Edit 1: More ARKQ buying today (~50k shares). Thank you everyone for the positive feedback and discussion!
Bottom Line Up Front (BLUF) or TL;DR for the non-military types:
LMT is a good target if you want to literally go to the moon, and my PT is $690.26 in two years (more than 2x from current levels). Justification and some possible trade ideas are listed below, just CTRL-F “Trade Ideas”. I hope you guys enjoy this work and would appreciate any discussion or feedback. I hope to catch you in the comments.
Team,
We interrupt today’s regularly scheduled short squeeze coverage to discuss a traditionally boring stock, LMT (Lockheed Martin), with significant upside potential. To be clear, this is NOT a short squeeze target like many reddit posts are keying on. I hope that this piece sparks discussion, but if you are just looking for short squeeze content, all I have to say is BUY, HOLD, and GODSPEED.
The source of inspiration for me writing this piece is threefold; first, retail investors are winning, and I believe that we will continue to win if we continue to identify opportunities in the market. In my view, the stock market has always been a place for the public to shine a light on areas of innovation that real Americans are excited about and proud to be a part of. Online communities have stolen the loudspeaker from hedge fund managers and returned it to decentralized online democracies that quickly and proudly shift their weight behind ideas they believe in. In GME’s case, it was a blatant smear campaign to destroy a struggling business. I think that we should continue this campaign by identifying opportunities in the market and running with them. It may sound overly idealistic, but if reddit can take on the hedge funds, I non-ironically believe that we can quite literally take good companies researching space technology to the moon. I think LMT may be one of several stocks to help get us there.
Second, a video where the Secretary of State of Massachusetts argues that internet boards are full of a bunch of unsophisticated, thoughtless traders really ticked me off. This piece is designed to show that ‘the little guy’ is ready to get into the weeds, understand business plans, and outpace analysts that think companies like Tesla are overvalued by comparing them to Toyota. That is a big reason that I settled on an old, large, slow growth company to do a deep-dive on, and try my best to show some of the abysmal predictive analysis major ‘research firms’ do on even some of the most heavily covered stocks. LMT is making moves, and the suits on wall street are 10 steps behind. At the time of writing this piece, Analyst Estimates range from 330-460 (what an insane range).
Third, and most importantly, I am in the US military, and I think that it is fun to go deep into the financials of the defense sector. I think that it helps me understand the long-term growth plans of the DoD, and I think that I attack these deep-dives with a perspective that a lot of these finance-from-day-one cats do not understand. Even if no one ever looks at this work, I think that taking the time to write pieces like this makes me a better Soldier, and I will continue to do it in my spare time when I am feeling inspired. I wrote a piece on Raytheon Technologies (Ticker: RTX) 6 months ago, and I think it was well-received. I was most convicted about RTX in the defense sector, but I have since shifted to believing LMT is the leader in the defense space. I am long both, though. If this inspires anyone else to do similar research on other companies, or sparks discussion in the community, that is just a bonus. Special shout-out to the folks that read more than just the TL;DR, but if you do just read the TL;DR, I love you too!
Now let us get into it:
Leadership
I generally like to invest in companies that are led by people that seem to have integrity. Jim Taiclet took the reins at LMT in June of last year. While on active duty, he served as a C-141B Starlifter pilot (a retired LMT Aircraft). After getting out he went to work for the American Tower Corporation (Ticker: AMT). His first day at American Tower was September 10, 2001. The following day, AMT lost 13 employees in the World Trade Center attack. He stayed with the company, despite it being decimated by market uncertainty in the wake of 9/11. He was appointed CEO of the very same company in 2004. Over a 16 year tenure as CEO of AMT the company market cap 20x’d. He left his position as CEO of AMT in March of last year, and the stock stagnated since his departure, currently trading at roughly the same market cap as to when he left.
Jim Taiclet was also appointed to be the chairman of the board this week, replacing the previous CEO. Why is it relevant that the CEO came from a massive telecommunications company?
Rightfully, Taiclet’s focus for LMT is bringing military technology into the modern era. He wants LMT to be a first mover in the military 5G space, military application of AI space, the… space space, and the hypersonic glide vehicle (HGV) space. These areas are revolutionary for the boomer defense sector. We will discuss this in more detail later when we cover the company’s P/E multiple and why it is absolute nonsense.
It is not a surprise to me that they brought Taiclet on during the pandemic. He led AMT through adversity before, and LMT’s positioning during the pandemic is tremendous relative to the rest of the sector, thanks in large part to some strong strategic moves and good investments by current and past leadership. I think that Taiclet is the right CEO for the job.
In addition to the new CEO, the new Secretary of Defense, Secretary Lloyd Austin, has strong ties to the defense sector. He was formerly a board member for RTX. He is absolutely above reproach, and a true leader of character, but I bring this up not to suggest that he will inappropriately serve in the best interest of defense contractors, but to suggest that he speaks the language of these companies effectively. I do not anticipate that the current administration poses as significant of a risk to the defense sector as many analysts seem to believe. This will be expanded in the headwinds section below.
SPACE
Cathie Wood and the ARK Invest team brought a lot of attention to the space sector when the ARKX, The ARK Space Exploration ETF, Form N-1A was officially filed through the SEC. More recently, ARK Invest published their Big Ideas 2021 Annual Report and dedicated an entire 7-page chapter to Orbital Aerospace, a new disruptive innovation platform that the ARK Team is investigating. This may have helped energize wall street to re-look their portfolios and their investments in space technology, but it was certainly not the first catalyst that pushed the defense industry in the direction of winning the new space race.
In June 2018, then President Trump announced at the annual National Space Council that “it is not enough to merely have an American presence in space, we must have American dominance in space. So important. Therefore, I am hereby directing the Department of Defense (DoD) and Pentagon to immediately begin the process necessary to establish a Space Force as the sixth branch of the Armed Forces". Historically, Department of Defense space assets were under the control of the Air Force. By creating a separate branch of service for the United States Space Force (USSF), the DoD would allocate a Chairman of Space Operations on the Joint Chiefs of Staff and clearly define the budget for space operations dedicated directly to the USSF. At present, this budget is funneled from the USAF’s budget. The process was formalized in December of 2019, and the DoD has appropriated ~$15B to the USSF in their first full year of existence according to the FY21 budget.
Among the 77 spacecraft that are controlled by the USSF, 29 of them are Lockheed Martin GPS satellites, 6 of them are Lockheed Martin Space-Based Infrared Systems (SBIRS), and LMT had a hand in creating and/or manufacturing for several of the other USSF efforts. The Next Generation Overhead Persistent Infrared Missile Warning Satellites (also known as Next-Gen OPIR) were contracted out to both Northrup Grumman (Ticker: NOC) and LMT. LMT’s contract is currently set at $4.9B, NOC’s contract is set at $2.37B.
Tangentially related to the discussion of space is the discussion of hypersonic glide vehicles (HGVs). HGVs have exoatmospheric and atmospheric implications, but I think that their technology is extremely important to driving margins down for both space exploration and terrestrial point-to-point travel. LMT is leading the charge for military HGV research. They hold contracts with the Navy, Air Force, and Army to develop HGVs and hypersonic precision fires. The priority for HGV technology accelerated significantly when Russia launched their Avangard HGV in December of 2019. Improving the technology for HGVs is a critical next-step in maintaining US hegemony, but also maintaining leadership in both terrestrial and exoatmospheric travel.
LARGE SCALE COMBAT OPERATIONS (LSCO)
The DoD transitioning to Large-Scale Combat Operations (LSCO) as the military’s strategic focus. This is a move away from an emphasis on Counter-Insurgency operations. LSCO requires effective multi-domain operations (MDO), which means effective and integrated strategies regarding land, sea, air, space, and cyberspace. To have effective MDO, the DoD is seeking systems that both expand capabilities against peer threats and increase the ability to track enemy units and communicate internally. This requires a modernizing military strategy that relies heavily on air, missile, and sensor modernization. Put simply, the DoD has decided to start preparing for peer or near-peer adversaries (China, Russia, Iran, North Korea) rather than insurgencies. For this reason, I believe that increased Chinese and Russian tensions are, unfortunate as it may be, a boon to the defense industry. This is particularly true in the missiles/fires and space industry, as peer-to-peer conflicts are won by leveraging technological advantages.
There are too many projects to cover in detail, but some important military technologies that LMT is focusing on to support LSCO include directed energy weapons (lasers) to address enemy drone technology, machine learning / artificial intelligence (most applications fall under LMT’s classified budget, but it is easy to imagine the applications of AI in a military context), and 5G to increase battlefield connectivity. These projects are all nested within the DoD’s LSCO strategy, and position LMT as the leader in emergent military tech. NOC is the other major contractor making a heavy push in the modernization direction, but winners win, and I think a better CEO, balance sheet, and larger market cap make LMT the clear winner for aiding the DoD in a transition toward LSCO.
SECTOR COMPARISON (BACKLOG)
The discussion of LSCO transitions well into the discussion of defense contractor backlogs. Massive defense contracts are not filled overnight, so examining order backlogs is a relatively reliable way to gauge the interest of the DoD in a defense contractor’s existing or emerging products. For my sector comparison, I am using the top 6 holdings of the iShares U.S. Aerospace & Defense ETF (Ticker: ITA). I hate this ETF, and ETFs like it (DFEN) because of their massively outsized exposure to aerospace, and undersized allocation to companies like LMT. LMT is only 18% smaller than Boeing (Ticker: BA) but is only 30.4% of the exposure of BA (18.46% of the fund is BA, only 5.62% of the fund is LMT). Funds of this category are just BA / RTX hacks. I suggest building your own pie on a site like M1 Finance (although they are implicated in the trade restriction BS… please be advised of that… hoping other brokerages that are above board will offer similar UIs like the pie design… just wanted to be clear there) if you are interested in the defense sector.
The top 6 holdings of ITA are:
Boeing Company (Ticker: BA, MKT CAP $110B) at 18.46%
Raytheon Technologies (Ticker: RTX, MKT CAP $101B) at 17.84%
Lockheed Martin (Ticker: LMT, MKT CAP $90B) at 5.62%
General Dynamics Corporation (Ticker: GD, MKT CAP $42B) 4.78%
Teledyne Technologies Incorporated (Ticker: TDY, MKT CAP $13B) at 4.74%
Northrop Grumman Corporation (Ticker: NOC, MKT CAP $48B) at 4.64%
As a brief aside, please look at the breakdowns of ETFs before buying them. The fact that ITA has more exposure to TDY than NOC and L3Harris is wild. Make sector ETFs balanced how you want them to be balanced and it will be more engaging, and you will likely outperform. I digress.
Backlogs for defense companies can easily be pulled from their quarterly reports. Here are the current backlogs in the same order as before, followed by a percentage of their backlog to their current market cap. All numbers are pulled from January earning reports unless otherwise noted with an * because they are still pending.
Boeing Company backlog (Commercial: $282B, Defense: $61B, Foreign Military Sales (FMS, categorized by BA as ‘Global’): 21B, Total Backlog 364B): BA’s backlog to market cap is a ratio of 3.32, which is strong, but most of that backlog comes from the commercial, not the defense side. Airlines have been getting decimated, I am personally not interested in having much of my backlog exposed to commercial pressures when trying to invest in a defense play. Without commercial exposure, their defense only backlog ratio is .748. This is extremely low. I understand that this does not do BA justice, but I am keying in on defense exposure, and I am left thoroughly unsatisfied by that ratio. Also, we have seen several canceled contracts already on the commercial side.
Raytheon Technologies backlog (Defense backlog for all 4 subdivisions: 67.3B): Raytheon only published a defense backlog in this quarter’s report. That is further evidence to me that the commercial aerospace side of the house is getting hammered. They have a relatively week backlog to market cap as well, putting them at a ratio of .664, worse off than the BA defense backlog.
Lockheed Martin backlog (Total Backlog: $147B): This backlog blows our first two defense backlogs out of the water with a current market cap to backlog ratio of 1.63.
General Dynamics Corporation backlog (Total Backlog: $89.5B, $11.6B is primarily business jets, but it is difficult to determine how much of their aerospace business is commercial): Solid 2.13 ratio, still great 1.85 if you do not consider their aerospace business. The curveball here for me is that GD published a consolidated operating profit of $4.1B including commercial aerospace, whereas LMT published a consolidated operating profit of $9.1B. This makes the LMT ratio of profit/market cap slightly in favor of LMT without accounting for the GD commercial aerospace exposure. This research surprised me; I may like GD more than I originally assumed I would. Still prefer LMT.
Teledyne Technologies Incorporated backlog (Found in the earnings transcript, $1.7B): This stock is not quite in the same league as the other major contractors. This is an odd curveball that a lot of the defense ETFs seem to have too much exposure to. They have a weak backlog, but they are a smaller growing company. I am not interested in this at all. It has a backlog ratio of .129.
Northrop Grumman Corporation backlog ($81B): Strong numbers here. I see NOC and LMT as the two front-runners in the defense sector. I like LMT more because I like their exposure to AI, 5G, and HGVs more than NOC, but I think this is a great alternative to LMT if you like the defense sector. Has a ratio of 1.69, slightly edging out LMT on this metric. LMT edges out NOC on margins by ~.9%, though, which has significant implications when considering the depth of the LMT backlog.
The winners here are LMT, GD, and NOC. BA is attractive if you think anyone will have enough money to buy new planes. BA and RTX are both getting hammered by commercial aerospace exposure right now and are much more positioned as recovery plays. That said, LMT and NOC both make money now, and will regardless of the impact of the pandemic. LMT is growing at a slightly faster rate than NOC. Both are profit machines, but I like LMT’s product portfolio and leadership a lot more.
FREE CASH FLOW
Despite the pandemic, LMT had the free cash flow to be able to pay a $2.60 per share dividend. This maintains their ~3% yearly dividend rate. They had a free cash flow of $6.4B. They spent $3.9 of that in share repurchases and dividend payouts. That leaves 40% of that cash to continue to strengthen one of the most stalwart balance sheets outside of big tech on the street. Having this free cash flow allowed them to purchase Aerojet Rocketdyne for $4.4B in December. They seem flexible and willing to expand and take advantage of their relative position during the pandemic. This is a stock that has little downside risk and significant upside potential. It is always reassuring to me to know that at the end of the day, a company is using its profit to continue to grow.
HEADWINDS
New Administration – This is more of an unknown than a headwind. The Obama Administration was not light on military spending, and the newly appointed SecDef is unlikely to shy away from modernizing the force. Military defense budgets may get lost in the political shuffle, but nothing right now suggests that defense budgets are on the chopping block.
Macroeconomic pressure – The markets are tumultuous in the wake of GME. Hedgies are shaking in their boots, and scared money weighed on markets the past week. If scared money continues to exert pressure on the broader equity markets, all boomer stocks are likely weighed down by slumping markets.
Non-meme Status – The stocks that are impervious to macroeconomic pressures in the above paragraph are the stonks that we, the people, have decided to support. From GME to IPOE, there is a slew of stonks that are watching and laughing from the green zone as the broader markets slip deeper into the red zone. Unless sentiment about LMT changes, I see no evidence that LMT will remain unaffected by a broader economic downturn (despite showing growth YoY during a pandemic).
TAILWINDS
Aerojet Rocketdyne to the Moon – Cathie Wood opened up a $39mil position in LMT a few weeks ago, and this was near the announcement of ARKX. The big ideas 2021 article focuses heavily on satellite technology, deep learning, and HGVs. I think that the AR acquisition suggests that vertical integration is a priority for LMT. They even fielded a question in their earnings call about whether they were concerned about being perceived as a monopoly. Their answer was spot on—the USFG and DoD have a vested interest in the success of defense companies. Why would they discourage a defense contractor from vertical integration to optimize margins?
International Tensions – SolarWinds has escalated US-Russia tensions. President Biden wants to look tough on China. LSCO is a DoD-wide priority.
5G.Mil – We still do not have a lot of fidelity on what this looks like, but the military would benefit in a lot of ways if we had world-wide access to the rapid transfer of encrypted data. Many units still rely on Vietnam-era technology signal technology with abysmal data rates. There are a lot of implications if the code can be cracked to win a DoD 5G contract.
TRADE IDEAS
Price Target: LMT is currently at a P/E of ~14. Verizon has roughly the same. LMT’s 5-year P/E ratio average is ~17. NOC is currently at a P/E of ~20. TSLA has a P/E Ratio of 1339 (disappointingly not 1337). P/E is a useless metric because no one seems to care about it. My point is that LMT makes a lot of money, and other companies that are valued at much higher multiples do not make any money at all. LMT’s P/E ratio is that of a boomer stock that has no growth potential. LMT’s P/E is exactly in line with the Aerospace and Defense Industry P/E ratio standard. LMT’s new CEO is pushing the industry in a new direction. I will arbitrarily choose a P/E ratio of 30, because it is half of the software industry average, and it is a nice round number. Plus, stock values are speculative and nonsense anyway.
Share price today: $321.82
Share price based on LMT average 5-year P/E: $384.08 (I see this as a short term PT, reversion to the mean)
Share price with a P/E of 30: $690.26
Buy and Hold: Simple. Doesn’t take much thought. Come back in a year or two and be happy with your tendies (and a few dividends to boot).
LEAPS Call Debit Spread (Based on last trade prices): Buy $375 C 20 JAN 23 for $26.5, Sell $450 C 20 JAN 23 for $12. Total Cost $14.5 for a spread width of $75. Max gain 517% per spread. Higher risk strategy.
LEAPS: Buy $500 C 20 JAN 23 for $7.20. Very high-risk strat. If the price target is hit within two years, these would be in the money $183 per contract for a gain of 2500%. This is the casino strat.
SOURCES
https://www.lockheedmartin.com/en-us/news/features/2020/james-taiclet-from-military-pilot-to-successful-ceo.html
https://www.warren.senate.gov/newsroom/press-releases/in-response-to-senator-warrens-questions-secretary-of-defense-nominee-general-lloyd-austin-commits-to-recusing-himself-from-raytheon-decisions-for-four-years
https://news.lockheedmartin.com/2019-08-30-Lockheed-Martins-Expertise-in-Hypersonic-Flight-Wins-New-Army-Work
https://www.lockheedmartin.com/en-us/capabilities/hypersonics.html
https://research.ark-invest.com/hubfs/1_Download_Files_ARK-Invest/White_Papers/ARK%E2%80%93Invest_BigIdeas_2021.pdf?hsCtaTracking=4e1a031b-7ed7-4fb2-929c-072267eda5fc%7Cee55057a-bc7b-441e-8b96-452ec1efe34c
https://www.deseret.com/2018/6/19/20647309/twitter-reacts-to-trump-s-call-for-a-space-force
https://comptroller.defense.gov/Portals/45/Documents/defbudget/fy2021/fy2021_Budget_Request_Overview_Book.pdf
https://www.airforcemag.com/lockheed-receives-up-to-4-9-billion-for-next-gen-opir-satellites/
https://spacenews.com/northrop-grumman-gets-2-3-billion-space-force-contract-to-develop-missile-warning-satellites/
https://www.lockheedmartin.com/en-us/capabilities/directed-energy/laser-weapon-systems.html
https://emerj.com/ai-sector-overviews/lockheed-martins-ai-applications-for-the-military/
https://www.defenseone.com/business/2020/07/new-ceo-wants-lockheed-become-5g-playe167072/
https://www.wsj.com/articles/defense-firms-expect-higher-spending-11548783988
https://www.etf.com/ITA#efficiency
https://s2.q4cdn.com/661678649/files/doc_financials/2020/q4/4Q20-Presentation.pdf
https://investors.rtx.com/static-files/dfd94ff7-4cca-4540-bc4b-4e3ba92fc646
https://investors.lockheedmartin.com/static-files/64e5aa03-9023-423a-8908-2aae8c7015ac
https://s22.q4cdn.com/891946778/files/doc_financials/2020/q4/GD_4Q20_Earnings_Highlights-Outlook-Final.pdf
https://www.fool.com/earnings/call-transcripts/2021/01/27/teledyne-technologies-inc-tdy-q4-2020-earnings-cal/
https://investor.northropgrumman.com/static-files/6e6e117f-f656-4c68-ba7f-3dc53c2dd13a

