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Well goodnight subscribers and welcome in hope you guys are all doing great out there today we’re going to talk about neo stock we got a comment yesterday on a video in regards to neo stock someone wanted to know about neo stock got quite a few likes and this is a stock we probably haven’t talked you know super in-depth on in quite some time this is a stock
That’s now in the $3.00 range i believe that last time we talked super in depth about neo stock was when they went ipo i did a video a day they would i p oh about his neo stock a scam the tussle of china and man i got a lot of hate on that video a lot of people did not like what i had to say in regards to neo stock i was obviously very negative on that stock at
That particular time and since that time neo stock has been an absolute disaster it was like eleven dollars when i did that video and here today it’s about a three dollar in 61 cent stock and keep in mind it’s only been like i don’t know eight months or nine months or so since neo went public so it hasn’t been that much time and the stock’s down like seventy plus
Percent in a very short amount of time okay so the stocks been a disaster but the question is is a stock worth buying now so i want to kind of give the like an updated look at neo when they were in public this company almost had no revenues almost you know their business was almost just like an idea of a business whereas now this company actually has deliveries
Of vehicles actually doing some pretty decent numbers so i want to go ahead and take a look at those so hope you guys enjoy this video make sure you hit that thumbs up button so let’s start getting to this guy’s now first off neo just reported earnings like literally yesterday okay so neo had adjusted per share loss of 36 cents but that was better than the 47 cent
Loss they were expected okay so they did better as far as but they still lost money at the end the day revenue came in at 243 million which was also higher than expected so there’s companies doing decent revenue volumes now 243 this past quarter like that’s pretty decent now keep in mind like literally this time last year company pretty much had no revenue so it’s
A big change for the company their management said yes eight deliveries total just under four thousand had exceeded the company’s expectations even in the face of electric vehicle subsidy reductions slowing macroeconomic conditions increased competition and several factors related to the chinese new year holiday over it pointed to a challenging environment going
Forward so this company they haven’t ramped like in a massive way obviously they totaled you know just under four thousand vehicles they delivered in that quarter so just over a thousand vehicles a quarter or excuse me a thousand vehicles a month obviously they’re getting out there you know a thousand maybe two thousand they can get up to so the company’s still
In very very small scale they haven’t ramped in any major weight as of right now but the numbers are progressing okay as far as their commentary they said looking ahead to the second quarter we expected even more challenging sales environment and anticipate overall sequential demand and deliveries to decrease that means quarter-over-quarter there as competition
Continues to accelerate in the general automobile market in china remains muted the cfo said against this backdrop meal is focused on rolling out or es6 nationwide at the same time improving overall network utilization in operating efficiencies now if you don’t know they like the vehicles this company has in the market they only really have one vehicle in the market
As of right now and those es eight which is an suv i should be showing you here here’s another picture of it this is the interior and it’s a pretty decent looking vehicle and my personal opinion inside and out and these vehicles are very competitively priced so they’re not like you know super high in there and there are more expensive than probably the average car
But it’s not like they’re they’re super high price or something like that it’s like it’s it’s affordable for some of the you know maybe let’s say the top ten to fifteen percent of chinese citizens not like the top one to two percent for instance okay and then they’re also coming out with the ef six which is another all-electric suv but it so looks a little smaller
Roofline looks a little smaller but it does look pretty similar honestly to the es 8 so we’ll have to see you know how those shake out and how those do in the market and you know does one steel sales from there are things like that okay so those are the that’s the product they have in the market right now the es 8 es six is coming so they’re they’re starting to
Ramp in some way but once again via you know a car maker that’s not making a lot of cars as of right now right now here’s the really good thing about this for a neo right passenger vehicle sales in china this past year we’re 23 24 million that’s pretty much where they’re at consistently needless to say that chinese automobile market is a massive one okay much
Bigger than anywhere else in the world you know 23 24 million vehicles sold this past year like those are incredible incredible numbers so meaning you know a company like neo that’s super niche that just delivered four thousand vehicles in the last quarter so a little over a thousand vehicles a month they’re doing like imagine what they could potentially do
