news release.
Maybe the market is getting wise.
Who cares about signing partnerships with gum companies to add 3 vehicles.
If they have 23,000 orders for Solo on the books, any new deals are meaningless until they can prove they can actually produce a quality car in commercial quantities.
they set themselves the lofty goal of producing 50 by Mar 31 from the factory in China, and it looks like they fell way short of that target.
If they are still struggling to produce 1 a day, how on earth can they commit to have 5,000 built by the end of the year, and 25,000 built next year? They only have cash deposits for 962 Solos, so how long will the mystery buyers of of the other 22,000 on order wait?
The Tofino is now years behind schedule, so the supposed $2 Billion worth of orders for it have to be discounted. As it is, they officially only have deposits for 66 of them ($3.3M worth) so the security of the remaining $2B in orders has to be questioned now.
Like the Solo orders "secured" with a non-binding LOC, just how long will these mysterious buyers wait for their Tofinos before they go elsewhere?
the more I think about this, the more I have to wonder, why does a company that has enough orders to fill years worth of deliveries, need to invest in showrooms offering test drives of their products? Dont they just need a simple facility in which to transition from import to delivery?
This is a really nice car.
But not one that generates any value for shareholders.
It is just the electric version of the Intermeccanica.
From previous financials, they were only selling 20-30 a year, and when Electramecannica paid $2.5M for Intermeccanica, it was eventually deemed by the auditors that they paid more than $1m too much for the company.
As far as I know, they have never been certified for sale as anything other than a custom kit car. No crash testing etc...
Lots of interesting stuff in the latest financials:
The highlight for me is the ever diminishing amount of customer deposits on hand. The dollar value of deposits on hand dropped by more than $100K from Sep 30.
Here are the reported values being held for the past year:
12/31/2018 303,076
9/30/2018 408,912
6/30/2018 410,774
3/31/2018 407,844
This would suggest that More than $100K of deposits were refunded in the last quarter, with no material sales being made!!!!!
But wait, they seem to have quietly restated the deposits on hand. Previous to this year end report, it looks like they had been including "Construction contract liability" in with Customer Deposits. This meant they had been overstating the amount of contract deposits on hand by $80K-$90K until now.
The Statement of Cash flows seemingly tell the full story. This shows that Customer Deposits decreased by $44,288
This is probably 40 or so people getting their Tofino deposits back.
But the trend definitely shows that they are gaining ZERO traction with selling Solo's.
Lot's more fun stuff in the MD&A.
LOL
They were also one of the placement agents for the last share offering.
"The Benchmark Company, LLC, ThinkEquity, a division of Fordham Financial Management, Inc., and Roth Capital Partners, LLC acted as co-lead placement agents for the offering."
I could be wrong, but I think the reverse split, or "stock consolidation" as they called it, was done to get the stock to a point that made it attractive for the Nasdaq listing.
The dilution will be ongoing.
They are burning a ton of cash and not making any material sales.
But hey, no debt.
Not sure the NO DEBT, is a good thing.
If the story is so good, is the investor better off being diluted as the company raises money, or if the company pays interest?
Interest rates are low.
The one down side to debt is the potential of foreclosure I guess.
Management cant grant themselves a heap of options and get control back if the bank forecloses.
Damn those bankers with their covenants!!
I'm not the one getting paid to run the company.
I'm just a potential investor doing due diligence and looking at all the news around the company, not just the fluff.
Love that the headline says "Trying to bring...to market"
Their bankers should read this:
https://www.dummies.com/personal-finance/investing/investment-banking/investment-banking-how-asset-management-can-cause-conflicts/
And if they want a fuller understanding of the rules they may have broken
https://www.sec.gov/tm/reportspubs/investor-publications/investorpubsanalystshtm.html
Just for funs sake, here’s a quick article about the demise of the last public company Jerry Kroll was involved with. Though he wasn’t around at the end, they’d already allegedly booted him out.
https://equity.guru/2016/08/04/ever-get-the-feeling-youve-been-cheated/
I got a sense of déjà vu reading it, especially with sentences like:
“every quarter, the company would lose $3.2 million and then go get financing of $3.2 million, and that this would repeat every quarter. There was no question about it – anyone could see right there in their newsflow that this was the situation, but they had a pilot program with Ikea, so misty clouds of unicorn farts seemed to obscure the vision of investors who kept thinking, ‘this quarter for sure!’”
ROTFL
This stock is unbelievable.
Even me, who was already extremely sceptical about management integrity, is blown away today.
Not by the dilution and offering, everyone who has followed the stock for a while had to know that was coming. They are burning cash and with only limited deliveries now scheduled for 2019, they will need more and more.