Positions: $RSI 30 03/19 30C
Proof: https://imgur.com/a/swCCMjz
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*This post is for informational purposes only, you should not construe any such information or other material as investment, financial, or other advice.*
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TLDR: Rush Street Interactive ($RSI) is the #1 nationwide online casino company and the #3 or #4 sports book depending on the state. Short selling, unwarranted institutional wariness of share dilution and the general market focus on sports book instead of online casino has left $RSI grossly undervalued. A massive blow out at Q4 earnings will result in analyst upgrades and a rapid repricing by market makers and institutions seeking exposure to the emerging sector.
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**Overview**
"Sports book is really just kind of a warm up in a lot of ways for an online casino where the real money is made" - Niccolo De Masi, CEO dMY technologies
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Rush Street Interactive ($RSI) operates the BetRivers.com online casino and sports book. They are now fully licensed and operating in New Jersey, Pennsylvania, Michigan, Illinois, Indiana, Colorado, Iowa, and Virginia. They own and operate a casino in New York and already have a New York license making them well positioned for liberalization there. They merged with a dMY Technology Group SPAC on Dec. 31st 2020 with 240 million on the balance sheet to spend on growth.
The online casino business is fundamentally more profitable than sports betting because the average value of a casino player is estimated at $600 while a sports book player could be as little as $20. Estimates put the online casino market at DOUBLE the size of the online sports book market and the online casino industry is really just getting started as more states liberalize.
$RSI is expert at new market entry; they have been first to market in Pennsylvania, Illinois, Indiana, and Colorado and even when they aren't first they are capable of capturing market share in competitive markets such as New Jersey. They also have products which women play which accounts for at least half of the market in online casino. The female market is one that the pure sports book plays miss out on.
Also for some fucking reason they operate a casino and sports book in Colombia (rushbet.co) and may make large expansions into other parts of south America as legalization continues. This means they have the expertise necessary for global expansion in the future although the states remains their primary focus and growth driver.
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**The Financials and Strategy**
Unlike other companies in the space Rush Street is already profitable in 2020 and has a strong focus on Return On Invested Capital (ROIC). Q3 gross revenue was $71.9 Million. Q4 revenue is going to be a blow out. Combing through state gambling revenue data and breaking that down by market share my estimate is that Q4 revenue could be as high as $120 Million.
Paired with this blow out will be a **guidance raise to $500 Million for 2021**, which is 2/3 of DraftKings 2021 guidance of $750M.
https://imgur.com/a/xkfcayC
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What is striking when compared to $DKNG is that their advertising spend was only a quarter of revenue in Q3 while $DKNG spent 155% of their revenue. This will change as they begin to focus on growth, but it shows they are very good at getting return on ad spend. This company should actually be valued close to $DKNG based on growth potential once guidance is raised.
https://imgur.com/a/RQQXtGg
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Their focus on attracting **female gamers** is also important to their long term growth potential. The sports book plays with cross sells to casino such as $DKNG will not be able to grow through the female demographic in the same way. **This cannot be understated** as one of the major strategic advantages of $RSI.
https://imgur.com/a/xzJj26n
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As I said before I expect their trend of rapid growth to continue for Q4 earnings, certainly going to be a blow out based on looking at state gambling revenue numbers. My estimate is that their revenue will be around 110M for Q4. I also expect guidance to be raised to 500M for 2021 due to strong performance in existing markets and the recently opened Michigan market as well as their sports book launch in Virginia.
https://imgur.com/a/ckTqHhh
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**Short sellers have entered the chat**
The short interest on $RSI sits at 5.08 M shares as of 01/14/21 representing a 30% increase. Now why would a company already valued at 2.8 Billion and with a comparative valuation of 8-10 Billion compared with $DKNG and $PENN be so heavily shorted at such a low market cap? My conclusion is that an institution with 10s of millions to throw at shorting this stock wants to take advantage of fear of share dilution from warrant calling or to establish a better entry prior to earnings.
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**Commander in GILF Cathie Wood is Bullish on the sector**
On Feb. 2nd ARK disclosed that they had purchased 620,300 shares of $DKNG. This is extremely bullish for the sector. I am highly confident that after Q4 earnings ARK will be purchasing shares in $RSI as well due its strategic advantages relative to $DKNG and exposure to the female demographic. For such a small market cap company this will be a major catalyst.
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**Institutions are bullish**
Fidelity has increased their holdings to 14% as of today: https://d18rn0p25nwr6d.cloudfront.net/CIK-0001793659/8f10b0d8-a3d2-447c-bc75-87587d0a4670.pdf
Alliance Bernstein holds a 6% position reported today: http://d18rn0p25nwr6d.cloudfront.net/CIK-0001793659/e883778d-e759-4a85-91c1-3242ed110720.pdf
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**Final notes**
Jerome "The Bus" Bettis, Steelers legend and hall of fame running back, is their brand ambassador... This company knows their target audience and how to appeal to them, likely more 'classic' ambassadors to come to attract even more boomer and Gen X degenerates. Keep in mind these are the gamblers with big money to spend, the average age of an online casino gambler is 42.
This stock has been grossly underpriced due to short selling. The terms of the SPAC deal were not unfavorable and all the insiders held their shares through the merger banking on growth in the market - **management owns 77% of the company**. This is a true value play on a well managed company in an emerging industry with a market size in the hundreds of billions. I plan to hold shares long term.
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I will post a part 2 breaking down their latest S-1 filing and Q4 revenue by state when they release their Q4 earnings date.
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Do your own research.
References:
https://www.legalsportsreport.com/sports-betting/revenue/
https://fintel.io/doc/sec-rush-street-interactive-inc-ex991-2021-january-05-18632-947
https://s26.q4cdn.com/794539746/files/doc_presentations/2020/RSI-Investor-Presentation-15-Oct-2020.pdf
https://ir.rushstreetinteractive.com/news/news-details/2020/RUSH-STREET-INTERACTIVE-ANNOUNCES-THIRD-QUARTER-2020-RESULTS-AND-RAISES-FULL-YEAR-GUIDANCE/default.aspx
https://www.youtube.com/watch?v=SQWEhWuPmzU
https://www.thestreet.com/investing/draftkings-surges-as-stake-bought-by-ark-next-generation
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Positions: $RSI 30 03/19 30C
I will be adding 3/19 25cs each week until earnings.
Exit strategy: "What's an exit strategy?" - u/deepfuckingvalue