Someday down the road imagine if they just got a one percent market share of the chinese automobile market i mean imagine how big the company would be or imagine if they got two percent or five percent like you know it would be incredible right because the market is just so massive in china all right now that’s a positive there are a few negatives obviously the
Us-china trade war is heating up in much more of a substantial way that’s starting to get worse rather than better so obviously that is something that could potentially hurt the chinese economy even more meaning less and less people buying new cars and that hurts new car sales in in the end but in my personal opinion since neil is so niche even if the economy
Slows in china it really doesn’t matter because let’s say you chinese economy slows quite a bit more and let’s say you know there’s only 20 million good passenger vehicles sold in china next year if you’re neil what does that really matter if 20 million or 25 million the market is so big and you’re so niche it matters much more if you’re one of those automobile
Manufacturers that’s making millions a year right now and those numbers get a lot weaker but when you’re just the little guy coming into the big market like like you know the growth is ahead of you like does it doesn’t matter what’s going on in the economy as long as you’re producing a product that everybody wants and you’re super niche like you can grab tons and
Tons of market share over time okay now the other bad thing for this company is the tesla giga factory in shanghai is being built at a very very rapid pace and that one should open at some point in 2019 probably the fall time maybe we could be looking at anywhere from october opening maybe a december opening i’m probably showing you another you know view of it
Here this is from jason yang’s youtube channel here he does a lot of great drone videos on the construction how fast that is going so needless to say like like tesla’s gonna finally be a big competitor in the chinese market as of right now tess has been is super super nice obviously because the mere fact that there’s so many import duties and obviously shipping
The card from fremont california to china there’s so much that goes into it that makes a tesla extremely extremely expensive in china like our test was already a pretty expensive vehicle when it comes to model s and model x right even if you live in the states now imagine if you live in china how much more like those vehicles can be anywhere between 20% and 40%
More expensive in china than somebody in the states is buying it and keep in mind obviously you know the amount of money made for an average chinese citizen is nowhere you know comparable to a us citizen so needless to say it’s you know the the competitive environment is going to get a lot more even for tests over in china so we’ll have to see how that plays out
It’s obviously a negative for neo because maybe tesla could take some sales away from china i’m not so convinced that chinese citizens even with this trade we’re going on are gonna you know say we don’t want to buy a tussle because american you know car manufacturer out there i think actually the chinese citizens are very supportive of elon musk in what tesla’s
Doing there so the only universe they see how it all shakes out but once again neo is so neat that does it even matter really much for them you know if tesla comes into the market all right no neo once again we talked about this stocks it’s a three dollar stock now three dollars and 61 cents to be exact so even my one-year-old and four-year-old could afford to buy
These chairs okay market cap on this company is 3.7 billion dollars at this point in time so teeny teeny tiny market cap especially from where this company went public which they went public i think it was like 11 or 12 billion dollar market cap maybe even up to 14 billion at some point so it was obviously you know a much bigger market cap company at that time now
You’re getting a buy for under four billion bets that’s you know much more realistic for where this companies at this particular time now the hope is they can grow into like a tesla over time obviously tesla even after tesla’s massive drop its had this year which tesla stock in 2019 has been an absolute disaster right even with the disaster that has been tough so
Stock price this year the market cap on tests was still around 33 34 billion so imagine yeah neo could grow into like just where it tussles at today you know something that’s like a 30 billion 35 billion market cap okay imagine that never mind we’re tell us lee goes in the future if neo could just get to the stage where tess is out today obviously you can make
Like a 10x on your money or 9x on your money or something like that that would be insane right and that’s kind of what you have to be like going for if you’re investing in neo stock because obviously there’s a big risk in the stock the fact that they lose money consistently they’re probably continued lose money for quite a while in the future and the fact that
They’re just starting to you know try to ramp for the first time right now sometimes betting on the small dog pays off and sometimes it doesn’t snapchat for instance this stock goes public $24 back in 2017 so it’s been public for now a couple years now and today the stocks eleven dollar stock so it’s down 50-plus percent since basically though you know the day
It went ipo and that’s after still two years so you’re still you know you could be waiting a long time to even break even on snapchat you know if you ever break even on snapchat so that’s obviously an example of betting on the small company that obviously hasn’t worked out doesn’t mean it won’t work out the future but they’re so far from even like trying to break
