Chapter 444 |
I arranged to meet someone at the company.
His name is Allen Eberhardt. He is the CEO of Nikola.
The history of Nikola is synonymous with the history of electric cars. When traditional car manufacturers were passive about electric vehicles, Nikola created and introduced the highly efficient electric car Model P to the market, which attracted the interest of investors.
Having successfully targeted the high-end market with a high-tech product, Nikola used the funds it earned to expand its factories and launched the Model TM in the $30,000 range, officially opening the electric car market.
At this point, CarOS emerged as a competitor. Until then, investors and experts predicted that it would be difficult for CarOS to beat Nikola.
However, the situation changed with the development of the OTK battery. The OTK battery significantly improved the capacity and charging speed of existing NCM batteries, completely changing the paradigm of electric cars.
GM and Ford joined the CarOS camp, but Nikola still insisted on surviving on its own.
This was because its flagship models were already tailored to existing batteries, and it was procuring its own batteries through the Gigaplant, a joint venture with Technics.
Moreover, as it happened, the Gigaplant had hedged on cobalt to ensure a stable supply of raw materials. They had signed a contract to purchase a certain quantity of cobalt at a fixed price for the next five years, regardless of price fluctuations.
Thanks to this, other battery manufacturers were able to secure price competitiveness, but the Gigaplant had to bear the loss. It was like having to keep buying something for $100 when its price had dropped to $30.
When CarOS launched the AD3 and AD4 equipped with OTK batteries, Nikola's sales plummeted, and its stock price went downhill.
After listening to my story, Taekgyu looked at me and said.
"So in the end, 90 percent of it is your fault."
I shook my head.
"No. Big One delivered the final blow."
The timing of Big One coincided with the period when Nikola was increasing the production of the Model TM, which could be called its cash cow.
Due to Big One, the Model TM factory in California had to suspend operations due to damage to its production lines, and the adjacent Gigaplant in Nevada was also partially damaged.
IT companies can resume work as long as their servers and personnel are safe, but for manufacturing, there is no answer when the factory stops.
In the end, both Nikola and the Gigaplant went bankrupt. Nikola is currently in a workout, and its trading on the Nasdaq has been suspended.
According to media reports, my relationship with Allen Eberhardt is known to be poor. To be precise, I was just minding my own business, but he was the one who kept picking fights.
When CarOS launched its electric car, he mocked that it would go bankrupt and become a pile of scrap metal within three years, and when the OTK battery was first released, he cursed that a series of explosion accidents would soon follow. And when I said that we should prepare for Big One, he spewed profanities at me, calling me a son of a bitch and a crazy bastard.
But to think that the day would come when we would meet in person.
Taekgyu crossed his arms and said.
"Hmm, it feels like meeting a malicious commenter who has been persistently posting hate comments."
Hearing that, it seemed so.
"He looks so gentlemanly."
"Malicious commenters always look normal when you see them in person. The guy who always posts hate comments on Hayoung's webtoon is probably a diligent office worker."
"How do you know that? Have you met him?"
"No, well..."
"Are you the malicious commenter?"
Taekgyu shouted back.
"What are you talking about? Is there anyone who uses the internet as cleanly as I do?"
"..."
The strong denial makes him even more suspicious.
***
I shook hands with the white man who came to the company.
"You've had a long journey. I'm Kang Jin-hoo."
"Nice to meet you. I'm Allen Eberhardt."
"Hello. I'm Oh Taekgyu."
He was tall with sharp features.
He looks like an American, but he was actually born in South Africa, and later studied in the United States and became an American citizen after starting a business.
It is one of America's strengths to accept anyone with ability as an American, regardless of their nationality. Satya Shamalan, the CEO of Microsoft, was also originally Indian but acquired American citizenship.
He is only in his mid-to-late 40s. It's hard to believe that he grew such companies at such a young age.
He foresaw the coming of the electric car era and founded Nikola, and he founded SolarLand thinking that solar power was a suitable way to charge electric cars. And he realized the potential of space exploration and founded the private space company SpaceZ.