Positions: $RSI 03/19 30C
Proof: https://imgur.com/a/swCCMjz
This post is for informational purposes only, you should not construe any such information or other material as investment, financial, or other advice.
TLDR: Rush Street Interactive ($RSI) is the #1 nationwide online casino company and the #3 or #4 sports book depending on the state. Short selling, unwarranted institutional wariness of share dilution and the general market focus on sports book instead of online casino has left $RSI grossly undervalued. A massive blow out at Q4 earnings will result in analyst upgrades and a rapid repricing by market makers and institutions seeking exposure to the emerging sector.
Overview
"Sports book is really just kind of a warm up in a lot of ways for an online casino where the real money is made" - Niccolo De Masi, CEO dMY technologies
Rush Street Interactive ($RSI) operates the BetRivers.com online casino and sports book. They are now fully licensed and operating in New Jersey, Pennsylvania, Michigan, Illinois, Indiana, Colorado, Iowa, and Virginia. They own and operate a casino in New York and already have a New York license making them well positioned for liberalization there. They merged with a dMY Technology Group SPAC on Dec. 31st 2020 with 240 million on the balance sheet to spend on growth.
The online casino business is fundamentally more profitable than sports betting because the average value of a casino player is estimated at $600 while a sports book player could be as little as $20. Estimates put the online casino market at DOUBLE the size of the online sports book market and the online casino industry is really just getting started as more states liberalize.
$RSI is expert at new market entry; they have been first to market in Pennsylvania, Illinois, Indiana, and Colorado and even when they aren't first they are capable of capturing market share in competitive markets such as New Jersey. They also have products which women play which accounts for at least half of the market in online casino. The female market is one that the pure sports book plays miss out on.
Also for some fucking reason they operate a casino and sports book in Colombia (rushbet.co) and may make large expansions into other parts of south America as legalization continues. This means they have the expertise necessary for global expansion in the future although the states remains their primary focus and growth driver.
The Financials and Strategy
Unlike other companies in the space Rush Street is already profitable in 2020 and has a strong focus on Return On Invested Capital (ROIC). Q3 gross revenue was $71.9 Million. Q4 revenue is going to be a blow out. Combing through state gambling revenue data and breaking that down by market share my estimate is that Q4 revenue could be as high as $120 Million.
Paired with this blow out will be a **guidance raise to $500 Million for 2021**, which is 2/3 of DraftKings 2021 guidance of $750M.
https://imgur.com/a/xkfcayC
What is striking when compared to $DKNG is that their advertising spend was only a quarter of revenue in Q3 while $DKNG spent 155% of their revenue. This will change as they begin to focus on growth, but it shows they are very good at getting return on ad spend. This company should actually be valued close to $DKNG based on growth potential once guidance is raised.
https://imgur.com/a/RQQXtGg
Their focus on attracting **female gamers** is also important to their long term growth potential. The sports book plays with cross sells to casino such as $DKNG will not be able to grow through the female demographic in the same way. **This cannot be understated** as one of the major strategic advantages of $RSI.
https://imgur.com/a/xzJj26n
As I said before I expect their trend of rapid growth to continue for Q4 earnings, certainly going to be a blow out based on looking at state gambling revenue numbers. My estimate is that their revenue will be around 110M for Q4. I also expect guidance to be raised to 500M for 2021 due to strong performance in existing markets and the recently opened Michigan market as well as their sports book launch in Virginia.
https://imgur.com/a/ckTqHhh
Short sellers have entered the chat
The short interest on $RSI sits at 5.08 M shares as of 01/14/21 representing a 30% increase. Now why would a company already valued at 2.8 Billion and with a comparative valuation of 8-10 Billion compared with $DKNG and $PENN be so heavily shorted at such a low market cap? My conclusion is that an institution with 10s of millions to throw at shorting this stock wants to take advantage of fear of share dilution from warrant calling or to establish a better entry prior to earnings.
Cathie Wood is Bullish on the sector
On Feb. 2nd ARK disclosed that they had purchased 620,300 shares of $DKNG. This is extremely bullish for the sector. I am highly confident that after Q4 earnings ARK will be purchasing shares in $RSI as well due its strategic advantages relative to $DKNG and exposure to the female demographic. For such a small market cap company this will be a major catalyst.
Final notes
Jerome "The Bus" Bettis, Steelers legend and hall of fame running back, is their brand ambassador... This company knows their target audience and how to appeal to them, likely more 'classic' ambassadors to come to attract even more boomer and Gen X degenerates. Keep in mind these are the gamblers with big money to spend, the average age of an online casino gambler is 42.
This stock has been grossly underpriced due to short selling. The terms of the SPAC deal were not unfavorable and all the insiders held their shares through the merger banking on growth in the market - **management owns 77% of the company**. This is a true value play on a well managed company in an emerging industry with a market size in the hundreds of billions. I plan to hold shares long term.
I will post a part 2 breaking down their latest S-1 filing and Q4 revenue by state when they release their Q4 earnings date.
Do your own research.
References:
https://www.legalsportsreport.com/sports-betting/revenue/
https://fintel.io/doc/sec-rush-street-interactive-inc-ex991-2021-january-05-18632-947
https://s26.q4cdn.com/794539746/files/doc_presentations/2020/RSI-Investor-Presentation-15-Oct-2020.pdf
https://ir.rushstreetinteractive.com/news/news-details/2020/RUSH-STREET-INTERACTIVE-ANNOUNCES-THIRD-QUARTER-2020-RESULTS-AND-RAISES-FULL-YEAR-GUIDANCE/default.aspx
https://www.youtube.com/watch?v=SQWEhWuPmzU
https://www.thestreet.com/investing/draftkings-surges-as-stake-bought-by-ark-next-generation
Positions: $RSI 03/19 30C
I will be adding 3/19 25cs each week until earnings.
Exit strategy: "What's an exit strategy?" - u/deepfuckingvalue
Forgot to add: http://d18rn0p25nwr6d.cloudfront.net/CIK-0001793659/8f10b0d8-a3d2-447c-bc75-87587d0a4670.pdf Fidelity just doubled their position to almost 15%