Even if you bought that stock in the ipo at $24 okay no another example of a company this wasn’t you know went public a long long long time ago okay and he’s been a public company for a long time but if you just look at amd this was a stock in 2016 early 2016 late 2015 it was a $2.00 stock okay so if you had pretty good insight an amd at that time and you know you
Thought it was pretty realistic they could come back and make this into a successful company obviously you were out massive amounts of money like that stock is like you know 14 x there 15 x or whatever since that time that’s unbelievable so there’s certain times a if you bet on one of these small companies you can absolutely knock it on the out of the ballpark and
Turn $10,000 into $100,000 in a few years time or something like that but sometimes it doesn’t work out okay so there are kind of like three tiers i look at when i’m looking at a stock and i’m thinking like this is a speculative stock okay there’s what i call a spec stock is what i call a super spec stock and then there’s what i call a straight gamble speculative
Stock let’s start with that straight gamble speculative stock that’s basically a dream of a company okay so neil went public it was basically like this idea of what we could create a neo like i almost had non-existent revenues in in the past a non-existing deliveries of their vehicles and they were taking massive losses so if you were buying neo stock on the ipo
You were buying into a company that was a straight gamble speculative stocks like a huge gamble like basically like a powerball ticket you buy a powerball ticket or a mega millions ticket right you pretty much almost guaranteed to lose that money right to all of you putting it on you’re almost guaranteed to lose but it’s possible like one in 300 million that you
Could hit and make a ton of money right that’s a straight gamble speculative stock next one up is a super spec stalker call which is a small company with no profits that’s where it would put neo right now right now it’s a small company they have no profits in or expect to be profitable any time soon so if you’re investing in the stock it’s a you know a super
Speculative company and the next year up is a speculative company which is in my opinion a big company with no profit so like always you know yeah you guys know my tesla videos i’ve done a million of those in the past i was called tesla for instance a speculative company it’s a really big company that’s doing some really big volumes now but they still do lose money
And so therefore they are speculative company okay so here’s how we kind of think about neo okay so if you bought into the stock at ipo you were you were doing basically a straight gamble speculative play all right once again the stock went ipo somewhere around eleven twelve dollars it’s three dollars today neo today in my opinion is a super spec play once again small
Company no profits there in a few years this company has an actual legit chance of getting to that place where they’re actually a speculative company meaning essentially that this company is is is you know a big company doing let’s say ten billion dollars in revenue 15 billion dollars 20 billion dollars but maybe they’re still losing money at that particular time
Or maybe they’re just making a slight profits which means this company’s as far as this market cap in valuation could grow substantially so in my personal opinion if i look at neo stock here it has gotten a tremendous amount more interesting here today than any time in the past because they are starting to ramp and the valuation you have to pay for this company
Is substantially less however there is a big risk with the stock and kind of like if you’re trying to buy into something that’s a spec stock you know depending on how speculative it is is the less money you want to put in on so if you’re doing a straight gamble ipo like that needs to be you know very very small amount of money you do with something like neo it
Still probably needs to be a small amount of money and then if you’re doing something that’s just an overall spec company which is a big company that takes losses and that could be a little bit bigger of an investment but still not like one of your main investments or something like that so if i look at neo stock it is very interesting at these particular levels
There the chances of bankruptcy are possible i’m not fully convinced that another big you know a chinese tech company wouldn’t pull in and you know loan them money or something like that or maybe even the chinese government backed them because they want neo to succeed long term in the electric vehicle market so you have a many different factors that play much more
Interesting am i going to go buy neo stock tomorrow probably not but i will say i’m a lot closer to buy any of stock today than i was when that’s not company went ipo and i was extremely extremely negative so i’ve had a lot of change of heart around neo in you know the recent months since it’s a $3 tuck now with a 3.7 billion dollar market cap instead of 11 or 12
Billion like it was guys so anyway i want to hear your opinion you know stock do you think it’s an interesting spec play do you think it’s still not there you want to buy this stock if it goes down $2 would you not buy the stock no matter what i would love to hear from you guys in that comment section as always make sure to smash the thumbs up button if you enjoyed
Today’s video thank you for watching have a great day
Transcribed from video
Is Nio $3 Stock A Buy Now? Tesla Of China? By Financial Education
