I agree that there needs to be a balance between debt and equity financing for Aptera. But still overall this is good news! With a general slowdown for EVs in the U.S. Aptera really needs to start production before they IPO. Once Aptera production starts scaling, then financing and grants will be much easier to come by.
Always a pleasure to watch and listen to your analysis. As far as dilution goes, my opinion is a bit different. At the moment these are not truly tradable shares, unless someone approaches you to purchase them at a deep discount they are going to be actually worthless until production starts and IPO is achieved. So when I hear dilution, you really can’t dilute something that has no value to us investors. My hefty investment (at least hefty to me) is to try and get this dream realized. If it does then there is a potential for a return.
I know Aptera has been showing their prototypes here and there around the country, but they need to REALLY accelerate this practice so that tens of thousands of people around the country can see and ride in these impressive vehicles and spread the word.
The best of all possible scenarios would be if Aptera had found their $60 million investor in the UAE and could begin production right away. Clearly this isn't that. At least part of the funding is not going to be available immediately, although if Chris is calling for production to begin in 2025, that suggests he expects it to be there within a year. In addition, it was always understood that that $60 million was just to start production. More will be needed to continue it. And if the start up capital is coming in over time, then that funding to continue production will have to cone in over time too. So is this as grest as it could have been? No, but it is still pretty good and more than I was expecting, frankly. It's more uncertain than we were hoping for, perhaps, but none of this is certain. We're talking about the automotive industry. And the oil industry. Aptera has a hard headwind to fight.
I'll be honest, the vehicle looks great, but the latest update left me with more questions than answers. I won't be investing, but I might get a reservation.
This looks to be excellent news. A small clarification though: dilution doesn't necessarily mean that the price per share is reduced. Rather, it means that there are more shares, so your percentage of the total shares is reduced. For example, if you have a company that is worth $1 million dollars, and a new investor comes in with an additional 1 million dollars to invest in the company, they will be issued new shares to represent that new value. The company will now be worth two million dollars, and have twice as many shares as it had before. The price per share has not changed. If however The new investor is able to invest at a reduced share price to previous investors, then it's a different story. But we simply don't know yet whether that's true
Exactly. But simple supply and demand theoretically reduces the price quickly because US capital will sell huge amounts of stock soon after the IPO, to cash in as fast as possible while the price is high. Probably. Other major shareholders and Aptera fans will be more restrained. At least that's my prediction. But yes technically dilution doesn't directly affect price, but in reality it most likely will.
@@passivlife it's possible, but they're only going to IPO when they start production, at which point there's a much stronger thesis for long term growth. Honestly I think the price will be higher in the ipo
My guess is they’ll need $130M. . Half of it in the form of a line of credit. Equity is better than debt as they should reach positive cash flow as soon as possible.
You suggest giving up equity = giving up control, however issuing non-voting shares would allow principals to retain control… correct? Though dilution of share value remains a concern if they don’t borrow to finance production. I hope you’re correct that they’ll mostly use loans & (possibly) govt. grants to reach production.
Half correct. There are a few different types of shares. Aptera sell type B mon voting common stock to most people at the moment. But these become standard class A voting shares after the IPO. Aptera could issue them "prefered shares" which are also non-voting and would not convert to type A common stock, but this is unlikely to happen because US capital will want to sell them easily on the open market for maximum profit.
It is good only if this is a debt-based loan and not equity. If control can go elsewhere (out of Chris and Steve's control), that will be it for me; shares will be sold. Hope it's the former.
To my understanding there are different types of shares: ones with voting rights and ones without. The ones offered here are without voting rights I guess.
There may be less risk in the investors gaining more control over the company once Aptera has vehicles in production and on the road. The 2005 Aptera failed because the CEO abandoned the Aptera and instead decided to design a standard four wheeled automobile with higher weight and drag coefficient. They did this in order to secure a government grant, but the fear that the Aptera design was unproven had to be a factor. Once Apteras are on the market, though, it will be much more difficult to shut down the production lines, cancel all preorders for existing sales, and begin production of industry standard automobiles. It wouldn't be impossible, or course, but it would be seen by most investors as a massive loss of potential income. It will be far more likely that investors will demand that Chris and Steve accelerate their timetable for their already planned development of sedans and SUVs based on the platform. Chris and Steve may think the risk of losing control of the company is not as much of a threat under those circumstances. If it turns out that Apteras aren't in demand, then the business is doomed no matter what they do. Maybe they can shift to a four wheeled design that still fits the Aptera concept, but they will lose a lot of their uniqueness.
Aptera was designed for low production cost. They literally only need 65 million plus maybe a small safety buffer. They already spent 100 million to get to this point though. Just the last bit remaining.
They needed the funding that's true. But they also had options. They have been trying to get the best deal they could. There is no point taking on debt before its necessary. Better to get as far as you can without it first. They turned down funding previously don't forget.
@@passivlife They say they had options, but i stopped believing what they say a long time ago They should prove things if they claim to be transparent. Like the solar charging Like the 10 miles per kwh Like the belly cooling Like the speed, abd distance Like the results from the windtunnel There are too many red flags....