THANK YOU MODS FOR LETTING THIS THROUGH!
Please click HERE for the PDF version if you would like to download the dd.
(credit: research compiled by IG:@wydstockbros)
To get things started, I'm not a financial advisor, I'm not a bot, and this one goes out to you, Chamath.
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tl;dr
AMC is the global leader in a $17 billion dollar industry that’s been beaten senseless to the ground with so much room to run. After pioneering deals with streaming services, buying out their competition, and upgrading their facilities worldwide, 80% short interest is highly inappropriate for its TRUE fundamental value — $69.69 a share.
🚀🚀🚀🚀🚀🚀$AMC TO $69.69🚀🚀🚀🚀🚀🚀
🚀🚀🚀🚀🚀🚀$AMC TO THE MOON🚀🚀🚀🚀🚀🚀
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"I'm questioning whether they[WSB] are actually doing the research when it comes to things like GameStop and AMC ..." - clueless CNBC dude.
I fuckin miss movies. And when I say movies, I mean the whole damn experience. I wanna buy my $15 popcorn, pour an ungodly amount of butter and jalapenos on that shit and munch in a recliner seat watching in laser 4k quality. I like this company. I like this stock.
For the past few days, I've been scouring Google for news articles and company data. I've also been trying to find some detailed DD in here but they’ve all been pretty limp-dick when it came to AMC. And most of the news articles I've read were surface-level AT BEST with a grim outlook based on first-glance analysis. Guess these analysts are just too damn lazy to dig deep.
Because when we dive into these issues, we can easily see that the theater giant may not be in as bad a situation as the media/analysts are claiming.
In fact, I believe that AMC is absolutely misunderstood, overlooked, and undervalued.
Here is why I am more confident than ever that $AMC will not only reach $30 but is in the perfect setup to see ATHs and WELL ABOVE.

I. Ugly Start, Beautiful Setup

Chances are if you are currently holding a significant position in $AMC, then most likely you've already read up on the company and its current standing in the cinema industry. You've probably read about how the corporation has nearly $5 billion dollars worth of debt with many of its locations still closed as the pandemic remains a global issue. You may have realized that new movies haven't been coming out. But more than that, you're seeing that movies are just being released on streaming platforms anyway. You might be concerned for AMC, or even the industry as a whole.
All of these concerns are very valid and based on real uncertainty, but let's break down each of these points and see if they’re as bad as analysts claim.

II. A Discussion on Debt

Media outlets keep honing in on this debt like it’s an ugly scar of the corporation. But what we need to focus on is why that debt came to be, how the money was spent, and how this debt was a strategic play in order to cement AMC into the new era of cinema-streaming.
We can categorize the money used into four parts:

• New equipment and amenities
• Lease payments
• Maintenance costs (utilities, wages, etc.)
• Expansion (buying out the competition)

Pay close attention to the last category because this one is important. Over the past five years, AMC has been acquiring smaller theater companies like Odeon. After buying out these companies, AMC then had to suit its "new locations" with the standard luxury amenities AMC is known for. This makes for a significant bulk of their debt totaling over $3 billion in just acquisitions. This was the investment that helped solidify AMCs spot as the world's largest cinema chain.
On the topic of maintenance costs, AMC managed to raise enough money to get through 2021. With ongoing news of vaccines, we can hope their efficacy leads to a speedy reopening near mid-late 2021. But when the economy does reopen—and AMC is back at full operation—what will it look like?

III. The Future of AMC

There's an elephant here.. right in this very room. Yes, streaming and cinema have had some serious beef in the past. In fact, some cinema chains are having tensions with streaming to this day. But what has AMC done in regards to streaming? They were the first to settle deals in order to partner up and take part in streaming revenue.
Yup, you read that right. AMC is both having their cake and eating it too.
Why would motion picture companies do this? Why not just end the cinema industry? To put simply, analysts are deeply underestimating the value of the "cinema experience". Just as I mentioned in the intro, I miss the cinemas. But I am definitely not alone. But let's not talk about me and the hypothetical "people'', instead let's talk about research studies.
In a 3-year study done in Korea, researchers found that shortening the window of cinema exclusivity and releasing movies on streaming early did not have a significant effect on ticket sales. And though this is a limited study done outside of the US, remember that AMC is a global corporation and these results have a hopeful outlook for the future relationship of cinema-streaming for AMC worldwide.
"But wait, you still haven't mentioned what streaming gets out of this?"
It's not what streaming "gets out of this" but rather what these motion picture companies maintain in keeping a healthy relationship with cinemas. During the peak heat of the movie theater-streaming feud, AMC halted the showing of Trolls and vowed to never show a Universal Pictures film in its theaters again if they were to continue releasing their films on streaming platforms without a proper cinema-exclusivity window. But today, we can see that the tensions have fallen and both motion picture companies and AMC have found a way to mutually benefit each other.
Now besides streaming, AMC has been investing in luxury amenities as seen by their chairs, 4K laser projectors, MERV air filtration, and ultra-surround sound speakers. With so many locations and so many amenities, they are offering full theater rentals with high demand during the pandemic. AMC has further cultivated their century-old movie experience into modern times. And this pandemic didn’t just change their amenities.
They had to learn how to cut costs and have more efficient operations in order to survive. This only spells good news for when they emerge with better operations, more money to spend, and higher valuations. So that begs the question, how high can the company's share price go realistically?

IV. Valuation

First, let's look at the Movie Theater industry as a whole in comparison to a few other popular entertainment industries:
Movie Theater US Market Size $17.1 billion
Casinos US Market Size $15.7 billion
Amusement Parks US Market Size $14 billion
Music Label Music Production US Market Size $9.4 billion
Music Publishing US Market Size $7 billion
In the world of entertainment, cinema is a very lucrative business.
And, again, who is the largest movie theater chain in the world? Yup, AMC.
Clueless CNBC dude mentioned that we retail traders don't trade with a fundamental reason but is there a fundamental reason in shorting a $17 billion dollar industry GLOBAL leader down to its grave? Does AMC deserve to die? I surely don't think so.
Now I won't touch upon squeezes in this since I'm sure many of you folk have already read/heard enough about them, but I will leave this quick intuitive article about it. And yes, these shorts can and will be squoze once we have faith in our upper valuations and investors(we) begin buying again.
And buy again we will. As many users flee limp-dick Robinhood and join one of the real brokerages, their positions/funds will be settled and ready to trade come next week. Where do you think these angry RH refugees will be putting their investments? That's right, exactly into the positions that RH stopped them from buying last week: which includes $AMC.
If you were part of the RH user base and your plays were affected by the blatant market manipulation, it's not only "not too late", but I believe it is an opportune time to BUY.
How high can it go then? When will I know it's too late to take a position?
So when we talk about valuation, many people fear the uncertainty of a stock rising far past its current value. Well, I think Chamath Palihapitiya said it best:
"Everybody that bought that stock is also underwriting how they want to own it."
In our current price-action environment, it's not too ridiculous to see how we are forming the foundations for AMC to continue rising beyond ATHs. We are already hitting nearly $16 on the day and rallying +53% while enduring heavy trade restrictions. Who's to say that this passion cannot continue? Now I’m no expert and can’t tell you how high this can go, but I am personally eyeing $69.69 as a target.
With so many current factors at play including hype, short covers, and ITM options having to be exercised, this is actually the BEST entrance to manifest its ATH valuation and chart some never before seen territory in its price action. It's like the manifest destiny of stock valuation. In fact, we may never see this opportunity for AMC again if we don't act now and solidify its value upward.
At the end of the day, prices are what the buyers/sellers settle upon so WE can pioneer that value if we damn well please. This is what a free market is all about.
Will there be people that disagree with this?
Sure.
Will people continue to short AMC as it goes up?
Absolutely.
Do I think that AMC being shorted 80% and rising is fair?
Really? See section III.
But institutions are selling off! Like Silver Lake liquidating their 44m shares.
Yes, then the next day $AMC dipped to $7.50 and has since recovered… with AMC $600m less in debt.
We all know who is shorting AMC, and I am sick of these hedge funds who think they, alone, can decide whether or not a company is worth a damn.

