Stocks I Would BUY July-August 2018. Financial & Technology Innovation. Fascinating Business Models
Hi everybody I'm Sam and this is aunty versal and you're watching the. July, 2018. Edition. Of the stocks of my series, and, in today's. Video I want to talk about two. Companies. That are super interesting, to me and, I'm running very, very far away from the big you know cap, companies. From the very very well-known companies. Even. From the standard, companies, and standard kind of business, and business plan, and vision, while. This is true I want to say that I don't look at them as some super, super risky ones obviously, there is risk as with every. Investment and probably, a more risky than you know investing. In, sa. P 500, index fund but, I think they're very interesting and, their you know their business. Plan. I think is very interesting so the first one I want to talk about is. Social, capital hello. Sophia Holdings. Corp with, ticket. Stock market. Symbol. Of IPO, a, so. What. What is this company and what is doing well, it's a blank cheque, company, and, here, I have pulled out the. Investopedia. Explanation. Of what blank cheque companies, and, I'll just read it a blank, cheque company, is a development. Stage company, that has no established. Business. Plan or. Has. The intent. To merge or acquire, another. Firm, or business. Entity, black. Blank chain companies, are speculative, in nature and, are bound by Securities. And Exchange Commission rule. Whatever. To protect investors, now. What, is this you know it sounds quite sketchy, so what IPO, a is, it's, a SP AC spec. Is a type, of black chain company is a special-purpose. Acquisition. Company which. Is formed to raise funds via an initial, public offering or IPO to. Finance a merger, or acquisition within. A certain time frame typically. 24, months the money's held, escrow. And to a combination, transaction. Closes, if, no acquisition, is made after 24, months the SPAC is, dissolved, in frontal return the Spackman just, normally, hold 20%, equity with, the balance, going to subsidiaries, of, the IPO, so. What IP o a is. Again, their, company. Which once. The IPO. And here, I want to show you basically. They want their IPO, back in September. 2017. And, they raised around six hundred million dollars, and, what, they do is they put these six, hundred million dollars, into an escrow account within. A bank and they cannot touch, them, until. They. Have found. A, good, company, they ought to invest, in right, so. What they do is with this six hundred million from what I remember they, need to spend at least 60% of, them to, acquire, or, merge, with. A private. Company, okay, and by, merging or acquiring, this private company the, new company, will, be, public. So, what they are is basically, for private, companies it's a way to file, IPO, much. Cheaper, money in much easier, and for, investors, is to invest, into a private, company and what, is more interesting is, that you. Yourself, don't have to go and you know search, for private company right but, by buying shares into. This blank, checks back company, is, like you having. Specialist. Investor. Who, will invest and. Buy, the, company, for, you right, and you trust they will do the, best, decision, obviously the, risk is, in if, they, will make the right decision but, obviously that is why you, expect, the you, know blank check company, to, be launched. By very, good investors, and people who really understand, where, they want to invest in and if. In, 24, months the black. Chain company has not, found. The company which it was to acquire or merge with the front that were investing, them are returned to the shareholders. Which means that if, you buy on the IPO, let's. Say five shares which caused hundred, dollars and in two years they don't make an investment, they, returned to you disk and with dollars, obviously, in the meantime you can trade, a stock which, means that if you buy it higher let's say you, buy the five shares four hundred and five dollars, at the, end you receive hundred. Dollars right but, if you buy them on the IPO, price or slightly, below the IPO, price you, have guaranteed that, you get your money back if they don't invest, in anything if they do invest in anything then you'll be invested into the new merge or acquired company, which is why I look, at it is not so, much risky, from the point of all you're losing your money right the, risk is if you.
Know The management, of the blockchain company, is competent, enough, to invest. Into a company, that you know now it's private, and small obviously they have the, six hundred million right but one day could be billion, big billion, dollars cap, company, with, the expertise, in money they can provide, so, the CEO of the IPO, a. Company. Is, jamaat, poly ha PT a-- sorry. If i don't pronounce the name correctly. That's, why I'm, talking, about this because I think he's a very very competent, and good guy he's not just competent in he's very smart and very good, in investing, you. Know and just, finding. A very, good business models, early, on right, and, especially, compared, to tech so obviously, you probably invest in taken I'll play you a video. Where he can explain what is his thinking, with IPO, a and where he wants to bring it but, he is a former, a Facebook, executive he, got very early, into Facebook, in the first, days and he saw the potential, there he was also very early, on Bitcoin, I think he invested, in Bitcoin back in 2014. Or something like this probably, made a killing on it and then, he at the moment he is a CEO of social capital which is a separate, investment. Company. Which, he, invests, with and what, he explains how play the view as a set is that during, these, you, know a few, years in. With, social capital, he, looked to find the best model, obviously. Using. A lot of software. And computing. And the good process. To in order to find the best you, know smoke companies, before. They become big I, said the first step is, building. The capability. Of creating, a lot of these disruptive, technologies. Or. Identifying. Them or being around them and to. Me that was, probably going to take the first 15, years of, this 50-year, plan just to be able to identify them just, to get good at it to become repeatable, at it you know it's like it's. Like anything else right it's like if you take professional, sports like the people that are the best are the ones that practice, at it and divorce. The result from, the practice, the first goal was, be. Good at one thing which is to identify and. Incubated, nurture, disruptive. Technologies, what I would say is actually you, know I gave myself a 15 year target and I think that in the first seven years we've, come to a place where I have high confidence that we know how to do that and, so now in many ways the, next chapter starts and in, Chapter, two does that mean you did it in twice the time you expect it in half the time yeah I thought. It would be like a 15 year thing and I think you know by year, seven I, think we have a good handle on how to do that part of the business and, so.