No the shocker for me is who the lead on the round was.
The same investment bank that just last week issued "research" with a $6 target, is the same investment bank now leading the round at $3.60
They dont even try and disguise what looks like a pump and dump.
The day before the research is issued, the stock runs up on whispers and large volume. Then the news comes out and everyone in the know cashes in on the hysteria.
A week later the fools that rushed in get slaughtered. I wouldnt be surprised if their were people in the know shorting the stock when it took its run last week.
Of course no Tofino, years behind schedule
These guys kill me every time they move the goal posts.
It was only in January, they issued an update that they would manufacture and deliver 5,000 cars by the end of 2019. they keep trumpeting their newly opened production line in China, but now the story has changed.
https://vancouversun.com/news/local-news/second-generation-of-vancouver-designed-electric-vehicle-to-be-on-market-by-september
From the article:
Caprilli said six Solo 2.0 vehicles had been delivered to North America so far, and that would go to 20 a month starting in April. The vehicles were being delivered to the Port of Los Angeles, which is the centre of the company’s primary market.
“We are alerting people right now about the impending delivery of cars,” Caprilli said. “September we will ramp up to hundreds per month and then we will sell and lease the cars to the public.
20 a month till September, might get them to 100. Then hundreds per month after that, might get them to 1,000 by year end.
Clearly they have something limiting their production capacity, if they can only project 1 car a day for the next 6 months (assuming they dont work on weekends)
Does anyone think they will be forthcoming and let the investment public know exactly what it is limiting their production?
Or should we just keep believing that all is ok everytime they issue a press release and change the delivery timelines?
Why?
It's the same company, with the same fundamentals that saw the price drift down to the low $3's until this week.
Just because they were able to convince a firm to issue a bullish report doesnt change their ability to make and deliver cars.
It doesnt change the certainty around all the orders that are secured by LOC's
Wait till you see the financials when they come out any day and you see how much extra cash they are burning to fund the showroom in Los Angeles
And then ask yourself, why does a company that claims to have a 2 year wait for a car, need to have a showroom with sales people offering test drives.
Yes, it is a two year wait. They claim to have 23,000 Solos on order, and claim they can make 5,000 this year and 20,000 next year.
Solo isn't a car
Solo doesn't have Transport Canada certification
This budget announcement does nothing to help Electrameccanica until they can be certified (assuming they can)
Solo had over $4 billion in orders 18 months ago
Now only $2.4 billion in orders
Still cant deliver more than a few cars a month
The moment they validate that consumers outside of China are willing to purchase a car made in China then they are dead.
Lots of massive Chinese car companies are already mass producing and selling electric vehicles cheaper than the Solo (with room for more than 1 person too) Does anyone really think they can compete with the like of BYD, BAIC, SAIC or Zhi Dou ?
How much did Electrameccanica have to pay for that "research" ?
ROTFL
People who rush in and buy stocks purely on momentum are so funny.
There's a sucker born every minute.
Can’t wait to hear the update.
They stated back in. January they would import from China and deliver 50 Solos by the end of Q1.
With the recent container of 4 they got in, and the two in December, it looks like they still have 44 to go in the next 2 weeks.
Then 4950 more by the end of December to hit the next milestone they comitted to.
ROTFL
It's so quiet in here these days........
Pause the video at 0:31
That front quarter panel is not fitting very well
Whats to believe?
Their order book for one.
They say it’s $2.4 billion, but the vast majority have not paid a deposit.
And why would I doubt that number?
Well, they announced in late 2017 that the order book was over $4billion!!!!
https://investors.electrameccanica.com/press-releases/detail/11/electra-meccanica-announces-4-billion-order-book-for-solo
There order book dropped over $1.6billion in a year.
At that rate it will be at zero soon.
Yet he has issued releases last year saying, “now exceed $2.4billion” as if it had never been higher.
They have never addressed the massive drop in orders.
Maybe if it wasn’t so easy to find him to appear to make wildly exaggerated or false claims in his statements, I would be more inclined to put some faith in everything he says.
It goes to credibility.
This whole stock is based on whether you believe they can deliver on all the claims they have made.
If I can’t believe them when they talk about their past, why should I believe their predictions for the future?
Doesn't this just prove my point?
He was an employee of Kleen Speed
They are a tenant at the NASA Research Park
https://www.nasa.gov/centers/ames/researchpark/partners/industry/kleenspeed/
You too could be a tenant. they have tons of space for rent right now
https://www.nasa.gov/centers/ames/researchpark/leasing
He needs to clearly say, he worked FOR Kleen Speed, which is located AT the NASA Research Park. Not keep letting journalists report that he worked FOR NASA.
There is a BIG difference.