Looking very strong here hitting $7.26/share in after hours trading Friday following a recent CEO interview.
Arcimoto (FUV) view our previous report here.
Insiders Are All-In at Arcimoto (FUV)
Good day everyone,
Today we are continuing coverage of Arcimoto, Inc. (NASDAQ: FUV), a manufacturer of electric three wheeled vehicles. They are producing three models, a recreational vehicle (FUV), a model for making deliveries (Deliverator) and an emergency response vehicle (Rapid Responder). All can be licensed for use on public roads.
Current price $5.39 per share
On Monday last week we talked about the value of insider ownership in determining the prospects of a stock.
We said: This is one of the characteristics we look hard at in any company, sometimes more importantly than their financial metrics. The rate of insider ownership at FUV is 43.63% and that is a large position. Investors tend to look toward management favorably when shareholder value is a key goal of the company. When the insiders at a company hold such a large position as 43.63% their dedication to shareholder value is tacit.
Last Friday there was an interesting development in the insider holdings level at Arcimoto. Four insiders picked up another 182,816 shares.
Douglas Campoli CFO 6426 shares
Jesse Eisler Dir. 69,752 shares
Mark Frohnmayer CEO 78,531 shares
Joshua Sheres Dir. 28,107 shares
While insiders accumulating shares is not unusual at FUV, the story of how they were acquired is interesting. The company had financial obligations to these individuals, and they all held convertible promissory notes due in August/September of this year.
The notes were structured so that the holder could convert their note into cash or company shares. Like all insider share acquisitions, any shares they got would be restricted to insider trading rules so they cannot be immediately sold into the market at a higher price. In all four cases the insiders opted for shares at $4.25 per share.
Let that sink in. These individuals could have pocketed a combined $777,000 in cash (principal plus interest) but they opted for shares, at market price (FUV shares were at $4.25 last Friday), that are restricted. It takes a lot of faith in the future of their company to pass on a pocket full of cash and take shares “at market” and restricted instead.
Let’s grasp the status of Arcimoto right now:
They have cash in the bank to fund operations.
They have no debt.
They have over 4,000 pre-orders for vehicles.
They have a state-of-the-art manufacturing facility in Oregon.
Arcimoto (FUV) is locked, loaded, and ready to rock.
The Traders News Group
This week’s reports below
Arcimoto (FUV) Set to Dominate the EV Market
Good day everyone,
Today we are continuing coverage of Arcimoto, Inc. (NASDAQ: FUV), a manufacturer of electric three wheeled motorcycle type vehicles with bodies attached. They are producing three models, a recreational vehicle (Evergreen), a model for making deliveries (Deliverator) and an emergency response vehicle (Rapid Responder). All can be licensed for use on public roads.
Current price $5.32 per share
After hitting a high of $5.90 per share and closing at $5.32 on Tuesday, FUV shares took a slight breather as some investors took some gains. We hope you are realizing some gains. What is significant is that the shares only experienced a slight pause (-3%) indicating that investor confidence in FUV shares remains strong.
Does Arcimoto have any real pure play EV competition?
Unlike other EV pure plays (except Tesla), FUV is now manufacturing, shipping, and selling street and highway legal EVs. Companies with huge valuations like Nikola Corp. (market cap $24 billion) are not.
Most of the competitors for FUV are large multifaceted vehicle producers. In the niche of motorcycle type electric vehicles, the competition is limited to mostly smaller private companies that have yet to produce a vehicle.
Electrameccanica Vehicles Corp. (SOLO) is a publicly traded Canadian company engaged in the same market for three-wheel electric vehicles as FUV. While SOLO designs and markets their products in Canada, the actual production of their vehicles will be done at Zongshen Industrial Group Co Ltd, a Chinese company. Production of their vehicles is pending.
Arcimoto has an advantage over SOLO in that it has complete control over its manufacturing process. FUV vehicles are produced at the company’s plant in Eugene, Oregon giving FUV a “Made in America” status.
While SOLO seems to be the only real competition for FUV, we note that Arcimoto is ahead in its production and marketing efforts, shipping vehicles and producing revenues.
