Post by
Starsearcher80 on Jul 09, 2023 12:32am
THE BIRTH OF A UNICORN STOCK
The Unicorn stock. We've all heard of one. We've all dreamed of being a part of one. But the reality is that many of us will spend a lifetime and rarely see a true Unicorn stock, let alone have the good fortune to catch the stock early. For myself, in close to 35 years in the market, I think I've come across three true unicorn stocks. Only one of them did I catch early, and although I made a lot of money on the stock, I also left a lot on the table. The other two I came to much later, mostly to watch and learn.
Unicorns stocks are of course rare. I've seen any number of companies come close to this Unicorn status, but there are just SO many conditions that have to time perfectly for the birth of a true unicorn stock to materialize. Of course the gazillion dollar question is are we seeing the birth of a Unicorn stock with Nano? The answer could in fact be "yes". So let's go through these conditions:
1) The field of the company must be new/emerging:
The field of rechargeable batteries is not new per se. Lithium battery technology is close to 40 years old now. But what IS hugely new is the MASSIVE race to ungrade the technology to produce longer lasting batteries at huge volumes and progressively lower costs. Of course this is driven by the burgeoning EV industry, but also the battery storage facilities being built to help cities deal with over-burdened grid useage.
As it pertains to these new massive industries, it can be simplied as a race to build faster, cheaper, greener batteries at scale. It is the very nature of the competitive market to drive this need. Now, if it were just a race to build at scale, really, that would be solveable fairly easily. Just build more and bigger factories. But put the compatitive nature of free market will have these massive factories tripping over each other to acheive these competitive goals.
I want to highlight these competitive market words again.Keep these words close: Cheaper, faster, greener, longer lasting. The battery makers who achieve these goals will thrive. Those who don't will ultimately fail.
2) The Unicorn company has to have something that is not only truly unique but have "game changer" capability:
For Unicorn status, this is what first intrigued me so much with Nano. Current processing technology is extremely dirty, slow, costly, and the battery degrades. In my thinking, solving ANY one of these four competitive goals would give Nano a home run opportunity. But Nano is not just solving one of these problems. They are solving ALL FOUR. Via the One Pot processes, the process is cheaper, faster, greenerinfinitely greener, and battery degredation is greatly improved. That Nano is solving all four issues is not just a home run. It's an abolute out-of-the-park home run. And even these words are putting it far far too mildly. Nano is fitting RIGHT into the competitive need of these massive factories being built, and again the words are right there. Cheaper, faster, greener, longer lasting. Unicorn potential? Absolutely. Game-changing technology? Absolutely.
3) The Unicorn stock must be ahead of the competion:
For all intensive purposes, Nano does not currently have any competition, and if there is any competition out there, Nano is literally years ahead of them. I've spent a LOT of time searching for that competition, as have others, and to the best of our collective knowlege, Nano currently stands alone. That's kind of competitive advantage takes your breath away. It is also a condition for Unicorn status, and in this regard, Nano qualifies. Not just "kind-of" qualifies. FULLY qualifies.
4) Governments must support the emerging technology:
There are any number of examples of companies that have legislation that ultimately impeeds their growth. Most of these companies were independent, without any Government support, that forged their own Unicorn-like path, only to then get road-blocks put up by Governement. Tech is littered with examples of this.
But as it pertains to the super-charged growth of the battery industry, I don't think I've EVER seen governments collectively trip over each other to financially support a new industry. There are now MASSIVE infusions of Governement dollars into battery tech, and at every level of Government, absolutely super-charging this race. Much of this support is actually driven by the geo-political move to on-shore cirtical industries. We saw this happen first with chip-makers, and now with EV battery need. With 95% of the processing currently being done in China, North America now feels understandably vulnerable if China were to ever "shut the taps off" so to speak. It is a VERY understandable concern, especially as the relationship with China is now strained at best, with the potential now for worse now unfortunately coming in to view. Enter Government to solve this problem, and as quickly as possible. In the U.S. it's the Inflation Reduction Act (IRA). Onshoring is now happening at a stunning speed, and we're aloready seeing the first glimpses of this, which are already staggering in size and scope. And there will be more. Much MUCH more.
That this on-shoring is happening now is near perfect timing for Nano. Nano has also benefited directly by Government support, and there is every expectation that this will not only continue but will also be much larger. For the Canadian Goverment, Nano is already a VERY well known company in this space, and something that the Government can put up as a a huge Canadian success story.
That there is MASSIVE government support in this space, in both the U.S. and Canada, and that Nano is already a very well known company in this space, is HUGELY exciting. I have NO doubt that Nano's future will also be turbo-charged by this support. The timing of this Government support of this new industry again absolutely lays fertile groundwork for possible Unicorn status with Nano. Truly, in this area it just couldn't get any better.
5) The Unicorn company has to have the right Management at every stage of its growth:
Does Nano have the right management? I think they do. Nano has done a stunning job of anticipating this market. They have made excellent inroads with Government, and are showing signs of starting to flex without being overstated. They are actively making industry connections far bigger and far faster than what any otherwise currently small company would ever be able to do.
Nano is going to be entering a period of rapid expansion on just about every front imaginable, and this is going to present challenges that are present to any company going through similar rapid growth. Is current management up to this challenge? As much as I'd like to say yes, this is a question that can only be answered in the future, as as such, can only be put in the category of "remains to be seen". What I can say though is management has shown themselves as both prudent and adept, which is a rare combination in and of itself. This bodes well for the future, and I am willing to trust they'll meet those growth challenges with the same careful planning that they've shown so far.
Unicorn status? The potential is there. With so many of the Unicorn boxes checked, it would be a shame not to check this management box as well, as it is actually well within the company's control to "get it right".
So back to the Headline of this post:
Are we witnessing the birth of a true Unicorn stock with Nano?? All in, the potential is absolutely there, and then some.
It's an eye-opening, breath-taking proposition. And it's just SO rare that when I come across a company such as Nano with THAT much potential, with something that is THAT game-changing and unique, and the timing is THAT good with the need in the market.....well, it all stops me right in my tracks. While I can't beleive what is right there before my eyes... there it is.
So I take a breath, and smile ear to ear at the prospect. The birth of a Unicorn stock, and I'm there at the beginning. The profit potential here is jaw-dropping.