Discover more from Due Diligence
Box office receipts + Bloom Energy, a stock to know.
A quick fix of the latest financial happenings.
Good morning, investors!
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Without further ado…
One Interesting Read: the Hollywood Stock Exchange
I deceived you recently (sort of). A few weeks ago, I shared the backstory of agriculture’s lone exception to what’s considered a commodity: onions.
Well, onions aren’t the only exception.
If you’re ever casually perusing the Commodity Exchange Act, you’ll find another exception right next to everyone’s favorite multi-layered vegetable: motion picture box office receipts.
Exactly what you were expecting, right? Had it not been for two of the most disastrous events in this country’s history, we may have been able to speculate on the success and failure of movies.
Enjoy Shaun Raviv’s rendition of this story, Box Office Bomb: The Short Life of Popcorn Prediction Markets.
Two Things to Know About Bloom Energy
Renewable energy is a “hot” topic these days. Coincidentally, Bloom Energy’s electrolyzers use high temperatures to convert renewable fuel sources into clean hydrogen — at a record-setting efficiency. That’s fun fact #1.
“Our pilot demonstration at the US Department of Energy's Idaho National Laboratory is performing at a greater electrical efficiency than any other commercial product or technology demonstration in the world that we know of…The performance of the Bloom electrolyzer is over 30% better than most commercial low-temperature electrolyzers in operation today. And we are just getting started.” — K.R. Sridhar, CEO of Bloom Energy
“Just getting started” is right. Bloom’s revenue growth projections are jaw-dropping — the company anticipates a CAGR between 30% and 35% over the next decade.
Of course, forecasts are rarely spot on. Only time will tell if these starry-eyed figures are feasible. That said, the company has a critical player in its corner in the near term: public policy.
Fun fact #2: the Inflation Reduction Act includes $370 billion in subsidies and credits to catalyze investment in US clean energy. CEO K.R. Sridhar highlighted nine provisions that should have a materially positive impact on Bloom’s business:
One, the hydrogen production credit and a direct pay option for it will greatly accelerate our domestic electrolyzer business.
Two, the greater availability of clean hydrogen will create greater demand for Bloom’s, always on high-efficiency hydrogen-powered energy servers.
Three, our growing waste to energy segment will get a big lift from the expanded ITC for biogas equipment.
Four, the incentive for electric vehicles and their growth will drive demand for our efficient on-site power charging solution.
Five, the tax credits for controllers, switchgear, and batteries will drive microgrid adoption.
Six, the lowering of capture thresholds and the increased credit makes carbon capture with our energy servers very attractive.
Seven, the capital equipment in our expanding American factories are eligible for the manufacturing Tax credit.
Eight, the increase and the extension of the ITC for our energy servers will strengthen our domestic power business.
Nine, the direct pay and transferability features will create greater supply of affordable financing for our US projects.
Three Eye-Opening Tweets
And finally, we close with three eye-opening tweets.
When to buy, when to sell, according to Phil Fisher.
Unicorns, your digital protectors.
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