Company
REE
-17.24%
closure:0
opening:1.46
High:1.46
low:1.2
cycle:—
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The Israeli develops car parts, brake systems, mounts and various modules in order to form the basis for electric and autonomous vehicles. The company was issued in July last year at a value of $ 3.6 billion in the Spock merger, as part of the wave of mergers that occurred during that period, and further managed to jump 25% after the issue.
Since then, the market has been severely disappointed with the Spock method and dropped most of these issues by tens of percent, and REE has not escaped this fate either. It is now trading at $ 1.2 after a further drop of 17% yesterday, a price that reflects its market capitalization of $ 287 million.
Why is the market disappointed with a company that does not anticipate revenue before the end of next year?
In this case, it is not so clear why the market is so disappointed, when the company said in advance that it does not expect revenue before 2023. The CEO said in an interview at the time that the company will be “Intel of the automotive world.” As a role model, but the idea was that the company would become a market leader: “No matter what car you have, its base will be us,” he said, “Our big advantage is that we know how to build car platforms in any size and shape of car, faster, lower And much cheaper, compared to any other fireplace. ”
The company’s forecast was to invest in the coming years in building production capacity in various places in the world including the United States, Europe and Japan. The money raised should be enough for the company to carry out its business plans for the coming years. According to the company’s prospectus, it expects revenue of $ 344 million in 2023, $ 2.7 billion in 2024 and $ 5.7 billion in 2025 and no less than $ 10.4 billion in 2026. The company’s EBITDA forecast in the prospectus was $ 275 million in 2024, 904 $ 1 million in 2025 and $ 1.7 billion in 2026. Unpretentious forecasts.
Since the optimistic days of July 2021, many sales orders have been placed on the New York Stock Exchange computers and the company has lost 88% of its value. The market is probably increasingly realizing that talk does not cost money and guaranteeing hundreds of millions of dollars in vain is possible in an interview, but there is probably no chance of meeting these astronomical forecasts.
Last May, Peretz was optimistic about the company’s investors due to an announcement of progress regarding the commercial launch, including the implementation of a robotic production line at the Coventry production plant in the UK.
At the same time it is important to note that the company has in fact not yet broken any promise. The fund has $ 240 million and it continues to operate according to the business plan and in fact did not expect to show any revenue at this stage.
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