In Many ways now chapter two is started and in Chapter two what. It's about is now, being, able to take those technologies, and apply them constructively, to. Change markets, for the better it sounds like you're saying you you've isolated the. Genetic, code the DNA for disruption, in. A, sense and is, that what gave you and correct correct me where I'm oversimplifying and, is that what gave you the confidence to. Take, social capital, public, in essence, and say okay. We can we can now do, this at scale. For lots of different types of companies yeah in many, ways yes I mean like look a lot of this frankly is a rehash, of the things that we did at Facebook and what. My team and I did there as it's. Very simplest. Essence, was. Collect. Lots of data. We. Were able to invalidate, a, lot of lore. Anecdote, and replace it with fact-based, decision, making whenever. We invest in a company or we have an idea about starting a company, we. Try to implement tools. And systems that allow us to understand, what's really happening on the ground meaning the, actual atomic, level, data that the business is generating while, it's trying to do whatever it's trying to do that's what he says that now he believes, that he kind of find the model, he. Figured. Out how he can find these companies and, the social capital by the way he, has just. Ridiculous, written he he. Beats the stock market, think twice. Or something like this if the stock market returned, like 20 percent 25 percent last, year I think social capital, had return of 50 percent or something like this which is just huge, right, so, he, thinks that he found this model, and now he wants, to apply it to true IPO, a in, order to get a private, company public. In that his vision he wants to give. Power, to the smaller companies, and bring, them kind into the light right and give them resources so, they can expand, and there could be a more, competitiveness. Into, the market he has brought from, what, I know from what he said very, competent, team around IPO, a so, all of them are are basically looking into different companies, and thinking what to invest in as I, said the IPO, was us, Tembo 2017. That's, around 10 months that they still, haven't chosen a company, this is the definitely, company I would invest in because if. They don't make a choice I get my money back right obviously, for a year they just, stayed there without making a return but then kind, of get them back but, then you know I like these guys so much electrum add so much I think he's very smart go and look for his videos I think he could make very good choice and you know being part of this and being able to know, him, to invest for me might, be a very very interesting opportunity, the, second company I want to talk about is SBI.
Holdings, Basically. It's a financial company but, most. Of all they're doing is, connected. To cryptocurrencies. And, now everybody, will be like oh you, know triggered. By the cryptocurrency worldwide. But, just think about it, here, is a little, article. That says, that alphabet. Or you know Google's parent is the second, largest, investor. Into cryptocurrency, we. All know that the cryptocurrency, technology. Is very. Useful it's amazing, some, say it's the second best thing after the internet some say that it's the new internet in it's actually will be bigger, than internet but, kinda everybody, even the haters, agreed. The underlying, pork, chain technology to be more accurate is, here, to stay and is gonna make a lot of a lot, of changes, in how we perceive technology. And the world around us so, Google, is the second, biggest, investor. Into blockchain, do you know who is the first one it, is SBI. Holdings. And. This is Japanese, company, which. Is why there isn't as much you. Know information, and data in, you, know American. And European, media. About it but, you, know I just see a very very big opportunity, first, of all obviously if, you know the, less inventor, of Bitcoin. And a big part of the blockchain. Technology. Has come out of Japan which is Toshi, Nakamoto, who is my Japanese, so just operating, in Japan right but, the day, is that in Japan they are very open, to blockchain. And to cryptocurrency, and, you. Know they see the opportunity. There right they're the biggest investor, into blockchain, and here. We can see that they. Have invested, in eight blockchain. Startups, which, include, kraken, which is one of the biggest exchanges. In the world and we, Poe and I've done you, know different. Video, about repo. And I. Like. It a lot which you can see in the top, right of your screen or in just my technology playlist. But. The, years that they, own around, I believe 10.5%. Of. Repo, which. Is obviously, repo, has I think now, around hundred, partners.