He has also founded and sold several other companies.
It would have been difficult for an ordinary person to do even one of these things. Looking at this, it seems that there are indeed geniuses in the world.
Unlike the harsh words he spewed in media interviews, he was a gentleman in person.
"What brings you here?"
He sat down and said nonchalantly.
"I was curious about who made Nikola go bankrupt. I suddenly wanted to see their face."
Hearing him say this, he seems like an eccentric.
What if I hadn't invested, and there was no CarOS, and no OTK battery?
Would Nikola still be doing well?
Nikola's market capitalization, which once surpassed GM's, has shrunk to $5 billion after the workout. This is a drop of more than 90 percent from its peak.
A car company has a large number of employees and many related partner companies, so when it goes bankrupt, it has a huge impact on the overall economy. Therefore, it is necessary to save it rather than letting it go bankrupt if possible.
Nikola's brand value and the know-how it has accumulated over the years cannot be ignored. In addition to electric cars, it also has a charging system called the Hypercharger installed all over the world.
Being able to acquire this for a mere $5 billion seems very good, but there is one problem.
That is the debt of over $10 billion.
The reason Nikola was able to continue investing despite huge annual deficits was thanks to the issuance of bonds and new shares. They have been issuing corporate bonds at a rate of 5-7 percent, which is more than twice as high as US Treasury bonds.
The reason for this high interest rate is that the issuance volume was very large and Nikola's financial situation was not very good. Although there was some risk, the growth trend continued, so it was popular with bond investors who liked high returns.
If they had known it would go bankrupt like this, no one would have bought them.
There are already $2 billion in bonds that have matured and have not been repaid, and every month, another $200 million in matured bonds are coming due.
A corporate acquisition also includes the debt. Acquiring Nikola means taking on the responsibility of repaying the bonds that Nikola has issued.
If you acquire a company with a lot of debt, you could go down with it. That's why even GM and Ford had to express reluctance.
But in this situation, one company raised its hand.
"Zhou Motors expressed its intention to acquire, right?"
He nodded his head.
"I know they don't have that much money after all the mergers and acquisitions and paying compensation to CarOS, so I don't know where they're getting the money to acquire it."
Taekgyu nodded his head for no reason.
"Anyone would misunderstand and think that the Chinese government is providing the funds."
Well... if you ask them, they'll say no.
Of course, concerns about technology leakage arose, and the US Department of Commerce did not approve the merger. Zhou Motors probably just threw it out there for fun, knowing it wouldn't work.
At this, the creditors fiercely resisted.
From the creditors' point of view, if the company goes bankrupt, they won't get a penny back, so who cares if the technology is leaked or not?
In the end, the ball was in CarOS's court. The US government subtly hinted that it would be good if CarOS acquired it. Since CarOS is doing the best in the car market, it seems like they are passing the buck.
Daryl Segan carefully reviewed this issue.
From CarOS's point of view, Nikola is not absolutely necessary. But it cannot be left to a Chinese company. They also have to be mindful of the government.
The acquisition cost is a problem, but fortunately, the bond price has plummeted.
In the bond market, a rating of BB+ or lower is usually treated as a junk bond, but Nikola's bonds have fallen to the bottom CC rating.
The reason it has not fallen to a D rating despite being in default is because there is a glimmer of hope that it may be repaid if it is acquired. However, it is already trading at 40 percent of its issue price, let alone the interest.
If they negotiate with the creditors and readjust the bond price and interest rate, they could significantly lower the cost.
Well, these are problems for them to solve on their own.
"What will you do after you sell Nikola?"
Allen Eberhardt said confidently.
"I will devote myself to SpaceZ. Space is a huge market that cannot be compared to cars."
Taekgyu showed curiosity.
"Oh! Space exploration?"
The company he had worked so hard to build was on the verge of being sold off after going bankrupt. An ordinary person would have been frustrated, but he looked rather relieved.
Well, it's just that his success stories are well known, but in fact, he has also failed in more than one or two businesses. Perhaps the reason he is a genius is that he overcomes such failures and continues to challenge himself.