@@shrimptopian3392 And they said they will, during the investment webinar. As an aside, Aptera has been the most transparent car company I've ever seen.
They can't be more transparent. Any potential deals are always subject to an nda. Actual vehicle performance and specifications can only be given out after the production intent vehicles are finished, which they are building as we speak.
@@passivlife If you look at their latest video, they are "Working" on the Binc.... NOT, you can clearly see that is the same as when it arrived almost 8 werks ago 🤔 Even more obvious is the way the people pretend to work on the Binc It's one big show, and i am sorry to say it, but it is starting to be an outright scam
It could be, that's true. But then both sono and lightyear have similar IPs up for grabs to the highest bidder. Apteras IPs are primarily in pv. Until other evs make s move on pv, it's unclear how valuable they really are.
To the point, just how we feel about this news after postponing the April update for 2 weeks. Let's all x our fingers (toes crossed voluntarily ;-) ) that the financing for the road to production will be sustainable and resillient.
It is simply replacing Republic who does crowd funding with a company who does investment that traditional investment companies do not. In other words given how Aptera recently moved language around in their annual filing they may end up selling shares at heavy discount in order to obtain funding. They do not have much in assets for weighing against loans and their IP has no demonstrated value until production occurs. Plus most telling, until they reach production there is no accurate means to measure actual sales potential at that price point they will actually charge; hint that 25k Aptera will never exist and the LE will be closer to 50k.
Interesting perspective. I think this deal is the reason the language in the filing changed. They may already have sold many reduced price shares to US capital who will then sell them on at a profit. Who knows. I'm sure we'll find out more at the webinar.
I am willing to deal with dilution if this gets Aptera to production.
You are a great example to other podcasters how to be succinct and to the point!
I agree.... very well said, making it easy to understand.
Thank you for your clear and easily understood description. We can't wait to hear what comes out of the June 6th webinar!
I agree that there needs to be a balance between debt and equity financing for Aptera. But still overall this is good news! With a general slowdown for EVs in the U.S. Aptera really needs to start production before they IPO. Once Aptera production starts scaling, then financing and grants will be much easier to come by.
Thank you for your input on this. Looking forward to the investor webinar
Always a pleasure to watch and listen to your analysis. As far as dilution goes, my opinion is a bit different. At the moment these are not truly tradable shares, unless someone approaches you to purchase them at a deep discount they are going to be actually worthless until production starts and IPO is achieved. So when I hear dilution, you really can’t dilute something that has no value to us investors. My hefty investment (at least hefty to me) is to try and get this dream realized. If it does then there is a potential for a return.
I know Aptera has been showing their prototypes here and there around the country, but they need to REALLY accelerate this practice so that tens of thousands of people around the country can see and ride in these impressive vehicles and spread the word.
They will with one of the early PI builds for press and shows. You can bet it will be traveling!
@@glennzajic7318 I hope it's more than just one!
The best of all possible scenarios would be if Aptera had found their $60 million investor in the UAE and could begin production right away. Clearly this isn't that. At least part of the funding is not going to be available immediately, although if Chris is calling for production to begin in 2025, that suggests he expects it to be there within a year. In addition, it was always understood that that $60 million was just to start production. More will be needed to continue it. And if the start up capital is coming in over time, then that funding to continue production will have to cone in over time too.
So is this as grest as it could have been? No, but it is still pretty good and more than I was expecting, frankly. It's more uncertain than we were hoping for, perhaps, but none of this is certain. We're talking about the automotive industry. And the oil industry. Aptera has a hard headwind to fight.
I'm going with the great news train of thought.
Great news!
Iiiit's gooood! Like that you have put the champagne in the fridge 😊
I'll be honest, the vehicle looks great, but the latest update left me with more questions than answers. I won't be investing, but I might get a reservation.
This looks to be excellent news. A small clarification though: dilution doesn't necessarily mean that the price per share is reduced. Rather, it means that there are more shares, so your percentage of the total shares is reduced.
For example, if you have a company that is worth $1 million dollars, and a new investor comes in with an additional 1 million dollars to invest in the company, they will be issued new shares to represent that new value. The company will now be worth two million dollars, and have twice as many shares as it had before. The price per share has not changed. If however The new investor is able to invest at a reduced share price to previous investors, then it's a different story. But we simply don't know yet whether that's true
Exactly. But simple supply and demand theoretically reduces the price quickly because US capital will sell huge amounts of stock soon after the IPO, to cash in as fast as possible while the price is high. Probably. Other major shareholders and Aptera fans will be more restrained. At least that's my prediction. But yes technically dilution doesn't directly affect price, but in reality it most likely will.
@@passivlife it's possible, but they're only going to IPO when they start production, at which point there's a much stronger thesis for long term growth. Honestly I think the price will be higher in the ipo
Have any investors received their invitation to the webinar yet? I think we’re supposed to get them today, right?
My guess is they’ll need $130M. . Half of it in the form of a line of credit. Equity is better than debt as they should reach positive cash flow as soon as possible.