With Different, financial institutions, and they, will you know obviously, keep expanding, that so the repo opportunity, itself is huge, right with, ripples. Can implicitly, doll so own around, ten point five. Scent of the, xlp, talking the triple ohms right, which, is about six. Billion. Six, billion accepted, tokens, besides, that as I said they are in, eight, other, blockchain. Companies. Also, they're just now, opening. Up their own cryptocurrency. Exchange. Which, is supposed, to be the biggest cryptocurrency. Exchange, in we world wide. So, this is just huge, and I want to say why it's huge because first, of all they, have a lot of experience, in financial services day before the whole cryptocurrency. Thing, and so on their financial, services, system, they have their own, financial. Services, in Japan and that's why they have a very big a belief around twenty, four million. User, accounts. Into base business, creation which, is even without the cryptocurrency think, they have a very stable, business, model and much experience, in what they are doing now the opening, day exchange which means that from, the startup they can you know take, very, much users, and they have the experience to. Make it work good and why is this big I just want to open an article from Bloomberg, about the biggest cryptocurrency, exchange, that is in the moment it's called balance and, actually, it's founded last year, ok so this a company, that, is founded, last year, and its. CEO, said, that they expect around. 500. Million, to 1 billion, in. Earnings, not. Revenue, in earnings. Net profit, in. 2018. Alone, this, is just huge this was opened, last year by this guy chunk, bangs ow, you, know this great job to this guy he made the initial coin offering, and he opened, it and now it has 10 million users from what he says so what if a company that already has a very, big user, base 24. Million accounts. For their financial services, and they, have a lot of experience, the hell a lot of backing what. Did they open an exchange, right so what could happen there and this is what happens with SBI, right they have by the way backing, by salt bank which is you know the biggest investor. In take in the world oh this is good but most of those companies don't, make actually, earnings, or, look. At this company, these numbers by the way in Japan. Yen, but, you, know you can get kind of get the idea so this is when, from last year this year they start investing, into, cryptocurrency. Which obviously, everything. Is into baby stage right this is long-term, investment. Which in the future could be just enormous, right but, you can still, see, the growth that they experiencing. Okay and, you know this viability, disease, asset so I want to look at how, much net, tangible, assets, they, have so this is all the assets, they have all the money they have without, all the liabilities. And anything, they have to pay okay, so if they decided to pay everything, today and you know start clean I won't see how much money they have and this is. 246. Million. But, this is in thousand, so it's actually billion. When I transfer. This from Japanese, yen into United States dollars, this, is two, billion and two hundred twenty, seven, million.
Dollars. They, have okay in this, computer moment, has a market, cap of five, billion, so, two billion two hundred twenty, seven. Million, net. Tangible, assets, five. Billion evaluation. In investment. In eight book. Chain startups. With crackin, which is one of the biggest, exchanges. In the world which surely, followed that a lot I'm not sure how much in repo. Which I'm, super excited about, right, so just, think about it if we include, the investments. And you know the opportunity, these companies like, they giving you money to buy just trailing p/e of 13, point 39 so it's a profitable, company right. They don't have a fault P because Yahoo Finance doesn't have the, data because as I said it's a Japanese, company so I guess it's a bit harder to get the data for this but, they also have a dividend, right so you know all, the growths, you, know opportunities. Are not now but they also have a dividend, right they have. 3.7. Percent. Which is high right so, you know it's higher than, scp-500. Its head and coca-cola McDonald's. And all of these guys right it, has a high-yield, dividend. High-yielding. Give them it, has, Wolpe. Huge. Amount of, stockholders. Equity and. The tangible assets, and it, has just enormous. Growth opportunities. And here I want to read, two comments, from the conversation, page when your finance I do want to emphasize that although the unlocked value in, repo, is is, huge for SBI that, the company is worth more than just a play on repo which is what I trying to emphasize right this, bi is the largest investor, in blockchain, solutions, in the world they are working with most of the top financial services, companies, in Japan and, across Asia to speed up and improve security. For, credit card processing, they also are, invested, in several crypto, currency exchanges, and now they are making their own one right they, make a large amount of their profits on financial. Services where there are big player in individual. And business, lending, which, is what I was talking about that they already have, a business right there already a profitable, company the, in financial. Services lending. Business individual. And they also have biotech, positions, which they're currently considering, IPO. On the, nasdaq SBI, holdings, I'm just very excited obviously. You know cryptocurrency. Regulation. There, is a lot of unknowns, there it could potentially go. Down in part but the thing is they. Have the exchanges, they're not in tune with how much Bitcoin, costs, or something like this right this, second exchange they make money by people, going there buying, and selling okay, it is a market, so, as long as they're with volumes, you know they make money that's the first thing the, second thing is they, are invested, into broke chain started. Which are trying to solve real problems and. Have, real business, models, which, are founded, on the blockchain the same way that you, know once upon a time right there, were companies that founded, their business models on the. Internet, now, these these, are founded, on the book chain and a lot of them might type the university, ate the biggest, investment. Work chain some, my diamond, might die but, 102, might, become the Amazon, the Google of you, know of the future this company not very well known out of Japan I guess but, I see huge.
Opportunity. There thank, you for listening. You know you can listen to most of my videos on. Google. Spotify. ITunes, but. Stitcher, whenever. You want to listen it you can listen it and also, make sure to subscribe for, my channel look, around my neck, so education. Of you use my technology we use now, everything, is for you I put it out there comment. On what you're thinking, do you like is responsible to be invested, in you, know anything, you like to, make conversation around, also, considering, checking, out my patreon page which is on patreon.com, slash. In TV so and they, can you know support, the channel so I can create, more thank. You for listening and see you next time.