I am traveling again, as always lately, and so I will structure this column as Random Gleanings, in an homage to DLJ's great investment strategist of the 80s and 90s, Eric Miller.
Sarcos Technology and Robotics (STRC) . The latest edition of my firm, Excelsior Capital Partners, Fireside Chat series was Tuesday with Ben Wolff, CEO of Sarcos. STRC shares have risen 13% in the past five trading sessions, and I would love to take credit for that, but here is the video and you can watch it and judge for yourself. Ben has an amazing story to tell, and he does it very well.
I am so sick of tech-for-the-sake-of-tech companies, but STRC is exactly the opposite. With more than 30 years of pedigree, from developing human prosthetics to theme park animatronics, and now to the alpha versions of Sarcos' human-worn Guardian XO suit and human-controlled robot avatar, the Guardian XT. Sarcos solves a basic problem, as all great tech companies do. In this case, that problem is a simple one: humans just don't want to do physically taxing jobs.
Based on recent BLS figures, in fact, one might conclude that humans don't want to work at all. So, Sarcos' mind-blowingly cool tech and huge patent estate (140 granted, 90 more under application) serves as a workforce multiplier. The global economy - Ben noted Sarcos is also focusing on Europe and Korea, but notably not on China, where labor costs are lower and IP protection is flimsy - is short of qualified workers for physically demanding jobs.
I will have a much longer write-up summarizing my conversation with Ben, who was both gracious with his time and incredibly helpful with financial projections, in my next publication for OHM Research. Follow me on LinkedIn, and you will see it there after it is published.
Tesla (TSLA) . I am not going to go down the rabbit hole on 4Q21 3/Y delivery numbers (watch my OHM Research feed for more on that) in this column, but I will highlight Tuesday's excellently researched article in the WSJ, which showed once again that solar is Elon's Achilles' heel. As a New York State taxpayer I am continually horrified by my state's awful funding for the Buffalo Blunder project - celebrated by our former governor Andrew Cuomo - for Tesla's chronically underperforming solar facility on South Park Avenue. Tesla theoretically will have to pay New York State $41 million if production milestones aren't hit by year-end (they won't be, not even close, but TSLA will slither out of paying the actual fine, which has already been delayed once,) but the bigger issue for TSLA shareholders is that Tesla's solar panels just don't work, and are subject to hazards, including fires. That is the gist of the whistleblower claim that the SEC is now investigating. There is more to Tesla than EVs. Tesla's purchase of SolarCity was a shady self-deal that enriched Musk and his family members. The SEC is slow, but not stupid.
But as corrupt and morally bankrupt as New York State politics may be, we just can't hold a candle to Western Europe's nanny-ness. Those nannies are in the process of attempting to kill BP (BP) and Royal Dutch Shell (RDS.B) , which is fleeing the Netherlands to drop the Dutch and adopt a UK corporate structure. Norwegian new car sales are currently composed of more than 70% EVs, with hybrids representing another quarter, and the country is a green poster child. Yet, did you know that Norway has the best positioned oil and gas company in Europe and one of the best in the world?
Yes, Equinor (EQNR) . I already own too much Exxon Mobil (XOM) in my and my clients' accounts, so I am adding EQNR gradually this week. Equinor management are quiet - typical Scandinavian reserve blended with 2021 style wokeness - but does EQNR have an amazing resource base, especially in natural gas?
Finishing up in Europe, wait until Elon opens his factory in Grunheide, near Brandenburg, Germany. Once that thing is up and running...oh, boy, The combination of government intervention and the inevitable formation of a Works Council led by Germany's uber-powerful IG Metall labor union is going to be a Texas-sized headache for Elon. I spent five years of my life trekking back and forth from the UK to Germany to visit Daimler (DDAIF) , BMW and Volkswagen (VLKAF) , and still have many friends at those companies. They are all anxious to see how Tesla handles the sturm und drang of German labor relations.
It is tough to make anything there, let alone something as complex as a car. Welcome to the Küche, Elon. Just make sure you can handle the heat. Texas has very few externalities. Europe has... a few too many.