You suggest giving up equity = giving up control, however issuing non-voting shares would allow principals to retain control… correct? Though dilution of share value remains a concern if they don’t borrow to finance production. I hope you’re correct that they’ll mostly use loans & (possibly) govt. grants to reach production.
Half correct. There are a few different types of shares. Aptera sell type B mon voting common stock to most people at the moment. But these become standard class A voting shares after the IPO. Aptera could issue them "prefered shares" which are also non-voting and would not convert to type A common stock, but this is unlikely to happen because US capital will want to sell them easily on the open market for maximum profit.
Production funding still not secured………production maybe will start in 2026
Very realistic.
It is a good thing.
I’m new to crowdfunding shares. How will the value of our seed money shares change post IPO?
They should be converted into normal shares after the IPO. That means the market will determine their value. Could go up or down. Hopefully up.
Are you still making content? Perhaps elsewhere? It’s fine to take an extended break or move on to other things, I’m just curious. Cheers
I'm on a long vacation at the moment. Will be back in a few weeks.
@@passivlife Great! Enjoy your time, no rush! 🙂
It is good only if this is a debt-based loan and not equity. If control can go elsewhere (out of Chris and Steve's control), that will be it for me; shares will be sold. Hope it's the former.
To my understanding there are different types of shares: ones with voting rights and ones without.
The ones offered here are without voting rights I guess.
Unlikely to be class b shares. Class.b (the non voting ones that are being sold at the moment, will convert to class A common stock after the IPO.
There may be less risk in the investors gaining more control over the company once Aptera has vehicles in production and on the road. The 2005 Aptera failed because the CEO abandoned the Aptera and instead decided to design a standard four wheeled automobile with higher weight and drag coefficient. They did this in order to secure a government grant, but the fear that the Aptera design was unproven had to be a factor.
Once Apteras are on the market, though, it will be much more difficult to shut down the production lines, cancel all preorders for existing sales, and begin production of industry standard automobiles. It wouldn't be impossible, or course, but it would be seen by most investors as a massive loss of potential income. It will be far more likely that investors will demand that Chris and Steve accelerate their timetable for their already planned development of sedans and SUVs based on the platform.
Chris and Steve may think the risk of losing control of the company is not as much of a threat under those circumstances. If it turns out that Apteras aren't in demand, then the business is doomed no matter what they do. Maybe they can shift to a four wheeled design that still fits the Aptera concept, but they will lose a lot of their uniqueness.
It takes billions to fund production.
For classical OEM’s yes.
For aptera with their simple manufacturing and homologation not.
Perhaps not billions, but hundreds of millions for certain.
@@JoeBManco definitely more than they have. A lot more than they have.
Aptera was designed for low production cost. They literally only need 65 million plus maybe a small safety buffer. They already spent 100 million to get to this point though. Just the last bit remaining.
@@passivlife ha ha just the last bit. They are out of cash and the most expensive part is yet to come.
It's desperate news
Aptera is doing desperate move after desperate move the last 6 months
They needed the funding that's true. But they also had options. They have been trying to get the best deal they could. There is no point taking on debt before its necessary. Better to get as far as you can without it first. They turned down funding previously don't forget.
@@passivlife
They say they had options, but i stopped believing what they say a long time ago
They should prove things if they claim to be transparent.
Like the solar charging
Like the 10 miles per kwh
Like the belly cooling
Like the speed, abd distance
Like the results from the windtunnel
There are too many red flags....
@@shrimptopian3392 And they said they will, during the investment webinar.
As an aside, Aptera has been the most transparent car company I've ever seen.
They can't be more transparent. Any potential deals are always subject to an nda. Actual vehicle performance and specifications can only be given out after the production intent vehicles are finished, which they are building as we speak.
@@passivlife
If you look at their latest video, they are "Working" on the Binc.... NOT, you can clearly see that is the same as when it arrived almost 8 werks ago 🤔
Even more obvious is the way the people pretend to work on the Binc
It's one big show, and i am sorry to say it, but it is starting to be an outright scam
Don't forget their IP among their assets.. I think it's far more valuable than some may presume.
It could be, that's true. But then both sono and lightyear have similar IPs up for grabs to the highest bidder. Apteras IPs are primarily in pv. Until other evs make s move on pv, it's unclear how valuable they really are.
IP is less important these days, making a great affordable product is wayyyyyyyyyyy more important
To the point, just how we feel about this news after postponing the April update for 2 weeks. Let's all x our fingers (toes crossed voluntarily ;-) ) that the financing for the road to production will be sustainable and resillient.
It is simply replacing Republic who does crowd funding with a company who does investment that traditional investment companies do not. In other words given how Aptera recently moved language around in their annual filing they may end up selling shares at heavy discount in order to obtain funding. They do not have much in assets for weighing against loans and their IP has no demonstrated value until production occurs. Plus most telling, until they reach production there is no accurate means to measure actual sales potential at that price point they will actually charge; hint that 25k Aptera will never exist and the LE will be closer to 50k.
Interesting perspective. I think this deal is the reason the language in the filing changed. They may already have sold many reduced price shares to US capital who will then sell them on at a profit. Who knows. I'm sure we'll find out more at the webinar.