V. Conclusion - Resurgence

We are at the cusp of AMCs resurgence. Because most of us have been kept from participating in social activities, we can better understand that the public is yearning for a sense of normalcy. Sure we've gone pretty far with just watching movies on our TVs or computers through the pandemic, but that doesn't scratch the itch for many folk.
What you're investing into when you invest in AMC is the entire experience in tandem with its new streaming deals. And having been beaten so low—while still holding such great fundamental prospects— its share price is ready to blow up.
In the future when “The Deep Squeeze” is turned into a movie, we’ll be a part of history.
And you’re going to want to see it on the big screen.
--
Position: $50k in calls and shares
🚀🚀🚀🚀🚀🚀$AMC TO $69.69🚀🚀🚀🚀🚀🚀
🚀🚀🚀🚀🚀🚀$AMC TO THE MOON🚀🚀🚀🚀🚀🚀

NEW INFO 5 Results from share redemption are posted. Less than .2% redeemed. Very bullish as investors are showing extreme confidence in the future of PLBY.
https://finance.yahoo.com/news/playboy-mountain-crest-acquisition-corp-120000721.html
NEW INFO 4 Definitive Agreement to purchase 100% of Lovers brand stores announced 2/1.
https://www.streetinsider.com/Corporate+News/Playboy+%28MCAC%29+Confirms+Deal+to+Acquire+Lovers/17892359.html
NEW INFO 3 I bought more on the dip today. 5081 total. Price rose AH to $12.38 (2.15%)
NEW INFO 2 Here is the full webinar.
https://icrinc.zoom.us/rec/play/9GWKdmOYumjWfZuufW3QXpe_FW_g--qeNbg6PnTjTMbnNTgLmCbWjeRFpQga1iPc-elpGap8dnDv8Zww.yD7DjUwuPmapeEdP?continueMode=true&tk=lEYc4F_FkKlgsmCIs6w0gtGHT2kbgVGbUju3cIRBSjk.DQIAAAAV8NK49xZWdldRM2xNSFNQcTBmcE00UzM3bXh3AAAAAAAAAAAAAAAAAAAAAAAAAAAA&uuid=WN_GKWqbHkeSyuWetJmLFkj4g&_x_zm_rtaid=kR45-uuqRE-L65AxLjpbQw.1611967079119.2c054e3d3f8d8e63339273d9175939ed&_x_zm_rhtaid=866
NEW INFO 1 Live merger webinar with PLBY and MCAC on Friday January 29, 2021 at 12:00 NOON EST link below
https://mcacquisition.com/investor-relations/press-release-details/2021/Playboy-Enterprises-Inc.-and-Mountain-Crest-Acquisition-Corp-Participate-in-SPACInsider-ICR-Webinar-on-January-29th-at-12pm-ET/default.aspx
Playboy going public: Porn, Gambling, and Cannabis
!!!WARNING READING AHEAD!!! TL;DR at the end. It will take some time to sort through all the links and read/watch everything, but you should.
In the next couple weeks, Mountain Crest Acquisition Corp is taking Playboy public. The existing ticker MCAC will become PLBY. Special purpose acquisition companies have taken private companies public in recent months with great success. I believe this will be no exception. Notably, Playboy is profitable and has skyrocketing revenue going into a transformational growth phase.
Porn - First and foremost, let's talk about porn. I know what you guys are thinking. “Porno mags are dead. Why would I want to invest in something like that? I can get porn for free online.” Guess what? You are absolutely right. And that’s exactly why Playboy doesn’t do that anymore. That’s right, they eliminated their print division. And yet they somehow STILL make money from porn that people (see: boomers) pay for on their website through PlayboyTV, Playboy Plus, and iPlayboy. Here’s the thing: Playboy has international, multi-generational name recognition from porn. They have content available in 180 countries. It will be the only publicly traded adult entertainment (porn) company. But that is not where this company is going. It will help support them along the way. You can see every Playboy magazine through iPlayboy if you’re interested. NSFW links below:
https://www.playboy.com/
https://www.playboytv.com/
https://www.playboyplus.com/
https://www.iplayboy.com/
Gambling - Some of you might recognize the Playboy brand from gambling trips to places like Las Vegas, Atlantic City, Cancun, London or Macau. They’ve been in the gambling biz for decades through their casinos, clubs, and licensed gaming products. They see the writing on the wall. COVID is accelerating the transition to digital, application based GAMBLING. That’s right. What we are doing on Robinhood with risky options is gambling, and the only reason regulators might give a shit anymore is because we are making too much money. There may be some restrictions put in place, but gambling from your phone on your couch is not going anywhere. More and more states are allowing things like Draftkings, poker, state ‘lottery” apps, hell - even political betting. Michigan and Virginia just ok’d gambling apps. They won’t be the last. This is all from your couch and any 18 year old with a cracked iphone can access it. Wouldn’t it be cool if Playboy was going to do something like that? They’re already working on it. As per CEO Ben Kohn who we will get to later, “...the company’s casino-style digital gaming products with Scientific Games and Microgaming continue to see significant global growth.” Honestly, I stopped researching Scientific Games' sports betting segment when I saw the word ‘omni-channel’. That told me all I needed to know about it’s success.
“Our SG Sports™ platform is an enhanced, omni-channel solution for online, self-service and retail fixed odds sports betting – from soccer to tennis, basketball, football, baseball, hockey, motor sports, racing and more.”
https://www.scientificgames.com/
https://www.microgaming.co.uk/
“This latter segment has become increasingly enticing for Playboy, and it said last week that it is considering new tie-ups that could include gaming operators like PointsBet and 888Holdings.”
https://calvinayre.com/2020/10/05/business/playboys-gaming-ops-could-get-a-boost-from-spac-purchase/
As per their SEC filing:
“Significant consumer engagement and spend with Playboy-branded gaming properties around the world, including with leading partners such as Microgaming, Scientific Games, and Caesar’s Entertainment, steers our investment in digital gaming, sports betting and other digital offerings to further support our commercial strategy to expand consumer spend with minimal marginal cost, and gain consumer data to inform go-to-market plans across categories.”
https://www.sec.gov/Archives/edgadata/1803914/000110465921005986/tm2034213-12_defm14a.htm#tMDAA1
They are expanding into more areas of gaming/gambling, working with international players in the digital gaming/gambling arena, and a Playboy sportsbook is on the horizon.
https://www.playboy.com/read/the-pleasure-of-playing-with-yourself-mobile-gaming-in-the-covid-era
Cannabis - If you’ve ever read through a Playboy magazine, you know they’ve had a positive relationship with cannabis for many years. As of September 2020, Playboy has made a major shift into the cannabis space. Too good to be true you say? Check their website. Playboy currently sells a range of CBD products. This is a good sign. Federal hemp products, which these most likely are, can be mailed across state lines and most importantly for a company like Playboy, can operate through a traditional banking institution. CBD products are usually the first step towards the cannabis space for large companies. Playboy didn’t make these products themselves meaning they are working with a processor in the cannabis industry. Another good sign for future expansion. What else do they have for sale? Pipes, grinders, ashtrays, rolling trays, joint holders. Hmm. Ok. So it looks like they want to sell some shit. They probably don’t have an active interest in cannabis right? Think again:
https://www.forbes.com/sites/javierhasse/2020/09/24/playboy-gets-serious-about-cannabis-law-reform-advocacy-with-new-partnership-grants/?sh=62f044a65cea
“Taking yet another step into the cannabis space, Playboy will be announcing later on Thursday (September, 2020) that it is launching a cannabis law reform and advocacy campaign in partnership with National Organization for the Reform of Marijuana Laws (NORML), Last Prisoner Project, Marijuana Policy Project, the Veterans Cannabis Project, and the Eaze Momentum Program.”
“According to information procured exclusively, the three-pronged campaign will focus on calling for federal legalization. The program also includes the creation of a mentorship plan, through which the Playboy Foundation will support entrepreneurs from groups that are underrepresented in the industry.” Remember that CEO Kohn from earlier? He wrote this recently:
https://medium.com/naked-open-letters-from-playboy/congress-must-pass-the-more-act-c867c35239ae
Seems like he really wants weed to be legal? Hmm wonder why? The writing's on the wall my friends. Playboy wants into the cannabis industry, they are making steps towards this end, and we have favorable conditions for legislative progress.
Don’t think branding your own cannabis line is profitable or worthwhile? Tell me why these 41 celebrity millionaires and billionaires are dummies. I’ll wait.
https://www.celebstoner.com/news/celebstoner-news/2019/07/12/top-celebrity-cannabis-brands/
Confirmation: I hear you. “This all seems pretty speculative. It would be wildly profitable if they pull this shift off. But how do we really know?” Watch this whole video:
https://finance.yahoo.com/video/playboy-ceo-telling-story-female-154907068.html
Man - this interview just gets my juices flowing. And highlights one of my favorite reasons for this play. They have so many different business avenues from which a catalyst could appear. I think paying attention, holding shares, and options on these staggered announcements over the next year is the way I am going to go about it. "There's definitely been a shift to direct-to-consumer," he (Kohn) said. "About 50 percent of our revenue today is direct-to-consumer, and that will continue to grow going forward.” “Kohn touted Playboy's portfolio of both digital and consumer products, with casino-style gaming, in particular, serving a crucial role under the company's new business model. Playboy also has its sights on the emerging cannabis market, from CBD products to marijuana products geared toward sexual health and pleasure.” "If THC does become legal in the United States, we have developed certain strains to enhance your sex life that we will launch," Kohn said. https://cheddar.com/media/playboy-goes-public-health-gaming-lifestyle-focus Oh? The CEO actually said it? Ok then. “We have developed certain strains…” They’re already working with growers on strains and genetics? Ok. There are several legal cannabis markets for those products right now, international and stateside. I expect Playboy licensed hemp and THC pre-rolls by EOY. Something like this: https://www.etsy.com/listing/842996758/10-playboy-pre-roll-tubes-limited?ga_order=most_relevant&ga_search_type=all&ga_view_type=gallery&ga_search_query=pre+roll+playboy&ref=sr_gallery-1-2&organic_search_click=1 Maintaining cannabis operations can be costly and a regulatory headache. Playboy’s licensing strategy allows them to pick successful, established partners and sidestep traditional barriers to entry. You know what I like about these new markets? They’re expanding. Worldwide. And they are going to be a bigger deal than they already are with or without Playboy. Who thinks weed and gambling are going away? Too many people like that stuff. These are easy markets. And Playboy is early enough to carve out their spot in each. Fuck it, read this too: https://www.forbes.com/sites/jimosman/2020/10/20/playboy-could-be-the-king-of-spacs-here-are-three-picks/?sh=2e13dcaa3e05
Numbers: You want numbers? I got numbers. As per the company’s most recent SEC filing:
“For the year ended December 31, 2019, and the nine months ended September 30, 2020, Playboy’s historical consolidated revenue was $78.1 million and $101.3 million, respectively, historical consolidated net income (loss) was $(23.6) million and $(4.8) million, respectively, and Adjusted EBITDA was $13.1 million and $21.8 million, respectively.”
“In the nine months ended September 30, 2020, Playboy’s Licensing segment contributed $44.2 million in revenue and $31.1 million in net income.”
“In the ninth months ended September 30, 2020, Playboy’s Direct-to-Consumer segment contributed $40.2 million in revenue and net income of $0.1 million.”
“In the nine months ended September 30, 2020, Playboy’s Digital Subscriptions and Content segment contributed $15.4 million in revenue and net income of $7.4 million.”
They are profitable across all three of their current business segments.
“Playboy’s return to the public markets presents a transformed, streamlined and high-growth business. The Company has over $400 million in cash flows contracted through 2029, sexual wellness products available for sale online and in over 10,000 major retail stores in the US, and a growing variety of clothing and branded lifestyle and digital gaming products.”
https://www.sec.gov/Archives/edgadata/1803914/000110465921005986/tm2034213-12_defm14a.htm#tSHCF
Growth: Playboy has massive growth in China and massive growth potential in India. “In China, where Playboy has spent more than 25 years building its business, our licensees have an enormous footprint of nearly 2,500 brick and mortar stores and 1,000 ecommerce stores selling high quality, Playboy-branded men’s casual wear, shoes/footwear, sleepwear, swimwear, formal suits, leather & non-leather goods, sweaters, active wear, and accessories. We have achieved significant growth in China licensing revenues over the past several years in partnership with strong licensees and high-quality manufacturers, and we are planning for increased growth through updates to our men’s fashion lines and expansion into adjacent categories in men’s skincare and grooming, sexual wellness, and women’s fashion, a category where recent launches have been well received.” The men’s market in China is about the same size as the entire population of the United States and European Union combined. Playboy is a leading brand in this market. They are expanding into the women’s market too. Did you know CBD toothpaste is huge in China? China loves CBD products and has hemp fields that dwarf those in the US. If Playboy expands their CBD line China it will be huge. Did you know the gambling money in Macau absolutely puts Las Vegas to shame? Technically, it's illegal on the mainland, but in reality, there is a lot of gambling going on in China. https://www.forbes.com/sites/javierhasse/2020/10/19/magic-johnson-and-uncle-buds-cbd-brand-enter-china-via-tmall-partnership/?sh=271776ca411e “In India, Playboy today has a presence through select apparel licensees and hospitality establishments. Consumer research suggests significant growth opportunities in the territory with Playboy’s brand and categories of focus.” “Playboy Enterprises has announced the expansion of its global consumer products business into India as part of a partnership with Jay Jay Iconic Brands, a leading fashion and lifestyle Company in India.” “The Indian market today is dominated by consumers under the age of 35, who represent more than 65 percent of the country’s total population and are driving India’s significant online shopping growth. The Playboy brand’s core values of playfulness and exploration resonate strongly with the expressed desires of today’s younger millennial consumers. For us, Playboy was the perfect fit.” “The Playboy international portfolio has been flourishing for more than 25 years in several South Asian markets such as China and Japan. In particular, it has strategically targeted the millennial and gen-Z audiences across categories such as apparel, footwear, home textiles, eyewear and watches.” https://www.licenseglobal.com/industry-news/playboy-expands-global-footprint-india It looks like they gave COVID the heisman in terms of net damage sustained: “Although Playboy has not suffered any material adverse consequences to date from the COVID-19 pandemic, the business has been impacted both negatively and positively. The remote working and stay-at-home orders resulted in the closure of the London Playboy Club and retail stores of Playboy’s licensees, decreasing licensing revenues in the second quarter, as well as causing supply chain disruption and less efficient product development thereby slowing the launch of new products. However, these negative impacts were offset by an increase in Yandy’s direct-to-consumer sales, which have benefited in part from overall increases in online retail sales so far during the pandemic.” Looks like the positives are long term (Yandy acquisition) and the negatives are temporary (stay-at-home orders).