Could I do that?
As I was thinking that, Taekgyu muttered with a serious expression for no reason.
"Could it be that the space century is finally beginning?"
"..."
No. Even if there is space exploration, the space century will not begin.
When you think of space, the first thing that comes to mind is, of course, NASA (National Aeronautics and Space Administration). As a direct agency of the president, it can be called a leader in space exploration.
However, space exploration is not a business that generates immediate profits, despite the enormous amount of money that goes into it. It might have been different during the Cold War when there was an arms race and a battle of pride with the Soviet Union, but now, from the government's point of view, it's nothing more than a money pit.
In fact, since the 1980s, NASA's budget has been shrinking year by year, and a large number of talented people have also left.
Forced to go on a diet due to a lack of budget, NASA decided to focus only on its original tasks of research and exploration, and transferred other tasks such as space cargo transportation and satellite launches to private companies.
This is where Allen Eberhardt stepped in.
He founded the private space company SpaceZ and won contracts from NASA for tasks such as cargo transportation to the ISS (International Space Station), and received technology transfers.
Unlike a state-run agency that operates on government taxes, a private company that operates on investment prioritizes profitability.
Allen Eberhardt came up with a groundbreaking idea to reduce costs.
A spaceship separates its first-stage rocket when it is about to leave the atmosphere and ignites its second-stage rocket. At this time, the separated first-stage rocket falls to the ground and shatters into pieces.
If this first-stage rocket can be recovered and reused, the launch cost can be reduced by 80 percent. In other words, the cost can be reduced to one-fifth of the original cost!
It may seem like a huge idea, but in fact, it's not that others haven't thought of it.
Anyone can have an idea. It's just difficult to make it a reality. Would other people not have made smartphones or electric cars because they couldn't think of them?
This plan, too, was easy to say but went through a great deal of trial and error before it succeeded, and there were many skeptical views.
However, after several experiments, SpaceZ succeeded in recovering the first-stage rocket by re-propelling it and landing it on the ground after it separated in the atmosphere.
This was tantamount to opening a new chapter in space exploration.
If the cost becomes cheaper, the number of launches will increase, and if the number of launches increases, the price will become even cheaper due to economies of scale.
Perhaps thanks to this technological advancement, the United States, Russia, and China are once again putting a lot of effort into space technology development.
If a full-fledged space era opens in the future, what will happen to SpaceZ?
"I heard you are getting married."
"Yes."
"It's better not to get married. Living alone is the best."
"..."
He's saying something really nice to someone who is getting married. For reference, he has been divorced twice. Why are there so many divorced people?
"Anyway, congratulations. I'll give you a wedding gift."
He held out two tickets with the SpaceZ logo on them.
"What's this?"
"It's a ticket for space travel."
Taekgyu asked in surprise.
"Wow! Was this really happening?"
"Of course. It starts next year."
Even though it's called space travel, you don't go very far. You go up to low Earth orbit in a capsule and then come back to Earth soon after.
They are actually selling tickets, and despite the price of $300,000, they are reportedly already fully booked. It is said that world-renowned wealthy people and famous Hollywood actors have applied.
When you can have such an experience, is money a problem? It's hard to believe that such an era has come.
When the media raised concerns about safety, he personally boarded the capsule and went to space.
"How was it? Did it really look like a pale blue dot?"
He chuckled.
"That's what Professor Carl Segan said."
In 1990, Voyager 1, which had traveled far into space, sent a picture to NASA. It was a picture of a faint blue dot against a completely black background. That was Earth.
"Perhaps because I saw it up close, it didn't look like that. It's better for you to see it for yourself than for me to tell you. I'll give you the tickets, but you have to make a reservation in advance."
One of these tickets is $300,000, so two would be a whopping $600,000. It's a huge amount to give away for free, but it would be good publicity if I rode it.
It looks like I'm really going to have a honeymoon in space.
Taekgyu's eyes sparkled as he asked.
"Do you have one for me?"
Then Eberhardt said bluntly.
"Buy one. You have a lot of money."