The Deliverator, for local and last-mile delivery, will be available to rent using the HyreCar platform beginning this summer in Los Angeles and you can get a tour of San Francisco in an Evergreen.
It is estimated that in just over a decade, battery electric vehicles will account for one out of every five vehicles sold, up from the current estimate of one out of twenty.
A couple weeks ago, FUV announced it has teamed with Munro & Associates to evaluate Arcimoto’s manufacturing processes and supply chain management to drive down costs and begin high-volume production of Arcimoto ultra-efficient electric vehicles. This is a crucial relationship as FUV has a need to produce its $80 million in pre-orders.
Another analyst has weighed in on FUV shares:
Jun-25-20 Initiated Aegis Capital Buy $6.00
Arcimoto seems to be the dominant player in its market niche. Already in production, with an estimated $80M in pre-orders, the company’s $130M market cap seems that it may have room to grow.
The Traders News Group
This week’s original report below
Arcimoto (FUV) Shares Continue to Advance Toward Their Potential
Good day everyone,
Today we are continuing coverage of Arcimoto, Inc. (NASDAQ: FUV), a manufacturer of electric three wheeled hybrid type vehicles. They are producing three models, a recreational vehicle (FUV), a model for making deliveries (Deliverator) and an emergency response vehicle (Rapid Responder). All can be licensed for use on public roads.
Current price $5.40 per share
FUV shares have done well since we reported on them the 22nd of June, gaining 50% as of this report. Congratulations to our members who have realized gains. We love this story, sector and company.
We wanted to highlight a few of the positives we see in FUV shares that could drive the price to higher levels.
Revenues: The company started generating revenues late last year and the revenues have been on a solid ramp-up. With that said, production at their manufacturing facility has been shut down or restricted since March due to coronavirus. Restrictions due to the pandemic are beyond the company’s control. More importantly, FUV has a plan in place to build their production ramp to 200 vehicles per week by next year. Their EV models sell for $20K+ so we can see a pro-forma revenue goal of $200M annually.
Balance Sheet: The company recently eliminated all debt from their balance sheet except for a $1.6M capital equipment lease. When a company eliminates debt, and in the FUV case, $5.6 million of debt and liabilities has been extinguished from the Company’s balance sheet, they also eliminate the costs of carrying that debt. We always like the balance sheets with zero long term debt.
Share structure: FUV only has 24.49M shares outstanding and 13.94M shares in the public float. The company just announced a capital raise proposal to sell 1.7 million shares to institutional investors. If the sale comes to fruition it will increase the outstanding shares by 7% to 26.2M shares. This is great news for the company as it needs to finance the ramp-up in production. The impact on the outstanding share count is negligible and there will not be an interest expense to negatively impact the bottom line. We feel that the common stock sale (at $5.00 per share) may be preferential to adding costly long-term debt.
HyreCar collaboration: The deal with HyreCar gives FUV a solid potential for increased vehicle sales and a possible secondary revenue stream. HyreCar is a company that connects vehicle owners with folks that want a short-term rental, through their website. FUV vehicles could be rented for short term delivery service or for ride sharing. While motorcycle sales constitute 3% of vehicle sales, they only account for .06% of miles driven which means they sit idle a lot of the time. Consumers may be more inclined to purchase an EV from Arcimoto if they knew it could also generate a revenue stream for them.
Insider ownership: This is one of the characteristics we look hard at in any company, sometimes more importantly than their financial metrics. The rate of insider ownership at FUV is 43.63% and that is a large position. Investors tend to look toward management favorably when shareholder value is a key goal of the company. When the insiders at a company hold such a large position as 43.63% their dedication to shareholder value is tacit.
The move toward electric vehicles will continue at a rapid pace. The global Electric Vehicle Market Size was estimated at $162.34 Billion in 2019 and is expected to reach $802.81 Billion by 2027, at a CAGR of 22.6 percent. We know that 3% of all registered vehicles are motorcycles but we don’t know how much that 3% could grow if the motorcycles were electric and had a body. Regardless, 3% of $802.81 B is still $24 billion.
FUV is at the forefront of this change in transportation. FUV is ready to exploit the market and reap the benefits. We believe the current market cap of $133M may experience significant growth.
We will have more on this one soon,
The Traders News Group
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