https://www.sec.gov/Archives/edgadata/1803914/000110465921006093/tm213766-1_defa14a.htm
This speaks to their ability to maintain a financially solvent company throughout the transition phase to the aforementioned areas. They’d say some fancy shit like “expanded business model to encompass four key revenue streams: Sexual Wellness, Style & Apparel, Gaming & Lifestyle, and Beauty & Grooming.” I hear “we’re just biding our time with these trinkets until those dollar dollar bill y’all markets are fully up and running.” But the truth is these existing revenue streams are profitable, scalable, and rapidly expanding Playboy’s e-commerce segment around the world.
"Even in the face of COVID this year, we've been able to grow EBITDA over 100 percent and revenue over 68 percent, and I expect that to accelerate going into 2021," he said. “Playboy is accelerating its growth in company-owned and branded consumer products in attractive and expanding markets in which it has a proven history of brand affinity and consumer spend.”
Also in the SEC filing, the Time Frame:
“As we detailed in the definitive proxy statement, the SPAC stockholder meeting to vote on the transaction has been set for February 9th, and, subject to stockholder approval and satisfaction of the other closing conditions, we expect to complete the merger and begin trading on NASDAQ under ticker PLBY shortly thereafter,” concluded Kohn.
The Players: Suhail “The Whale” Rizvi (HMFIC), Ben “The Bridge” Kohn (CEO), “lil” Suying Liu & “Big” Dong Liu (Young-gun China gang). I encourage you to look these folks up. The real OG here is Suhail Rizvi. He’s from India originally and Chairman of the Board for the new PLBY company. He was an early investor in Twitter, Square, Facebook and others. His firm, Rizvi Traverse, currently invests in Instacart, Pinterest, Snapchat, Playboy, and SpaceX. Maybe you’ve heard of them. “Rizvi, who owns a sprawling three-home compound in Greenwich, Connecticut, and a 1.65-acre estate in Palm Beach, Florida, near Bill Gates and Michael Bloomberg, moved to Iowa Falls when he was five. His father was a professor of psychology at Iowa. Along with his older brother Ashraf, a hedge fund manager, Rizvi graduated from Wharton business school.” “Suhail Rizvi: the 47-year-old 'unsocial' social media baron: When Twitter goes public in the coming weeks (2013), one of the biggest winners will be a 47-year-old financier who guards his secrecy so zealously that he employs a person to take down his Wikipedia entry and scrub his photos from the internet. In IPO, Twitter seeks to be 'anti-FB'” “Prince Alwaleed bin Talal of Saudi Arabia looks like a big Twitter winner. So do the moneyed clients of Jamie Dimon. But as you’ve-got-to-be-joking wealth washed over Twitter on Thursday — a company that didn’t exist eight years ago was worth $31.7 billion after its first day on the stock market — the non-boldface name of the moment is Suhail R. Rizvi. Mr. Rizvi, 47, runs a private investment company that is the largest outside investor in Twitter with a 15.6 percent stake worth $3.8 billion at the end of trading on Thursday (November, 2013). Using a web of connections in the tech industry and in finance, as well as a hearty dose of good timing, he brought many prominent names in at the ground floor, including the Saudi prince and some of JPMorgan’s wealthiest clients.” https://www.nytimes.com/2013/11/08/technology/at-twitter-working-behind-the-scenes-toward-a-billion-dollar-payday.html Y’all like that Arab money? How about a dude that can call up Saudi Princes and convince them to spend? Funniest shit about I read about him: “Rizvi was able to buy only $100 million in Facebook shortly before its IPO, thus limiting his returns, according to people with knowledge of the matter.” Poor guy :(
He should be fine with the 16 million PLBY shares he's going to have though :)
Shuhail also has experience in the entertainment industry. He’s invested in companies like SESAC, ICM, and Summit Entertainment. He’s got Hollywood connections to blast this stuff post-merger. And he’s at least partially responsible for that whole Twilight thing. I’m team Edward btw.
I really like what Suhail has done so far. He’s lurked in the shadows while Kohn is consolidating the company, trimming the fat, making Playboy profitable, and aiming the ship at modern growing markets.
https://www.reuters.com/article/us-twitter-ipo-rizvi-insight/insight-little-known-hollywood-investor-poised-to-score-with-twitter-ipo-idUSBRE9920VW20131003
Ben “The Bridge” Kohn is an interesting guy. He’s the connection between Rizvi Traverse and Playboy. He’s both CEO of Playboy and was previously Managing Partner at Rizvi Traverse. Ben seems to be the voice of the Playboy-Rizvi partnership, which makes sense with Suhail’s privacy concerns. Kohn said this:
“Today is a very big day for all of us at Playboy and for all our partners globally. I stepped into the CEO role at Playboy in 2017 because I saw the biggest opportunity of my career. Playboy is a brand and platform that could not be replicated today. It has massive global reach, with more than $3B of global consumer spend and products sold in over 180 countries. Our mission – to create a culture where all people can pursue pleasure – is rooted in our 67-year history and creates a clear focus for our business and role we play in people’s lives, providing them with the products, services and experiences that create a lifestyle of pleasure. We are taking this step into the public markets because the committed capital will enable us to accelerate our product development and go-to-market strategies and to more rapidly build our direct to consumer capabilities,” said Ben Kohn, CEO of Playboy.
“Playboy today is a highly profitable commerce business with a total addressable market projected in the trillions of dollars,” Mr. Kohn continued, “We are actively selling into the Sexual Wellness consumer category, projected to be approximately $400 billion in size by 2024, where our recently launched intimacy products have rolled out to more than 10,000 stores at major US retailers in the United States. Combined with our owned & operated ecommerce Sexual Wellness initiatives, the category will contribute more than 40% of our revenue this year. In our Apparel and Beauty categories, our collaborations with high-end fashion brands including Missguided and PacSun are projected to achieve over $50M in retail sales across the US and UK this year, our leading men’s apparel lines in China expanded to nearly 2500 brick and mortar stores and almost 1000 digital stores, and our new men’s and women’s fragrance line recently launched in Europe. In Gaming, our casino-style digital gaming products with Scientific Games and Microgaming continue to see significant global growth. Our product strategy is informed by years of consumer data as we actively expand from a purely licensing model into owning and operating key high-growth product lines focused on driving profitability and consumer lifetime value. We are thrilled about the future of Playboy. Our foundation has been set to drive further growth and margin, and with the committed capital from this transaction and our more than $180M in NOLs, we will take advantage of the opportunity in front of us, building to our goal of $100M of adjusted EBITDA in 2025.”
https://www.businesswire.com/news/home/20201001005404/en/Playboy-to-Become-a-Public-Company
Also, according to their Form 4s, “Big” Dong Liu and “lil” Suying Liu just loaded up with shares last week. These guys are brothers and seem like the Chinese market connection. They are only 32 & 35 years old. I don’t even know what that means, but it's provocative.
https://www.secform4.com/insider-trading/1832415.htm
https://finance.yahoo.com/news/mountain-crest-acquisition-corp-ii-002600994.html
Y’all like that China money?
“Mr. Liu has been the Chief Financial Officer of Dongguan Zhishang Photoelectric Technology Co., Ltd., a regional designer, manufacturer and distributor of LED lights serving commercial customers throughout Southern China since November 2016, at which time he led a syndicate of investments into the firm. Mr. Liu has since overseen the financials of Dongguan Zhishang as well as provided strategic guidance to its board of directors, advising on operational efficiency and cash flow performance. From March 2010 to October 2016, Mr. Liu was the Head of Finance at Feidiao Electrical Group Co., Ltd., a leading Chinese manufacturer of electrical outlets headquartered in Shanghai and with businesses in the greater China region as well as Europe.”
Dr. Suying Liu, Chairman and Chief Executive Officer of Mountain Crest Acquisition Corp., commented, “Playboy is a unique and compelling investment opportunity, with one of the world’s largest and most recognized brands, its proven consumer affinity and spend, and its enormous future growth potential in its four product segments and new and existing geographic regions. I am thrilled to be partnering with Ben and his exceptional team to bring his vision to fruition.”
https://www.businesswire.com/news/home/20201001005404/en/Playboy-to-Become-a-Public-Company
These guys are good. They have a proven track record of success across multiple industries. Connections and money run deep with all of these guys. I don’t think they’re in the game to lose.
I was going to write a couple more paragraphs about why you should have a look at this but really the best thing you can do is read this SEC filing from a couple days ago. It explains the situation in far better detail. Specifically, look to page 137 and read through their strategy. Also, look at their ownership percentages and compensation plans including the stock options and their prices. The financials look great, revenue is up 90% Q3, and it looks like a bright future.
https://www.sec.gov/Archives/edgadata/1803914/000110465921005986/tm2034213-12_defm14a.htm#tSHCF
I’m hesitant to attach this because his position seems short term, but I’m going to with a warning because he does hit on some good points (two are below his link) and he’s got a sizable position in this thing (500k+ on margin, I think). I don’t know this guy but he did look at the same publicly available info and make roughly the same prediction, albeit without the in depth gambling or cannabis mention. You can also search reddit for ‘MCAC’ and very few relevant results come up and none of them even come close to really looking at this thing.
https://docs.google.com/document/d/1gOvAd6lebs452hFlWWbxVjQ3VMsjGBkbJeXRwDwIJfM/edit?usp=sharing
“Also, before you people start making claims that Playboy is a “boomer” company, STOP RIGHT THERE. This is not a good argument. Simply put. The only thing that matters is Playboy’s name recognition, not their archaic business model which doesn’t even exist anymore as they have completely repurposed their business.”
“Imagine not buying $MCAC at a 400M valuation lol. Streetwear department is worth 1B alone imo.”
Considering the ridiculous Chinese growth as a lifestyle brand, he’s not wrong.
Current Cultural Significance and Meme Value: A year ago I wouldn’t have included this section but the events from the last several weeks (even going back to tsla) have proven that a company’s ability to meme and/or gain social network popularity can have an effect. Tik-tok, Snapchat, Twitch, Reddit, Youtube, Facebook, Twitter. They all have Playboy stuff on them. Kids in middle and highschool know what Playboy is but will likely never see or touch one of the magazines in person. They’ll have a Playboy hoodie though. Crazy huh? A lot like GME, PLBY would hugely benefit from meme-value stock interest to drive engagement towards their new business model while also building strategic coffers. This interest may not directly and/or significantly move the stock price but can generate significant interest from larger players who will.
Bull Case: The year is 2025. Playboy is now the world leader pleasure brand. They began by offering Playboy licensed gaming products, including gambling products, direct to consumers through existing names. By 2022, demand has skyrocketed and Playboy has designed and released their own gambling platforms. In 2025, they are also a leading cannabis brand in the United States and Canada with proprietary strains and products geared towards sexual wellness. Cannabis was legalized in the US in 2023 when President Biden got glaucoma but had success with cannabis treatment. He personally pushes for cannabis legalization as he steps out of office after his first term. Playboy has also grown their brand in China and India to multi-billion per year markets. The stock goes up from 11ish to 100ish and everyone makes big gains buying somewhere along the way.
Bear Case: The United States does a complete 180 on marijuana and gambling. President Biden overdoses on marijuana in the Lincoln bedroom when his FDs go tits up and he loses a ton of money in his sports book app after the Fighting Blue Hens narrowly lose the National Championship to Bama. Playboy is unable to expand their cannabis and gambling brands but still does well with their worldwide lifestyle brand. They gain and lose some interest in China and India but the markets are too large to ignore them completely. The stock goes up from 11ish to 13ish and everyone makes 15-20% gains.
TL;DR: Successful technology/e-commerce investment firm took over Playboy to turn it into a porn, online gambling/gaming, sports book, cannabis company, worldwide lifestyle brand that promotes sexual wellness, vetern access, women-ownership, minority-ownership, and “pleasure for all”. Does a successful online team reinventing an antiquated physical copy giant sound familiar? No options yet, shares only for now. $11.38 per share at time of writing. My guess? $20 by the end of February. $50 by EOY. This is not financial advice. I am not qualified to give financial advice. I’m just sayin’ I would personally use a Playboy sports book app while smoking a Playboy strain specific joint and it would be cool if they did that. Do your own research. You’d probably want to start here:
WARNING - POTENTIALLY NSFW - SEXY MODELS AHEAD - no actual nudity though
https://s26.q4cdn.com/895475556/files/doc_presentations/Playboy-Craig-Hallum-Conference-Investor-Presentation-11_17_20-compressed.pdf
Or here:
https://www.mcacquisition.com/investor-relations/default.aspx
Jimmy Chill: “Get into any SPAC at $10 or $11 and you are going to make money.”
STL;DR: Buy MCAC. MCAC > PLBY couple weeks. Rocketship. Moon.
Position: 5000 shares. I will buy short, medium, and long-dated calls once available.

