Nomi Prins is out with a new stock teaser..
This time she claims "Amazon is running on empty" and will soon face a fuel crisis.
However she believes there's a "tiny firm saving Amazon."
She believes this company, which can be purchased for $1, will help Amazon avoid any fuel issues in the future.
The problem is Nomi wants thousands of dollars for the stock ticker.
The good news is she left enough clues in the presentation to figure out the company name.
I reveal it below along with a bunch of other information so you can determine if it's worth purchasing.
Let's get started!
The Tiny Firm Saving Amazon Summary
Creator: Nomi Prins
Newsletter: Rogue Strategic Trader
Stock: Buying warrants of Lion Electric
The company being pitched by Nomi is Lion Electric which makes electric vehicles.
Amazon has been buying delivery trucks from them.
This presentation was originally put out by Dave Forest of Casey Research, which I covered before. It now seems Nomi has taken over the presentation (the same company owns Nomi's publishers and Dave's publisher).
The idea here isn't to buy stocks, though, and instead by warrants.
Warrants act like options and give an investor a chance to buy a stock at a certain price in the future.
You're not obligated to buy the stock but you do pay a price per warrant.
The warrant price keeps dropping which isn't good for people that have already bought.
When Dave first recommended the warrant price was $2 and now it's $0.38. Meaning inventors have lost 80% of their investment.
Nomi started recommending them at $0.70 and it's lost nearly 50% of value since then.
Honestly buying the stock instead of warrant seems like a better play (although the stock is down 80% in the last year).
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Figuring Out "The Tiny Firm Saving Amazon"
Nomi Prins is one of the more famous stock pickers right now.
Her previous stock presentations like the #1 Stock For America's Great Distortion and $4 energy stock were very popular this year.
Now she's out claiming to know a company that's going to save Amazon from a fuel crisis.
Actually this is a year old presentations from Dave Forrest that's been rebranded with Nomi Prins.
So figuring out the stock will be easy.
Let's breakdown the presentation and look for some clues now!
Amazon's Big Problem
Like all good salesman Nomi identifies a problem that needs to be solved.
She claims Amazon is facing a "disaster" that's "beating down their door."
Additionally she claims this problem caused Amazon to lose "$66 billion to this threat alone."
So what's this big threat?
Fuel prices!
According to Nomi fuel cost Amazon $66 billion in the first quarter alone:
This is not only being felt by Amazon but it's being felt by customers too.
Rising gas prices means it costs more to ship products - and that means Amazon has to raise their prices.
Amazon's Private Deals (And How To Profit From Them)
At this point in the presentation Nomi begins to drop hints about her investment idea.
She begins talking about private deals that Amazon makes with other companies:
However, you can't typically make money off the private deals.
But sometimes a company Amazon is doing business with goes turns public.
That's the jist of this presentation.
You're going to buy into a company that does deals with Amazon that recently went public.
A Snow Covered Manufacturing Plant
Again, like all good salesman Nomi starts mentioning the solution to the problem she brought up.
Nomi claims the solution to Amazon's big problem lies with a snow covered manufacturing plant:
Nomi claims a product is being made in this plant that's going to save Amazon.
At this point Nomi begins laying it on pretty thick..
She tells the story of a regular working class man designing an electric vehicle "that will save humanity."
But the idea is these electric trucks are more simple than others being developed.
She claims other EV companies went too heavy into smart technology which is bad during a chip shortage.
The mystery company avoided most of that and Amazon has already been purchasing from them:
Nomi claims other EV companies are having a hard time actually making EV transport trucks whereas this one is rolling them off the assembly line.
As a result maintenance costs have dropped 60%.
According to Nomi Amazon has already committed $1.1 billion to this company for new trucks.
Additionally, this mystery company does business with Transdev Canada which is the second largest transport operator of its kind in the world.
And while other EV companies are laying people off this one is hiring more people and just built a "900,000 square foot manufacturing facility in the Midwest."
Ok that's enough clues to figure out the company!
Nomi Is Talking About Lion Electric
Like I said I covered this presentation a year ago and all the clues are the same from that one.
The company Nomi is teasing is Lion Electric.
Here's an article detailing the $1.1 billion dollar deal they have with Amazon and here's an article showing their new 900,000 square foot facility in Illinois.
Keep in mind Amazon doesn't actually have to pay $1.1 billion.. they have the right to buy that won't be happening any time soon if it does.
So that's the end right?
No.
Nomi is recommending a special kind of investment besides just buying their stock.
Nomi Wants You To Buy Warrants In Lion Electric
The catch to this entire presentation is that Nomi isn't recommending you buy Lion Electric stock.
