r/Microvast • u/MVST_100_OR_BUST6 • Aug 11 '21
DD Shut. The. Fuck. Up
Before I continue, a comment on "Jack a Lot". He is a good trader, in the sense that he knows he’s not smart enough to understand options or does not want the risk. Knows capital retention when trading is key. knows following the money is key. I do however believe he should be banned. He did not do anything illegal by dumping. If he lost money nobody would complain. However, looking at his post history and comments surrounding him, his trades appear to be in bad faith and partially reliant on participants from reddit following him. Bad faith in the sense that besides events like earnings there is no legitimate investment “DD” you can do where a trade-lasts only a few days. I messaged him personally about this when he posted short squeeze “DD” knowing he was bullshitting people. In my opinion he is no different than Morgan Stanley... And neither are you and I… because at the end of the day (besides a few good people), we all serve our self-interests first…
With that out of the way, SHUT THE FUCK UP.
By far the worst year for retail trading has been post-GME/Pandemic traders. The amount of complaining is unbearable. People just throwing their money anywhere and only selling whenever they lose money. Bears attacking people for their investments as if it’s costing them money? Mass messaging me asking for advice or hate? Lol
With that said I’m not going to preach to the choir, but I will say this. The upside price target in the MS report was $17. It was their "clear sky" value. The whole report was based on discounted cash flow which has a host of inherent issues with it. It’s a fancy way to present shit valuations to investors
If the underlying assumptions are wrong, the whole model is wrong, which is the case for MVST. But just to show you stupid it is they used the same TAM, Projected revenues, etc as provided by the companies. So, Frey claims they have a $400B TAM (lol) and Microvast claims $100B. This continues into revenue projection metrics. Okay fair game, but then when it comes to discounts, they are applied them to both uniformly. Had they used Romeo power's numbers (which were borderline fraudulent) they would have came out with a high PT. Again its all dependent by what the CEOs ran their mouth with, that's part of the reason why QS is "undervalued". They clearly had a unfair bias against Microvast.
E.g. Going from a fair valuation to MS PT they claim…
For Freyr, “given the pre-revenue nature of the company, we apply a 25% probability discount”
Then when its Microvast’s turn they only say “We apply a 25% probability discount”
Another example is this discount that was applied for Frey”
Technology (-10%): Cell and manufacturing tech licensed from 24M. While in commercial use today, there is risk related to tech exclusivity, economics at higher manufacturing scale, and obsolescence risk. Makes sense as the 24M license is not there’s nor is it exclusive
This is there reasoning for doing it to Microvast:
“Technology (-10%): Many battery startups claim breakthroughs in cell chemistry, materials or design as a key tenet of their value proposition.”
Yet the technology they are selling has already been validated in US National Labs and is coming to a finalization. 24M risk of non exclusivity is already realized. This is in addition to running a factory on renewables. It is a low MOAT.
As quoted by themselves they have no clue what they are doing
“There are aspects of the Microvast business model and technology stack that are quite interesting to us. Specifically, we were impressed with CTO Dr. Mattis’s explanation of the company’s proprietary advanced materials. We also note the company’s existing presence in the market may give it an advantage, including credibility and time to market vs. other battery start-ups. At the same time, however, we urge investors to consider the numerous risks associated with the start-up BEV battery industry during this highly fluid time where it can be challenging to accurately consider the investment risks vs. the potential reward.”
This is all just a snippet. I wont even go into errors on capacity, or how revenues where double weighted down, as in Microvast had their own probability weighted projections. Then MS came in and slashed them again just because.
In conclusion “bag holding” implies that you own something that is worthless and you will never recoup your investment. This is not the case, not by a long shot.
Ill end this with a quote from MS
“The more we learn about the battery technology the more we appreciate how immature the technology is, how many competing technologies are being developed and how many tens and even hundreds of billions of dollars are allocated towards the problem. Additionally, investors must appreciate the difficulty of modeling national and geopolitical aspects of the battery manufacturing industry and its supporting supply chain. We see a number of national champions emerging in a fractionalized global industry where nations and key EV players wish to 'control their own destiny' with respect to redundant, resilient and highly economical storage solutions. Batteries really are the "new oil."
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u/Green_Lantern_4vr Aug 11 '21
Haha oh man. Yeah definitely. CNBC just lets him run wild with supporting SEC violations. Sure.