As I am sure a lot of you know, Mountain Crest Acquisitions (MCAC) are in late-stage talks with playboy to take them public currently at a valuation of ~$425M meaning we should see the MCAC ticket convert to Playboys ticker, PLBY, within a matter of days, if not weeks. A lot of the people I have seen talking about the Playboy acquisition have argued that Playboy is a dying brand and are far beyond their prime, which is no doubt true, in terms of selling sexy magazines that have all but been made redundant by online pornography. However, this company and its newish CEO (of 2017), Ben Kohn, have given it a new lease of life and are changing the globally recognized brand's direction to be more of a lifestyle and sexual wellness brand. They have been seeing huge year on year growth since Kohn's appointment in 2017 across almost all revenue streams, Kohn has been a part of Playboy for many years and initially helped privatize them in the early 2010s. He is highly regarded for his marketing and sales abilities.
WHY PLAYBOY?
First of all let me offer you CEO Ben Kohn the chance to convince you: Here is his investor presentation. The numbers are extremely impressive.
If you would rather hear it from me, for whatever reason, my take is below:
For me, one of the most notable things about this deal is its the extremely rare opportunity to buy into one of the world's most known brands at such a low valuation. How many SPACs currently on the market would you be able to ask your typical man or woman on the street about the company they plan on buying and almost everytime get an answer about who they are and what they do? Playboy had a WHOPPING $3bn annual spend on thier brand across 180 countries worldwide last year!
Playboy are taking huge strides moving away from the sex negative and very 20th century ideals they built their original empire off, and closing in on an increasingly empowered and sexually liberated young demographic. The sexual wellness market is seeing massive growth among people both young and old and is expected to reach $125 billion by 2026 with an expected anual growth of 12.1% YoY, now think about the size of this market in context of how many brands do you know that are key players in this sector? It should be somewhat obvious that Playboy is in an extremely unique position to capitalize on its massive recognition in a growing market otherwise lacking recognized leaders, they plan on doing this with a strategy of M&A which are outlined below.
First, I will talk about what they are doing now to fit themselves into the market we see today. Playboy has begun a plan to increase growth via acquisitions, and started by buying leading sexual wellness reatiler Yandy at the end of 2019, and have driven direct sales up from $3.7M in 1H 2019 to $29.7M in 1H 2020. On top of this, they are working to make their own playboy.com website into a retail destination, and across Yandy and their own store they were seeing 70,000 orders a month with a AOV of $72.
During the stock redemption period Stockholders requested redemption of a total of 8,842 shares, less than 0.2% of Mountain Crest’s issued shares. As a result, Mountain Crest anticipates that approximately $58.7 million will be released to PLBY Group immediately following the closing of the transactions, with further PIPE investments of $50 million. Ben Kohn, CEO of Playboy, said, “We are delighted with the overwhelming support for this transaction, which at closing is expected to inject more than $100 million of gross proceeds into PLBY Group, so that we can aggressively capitalize on our well-defined and exciting organic and acquisition-led growth plan.”.
On top of direct sales increases, Playboy continued to capitalize on their brand recognition by increasing licensing revenues YoY, with ~$400M currently in forward-booked cash flow. Note licensing is one of the most cost-effective way brands can earn revenue, with 80% cost margins and being able to create such licensing demand is a rare feature only attributed to truly globally recognized brands. I read somewhere which I now cannot find that Kohn has said (I am sure somewhat jokingly) that he believes the Playboy Bunny Logo alone is worth a billion dollars, and I can see some truth in it, the Playboy bunny is close to the levels of recognition of the Nike swoosh or the McDonalds M, even among young people who have probably never seen a playboy mag before, myself included (i have never seen it sold in the UK).
As breifly mentioned above, playboy Revenues are growing rapidly. 2020 Projected Revenues is expected to be up 75% year over year, and Projected Adjusted EBITDA is expected to be up 112% year over year, they have projected 2021E revenue and adjusted EBITDA of $166.8M and $40.3M, respectively, with an goal of $100M EBITDA by 2026.
They already have a number of CBD-based products and have plans in place to grow into the legal marijuana industry when it is eventually legalized at the federal level.
They are looking to increase their positions in the gaming industry and have recently opened a poker house in Houston, on top of their London Casino, with further plans to add more casinos in the US, and looking for sports betting partnership opportunities.
Playboy are already an established producer of apparel and maintain a realtively large presence within the market, particularly in China, where their items are sold in over 2,500 brick and mortar stores, and 1,000 online stores across the nation. In the western World they are stocked at household retailers such as urban outfitters, and have done many collabs with well regarded and in fashion millenial brands such as Supreme, Anti Social Social Club, and Alpha industries (all 3 of which have seen extraordinary growth among young people all within very short time). For me this stands out massively and shows promise on both sides of the table; These trendy and modern brands want to associate with the Playboy logo and lifestyle, showing a level of interest from consumers, but more importantly it shows that Playboy is tapped in and aware of the youth culture, an area in which they have the potential to capitalise massively on through all of their revenue streams.
One of the things i think people are most underestimating about this merger is that the current trajectory Kohn is taking Playboy along is very 2021, and is extremely focused on growth. I believe the brand to be undervalued already, and when taking into consideration the trends in Millenial and Gen Z society, I think this brand is ready to once again become a market leader in its new sectors.
A comment I saw on another DD put it well: "If Kylie Jenner thinks its cool, it probably is". It sounds stupid, but the power of social media in conjunction with its recognized logo and brand mean you cannot underestimate this companies value and potential for both short term and long term growth. Coupled with the large cash injection of over $100M and a new focus on M&A, the upside really is potentially enormous. Personally i think it is somewhat criminal this company does not have a current valuation of close to a billion USD considering its recognition, and i think Kohn is the man to enable playboy to capitalise on their extremely unique position in a rapidly growing market.
The above stats are all taken from the Playboy investor presentation given by Ben Kohn here, (as said above I would encourage you all to look at this, it is very impressive), and from MCAC press releases that can be found here.

