What Zipline’s Head-Turning $20 Billion Valuation Means for Our Drone Holding
On Wednesday afternoon, Bloomberg News reported that drone delivery and logistics startup Zipline is in talks to raise roughly $1 billion in a funding round that would value the privately held California company at about $20 billion. The company is apparently in early talks to raise this capital, which would almost triple its previously understood valuation.
Does this hurt or help $10,000 Portfolio holding Ondas Inc. ($ONDS)?
Good question. Zipline is already competing in the unmanned aircraft space, so there won’t be an issue related to an increase in competition or decrease in market share. In addition, this is a delivery/logistics company. Ondas is more a defense contractor than anything else.
What could happen that would be a negative for Ondas would be investment dollars that could be drawn to Zipline when and if they go public that might have otherwise gone towards ONDS. Actually, I see the sharp increase in valuation as a potential positive for the entire industry.
Publicly traded companies in the drone/counter-drone/unmanned vehicle space in addition to Ondas, include AeroVironment ($AVAV), Unusual Machines ($UMAC), Kratos Defense ($KTOS), Red Cat Holdings ($RCAT), and defense/aerospace giants such as Boeing ($BA), General Dynamics ($GD), RTX ($RTX), Lockheed Martin ($LMT) and Northrop Grumman ($NOC).
Other Portfolio News
Peloton Interactive (PTON)
On Thursday, analyst Nathan Feather of Morgan Stanley ($MS) reiterated his “sell” rating on Peloton ($PL) as well as his $4.50 price target. Feather is rated at 2 1/2 stars out of five stars by TipRanks. He has compiled a 39% success rate over the past two years while generating an unsightly average return of -2.7%.
Smith & Wesson Brands
Just a heads up. Portfolio holding Smith & Wesson ($SWBI) declared a $0.13 quarterly dividend earlier this month for shareholders of record September 17, which is today. The stock is trading ex-dividend today. The dividend itself will be paid on October 1. SWBI currently trades at a nice 4% dividend yield.
Trading
The portfolio is going to take a powder Thursday and watch the market absorb the Fed news and moves in yields as well as suddenly lower energy prices. If something were up in the high-single digits (percentage pointwise), we would probably shave that position at least a little.
Wednesday’s Intentions vs. Actual Trades
– Sell 25 shares of $ALTO at or close to the last sale of $4.02 to close this position.
– Sold 25 shares of ALTO at $4.10.
– Purchase one $OCUL $11 Sept 18th call at $0.15 or better to close this position
– Bought one OCUL $11 Sept 18th call at $0.05
Thursday’s Intentions
No Trades intended.
Current Positions
Long 60 shares of $ASPN at $5.1083. Target Price: $10. Last sale: $4.99.
Long 100 shares of $EVLV at $5.7883. Target Price: $8.50. Last sale: $5.21.
Long 100 shares of OCUL at $8.473. Target Price: $11. Last sale: $10.07.
Long 250 shares of ONDS at $8.0932. Target Price: $12. Last sale: $7.41.
Long 100 shares of PL at $20.3367. Target Price: $26. Last sale: $16.31.
Long 35 shares of PTON at $5.1236. Target Price: $9. Last sale: $4.90.
Long 7 shares of $RKLB at $73.8629. Target Price $97. Last sale: $65.30.
Long 120 shares of $SOFI at $16.0609. Target Price: $24. Last sale: $17.24.
Short one SOFI $22 Nov 19th call at $1.20, Last sale: $0.35.
Long 50 shares of SWBI at $14.0414. Target Price: $19. Last sale: $13.10.
Long 70 shares of $VELO at $11.3871. Target Price: $18. Last sale: $10.47.
Cash: $316.96.
Portfolio Value: $9,680.28, -3.2% from inception on March 24th.
At the time of publication, Guilfoyle and the $10K Portfolio was long ALTO, ASPN, EVLV, OCUL, ONDS, PL, PTON, RKLB, SOFI, SWBI and VELO. Guilfoyle was also long RTX and LMT equity.