She recommends you buying warrants in this company.
A warrant is basically the same thing as a call option.
You're paying to get the chance to buy Lion Electric for $11.50 in the next couple years.
And each warrant costs you a certain amount of money.
You're basically gambling that the price of the stock will go over $11.50 which would mean you get the stocks at a discount.
Is this a smart idea?
We'll answer that in the next section.
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Is Investing In Lion Electric A Good Idea?
At this point you're probably wondering if you should invest in Lion Electric.
I think these next points should help you decide:
Amazon Has No Obligation To Pay $1.1 Billion
Stock pickers are a lot like politicians - you can pretty much guarantee they're going to lie to you or at least only tell you half truths.
Amazon has no obligation to spend $1.1 billion on Lion Electric despite what Nomi says.
Amazon got a special deal where they have an option to buy up 500 truckers per year through 2025.
Additionally, they can buy 10% of Lion's manufacturing capacity 5 years after 2025.
After that they can take over 15% of the company through their own warrant deal.
So far they've only vested 3% of this.
Amazon's Warrants Are Different Than Yours
Amazon also has a different set of warrants than you'd be able to get.
This is because they're actually buying products and having a relationship with Amazon brings a bunch of benefits.
Your warrants are an option to buy Lion Electric at $11.50 in 3.5 years.
The problem is the warrants have been falling in price drastically.
When I first covered this presentation the warrant price was $2.
When Nomi released this presentation months ago the warrant price was around $0.70.
Now the warrant price is under $0.40.
However, Lion Electric can redeem the warrants when the stock hits $18 for 20 days in a 30 day period.
So if you bought warrants when Nomi first started recommending them you could get 1000% returns if the stock hits $20.
That's about the max you can get.
But the share price and warrant price just keep dropping.
And if the share price doesn't hit $11.50 you lose the cost of the warrants.
Right now warrants are $0.40 so each warrant would cost that.
If you bought $5000 worth of warrants you'd lose that if the stock only goes to $10.
So buying the stock at its current price of around $2 will probably be smarter:
Unless of course you truly think the stock is going to $20.
Lion Electric Still Has A Way To Go
There's still a lot of uncertainty about what Lion Electric can do and how much the can manufacture.
Remember Amazon just has the option to buy 500 trucks per year from Lion Electric.
They're not getting that right now.
Lion Electric still has to open up its new plant and produce more vehicles.
Additionally, Amazon has over 80,000 trucks and vans to deliver good.
500 trucks a year really isn't going to change too much at Amazon.
They have deals with other EV companies but still.. it's going to be a looooong time before their fleet is mostly electric.
So the idea that Lion Electric, with its potential 500 trucks a year, will save Amazon isn't true.
Lastly, Lion Electric has fallen short of their projected earnings.
A few years ago they were projected to bring in $1.7 billion in earnings in 2023 and that has now been revised to around $397 million
They're currently at breakeven with their products now too.
This means they aren't profiting off of the production of their products but they're not losing money either.
In order to get profitable they'd have to lower cost of production which they're hoping to do with their new plant.. which still isn't finished yet.
So lots of unanswered questions.
The stock price is much more reasonable now at around $2 then it was last year at $10, though.
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Is Nomi Prins Reliable?
The whole point of this presentation is to get you to buy Nomi's product Rogue Trader.
This is a premium service that she offers that costs thousands of dollars a year.
I've covered Nomi a lot in the past.
She launched her flagship newsletter The Distortion Report last year and it's very popular.
However, I wouldn't recommend buying her services.
Every time I look at an investment she recommends it's lost a lot of money.
For example, her big stock pick of 2022 was Chargepoint.
However, since recommending it the stock has crashed about 50% in less than a year.
She had another big stock pick called ESS Tech about 5 months ago.
This is another stock that's crashed about 50% in a short period of time.
Her portfolio at The Distortion Report is full of losers too.
It's definitely lost a lot of people money in the last year.
So I'd stay away from anything that Nomi is selling at the moment.
Conclusion
Alright so that's the end of my write up of the "tiny firm saving Amazon."
Like all stock pickers Nomi is loose with the facts in this presentation.
Remember her main goal is to get you to buy her services, not give you a stock pick.
She's especially manipulative in this presentation and states straight up falsehoods about the deal between Amazon and Lion Electric.
In the end warrants in this company come with a lot of risk.
The stock has struggles and Lion Electric has come close to reaching its projected earnings.
Unless something changes the stock price won't go up too much, making warrants a bad idea.
If you must invest the stock is definitely the more attractive option.
However, like I said.. lot of risk involved.
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