Gov. Wolf Limited-Time Mitigation Order
Sec. Levine Limited-Time Mitigation Order
As COVID-19 cases continue to rise, Governor Tom Wolf and Secretary of Health Dr. Rachel Levine today implored Pennsylvanians to take the next three weeks and stand united against the virus by adhering to existing mitigation orders and stricter efforts announced today.
“Today I am announcing additional, temporary COVID-19 protective mitigation measures in the commonwealth,” said Gov. Wolf. “With these measures in place, we hope to accomplish three goals: First, stop the devastating spread of COVID-19 in the commonwealth. Second, keep our hospitals and health care workers from becoming overwhelmed. And third, help Pennsylvanians get through the holiday season – and closer to a widely available vaccine – as safely as possible. This is a bridge to a better future in Pennsylvania.”
The new, limited-time mitigation orders take effect at 12:01 a.m. on December 12, and remain in effect until 8 a.m. on January 4, 2021.
“Each of the last two days we have reported the highest number of deaths since the beginning of the pandemic,” Dr. Rachel Levine said. “In the past week, we have reported close to 1,100 new deaths from COVID-19 across Pennsylvania. The virus continues to strain our health care systems and the dramatic rise in cases among all age groups, including among school-age children, is alarming. Since the start of the pandemic, there have been more than 37,500 cases among children age 5 to 18, yet 9,500 of those cases occurred in the past two weeks.”
The Order provisions outlined here are accompanied by supportive data used in part to make these decisions. The data provides a sampling of research that supports why limiting gatherings, reducing occupancy, and temporarily suspending some activities, among other efforts, are considered vital to stopping the spread of COVID-19.
Two recent studies, one by Yale University and one by Stanford University, substantiate more than one of these mitigation efforts. Links to the full studies and additional data and research can be found on the Department of Health’s data page, here.
Limited-Time Mitigation efforts announced today include:
In-Person Dining and Alcohol Sales
All in-person indoor dining at businesses in the retail food services industry, including, but not limited to, bars, restaurants, breweries, wineries, distilleries, social clubs, and private catered events is prohibited.
Outdoor dining, take-out food service, and take-out alcohol sales are permitted and may continue, subject to any limitations or restrictions imposed by Pennsylvania law, or this or any other Order issued by the Sec. of Health or by the governor.
Multiple studies have found indoor dining to drive case increases and fatalities. A study by JP Morgan analyzed credit card spending of more than 30 million Chase cardholders and Johns Hopkins University’s case tracker and found that higher restaurant spending in a state predicted a rise in new infections there three weeks later. Additionally, Research from Stanford University found that restaurants accounted for a significant amount of new infections while research from Yale University found that closing restaurants reduced fatality rates.
Indoor Gatherings and Events
Indoor gatherings and events of more than 10 persons are prohibited.
Churches, synagogues, temples, mosques, and other places of congregate worship are specifically excluded from the limitations set forth above during religious services, these institutions are strongly encouraged to find alternative methods for worship, as in person gatherings pose a significant risk to participants at this time. While this an incredibly difficult recommendation to make, particularly at this time of year, faith leaders must carefully weigh the health risks to their congregants given the immense amount of community spread of COVID-19.
A new study from Stanford University and published in the journal, nature, used cellphone data collected from 10 U.S. cities from March to May to demonstrate that restaurants, gyms, cafes, churches and other crowded indoor venues accounted for some 8 in 10 new infections in the early months of the U.S. coronavirus epidemic.
Outdoor Gatherings and Events
Outdoor gatherings and events of more than 50 persons are prohibited.
According to a Yale University study, limiting outdoor gatherings was among consistent policies found to reduce fatality rates.
The CDC states that medium-sized outdoor gatherings carry a higher risk of COVID-19 spread, even with social distancing. CDC notes that the more people an individual interacts with at a gathering and the longer that interaction lasts, the higher the potential risk of becoming infected with COVID-19 and COVID-19 spreading, and that the higher the level of community transmission in the area that the gathering is being held, the higher the risk of COVID-19 spreading during a gathering.
Capacity Limits for Businesses
All in-person businesses serving the public may only operate at up to 50% of the maximum capacity stated on the applicable certificate of occupancy, except as limited by existing orders to a smaller capacity limit.
The same Stanford University study that collected cellphone data also noted that limiting indoor capacity can reduce COVID-19 transmissions.
Gyms and Fitness Facilities
Indoor operations at gyms and fitness facilities are prohibited.
Outdoor facilities and outdoor classes can continue, but all participants must wear face coverings in accordance with the Sec. of Health’s Updated Order Requiring Universal Face Coverings, including any subsequent amendments, and practice physical distancing requirements.
According to a Yale University study, closing businesses like gyms was among consistent policies found to reduce fatality rates.
Entertainment Industry
All in-person businesses in the entertainment industry serving the public within a building or indoor defined area, including, but not limited to, theaters, concert venues, museums, movie theaters, arcades, casinos, bowling alleys, private clubs, and all other similar entertainment, recreational or social facilities, are prohibited from operation.
The CDC puts movie theaters and other indoor settings on its list of higher-risk activities for contracting COVID-19.
In-Person Extracurricular School Activities
Voluntary activities sponsored or approved by a school entity’s governing body or administration are suspended, but these extracurricular activities may be held virtually. This includes, but is not limited to, attendance at or participation in activities such musical ensembles, school plays, student council, clubs, and school dances.
Our top priority is stopping the spread of this virus so students and teachers can return to their classrooms as soon as possible. Data from the Department of Health notes that one-quarter of the cases of COVID among school-age children have occurred within the past two weeks, increasing the need to keep children safe outside of school so that they can return to classrooms.
K-12 School Sports and Youth Sports
All sports at K-12 public schools, nonpublic schools, private schools and club, travel, recreational, intermural, and intramural sports are paused.
The Pennsylvania Principals Association is recommending a delay to the start of the winter sports season. The surge in cases among school-age children increases the risk that asymptomatic participants will spread the virus at a game or practice, in the locker room, while traveling to and from events, or at team meals, parties or other gatherings.
Professional and Collegiate Sports
Professional or collegiate sports activities may continue in accordance with guidance from the CDC and the Department of Health.
Spectators may not attend such sports activities in person.
The CDC warns large gatherings create a high risk of COVID-19 spreading.
“We know that COVID-19 thrives in places where people gather together,” Gov. Wolf said. “Therefore, these mitigation measures target high-risk environments and activities and aim to reduce the spread of this devastating virus.”
According to Yale University research, mitigation measures such as mandatory mask requirements, and gym and restaurant closures are policies that most consistently predict lower four- to six-week-ahead fatality growth.
“The work we do now to slow the spread of COVID-19 is not only crucial to keeping our fellow Pennsylvanians safe and healthy,” Gov. Wolf said. “It will help all of us get back to normal, and back to all of the things we’ve missed, faster. And it means more Pennsylvanians will be alive to celebrate that brighter future. This year, we show our love for our families and friends by celebrating safely and protecting one another.”
Frequently Asked Questions
Gov. Wolf Amended Mitigation, Enforcement, and Immunity Order
edit: links

Hello, you may know me from DD posts about IVZ and 3DP. I'm still heavily in these. But today I bring you SBW.
Ok for real, this might be the laziest DD you've read because it was copy pasted direct from hotcopper. But it will also be the best DD you've read (no offence to u/bigjimbeef recent DD on this but he's always drunk and while his DD did get me interested in this, I think maybe some people didn't take his post seriously because the post read like he had a beer in one hand and his dick in the other).
But I've been thinking lately... wouldn't it be nice if I could, for once, jump on a stock, before it rockets? Like... Every stock I've been in so far has holders who are already 10 bagging. How do they find these stocks and how can I become one of them?
Well, here is your chance. Full disclosure, I'm in at 26.5c, closing price today is 24.5c. It IPOd at 35c so we are still at bargain prices. No rocket yet. If you can think of a reason not to buy, please say so, before I take a larger position tmw morning, as I am trying to keep myself from getting overly keen on yet another stock but so far I can't find a good reason to put money anywhere else.
Copy pasta below:
I thought it was about time that I made the “Ultimate Guide to SBW” and consolidated months of research and analysis into one comprehensive post. Then we can add bits to it from there as more positive news develops.
Let us start with capital structure.
Capital Structure and Why This Is Important!
There are currently 139 million shares on issue, sitting at a price of 32 cents.
This gives a Market Capitalization of approximately ~45 million AUD.
Keep this in mind when we discuss partners and peers later - it’s arguably a more important metric than share price.
The Top 20 shareholders of SBW (which includes key management as the Top 2 holders) have about 90% of the stock on issue. The interests of management are well-aligned with shareholders.
What does this mean in plain English? It means management are extremely incentivized to perform, and are not just idly sitting by collecting an easy paycheck like so many other ASX companies. They have as much at stake as you do! Probably more.
The Core Business
The core business is a profitable operation which has been selling weighing systems to both retail and healthcare sectors – with reliable recurring revenue from customers including, but not limited to, household names like Toshiba and Fujitsu.
SBW have a combination of weighing + artificial intelligence + advanced mathematics which cannot be easily duplicated. The company was first founded in 1971 and was one of the first to shift from mechanical to digital weighing and ultra-thin IoT load sensors.
If you are interested in reading up on some of their patents, please see this link:
https://patents.justia.com/search?q=Shekel scales
I found 11 separate patents here, which are probably not an exhaustive list, but ranging from weighing vehicles in motion, to load cell devices (this is the flagship technology), point of sale apparatus and infant weight systems (for their medical customers)
SBW's three main technology pillars, including patented ultra-thin high precision load sensors, can distinguish between Coke, Fanta & Pepsi - even if they are all in 1.5 litre bottles!
The Hitachi Project (Hitachi’s Market Cap = roughly ~33 billion USD at time of writing, SBW = ~45 million AUD)
http://hlds.co.jp/product-eng/1079
[Translated from Japanese] Hitachi-LG Data Storage. Inc. exhibited in “NRF 2020 Retail’s Big Show” which took place at Jacob K. Javits Convention Center in New York from 1/12-1/14/2020, where Unmanned Store solution using 3D LiDAR(TOF) was jointly exhibited with Hitachi America, Hitachi Vantara, and Shekel Brainweigh (Israel).
Some quotes I found from Hitachi themselves
“Micro-markets are the fastest growing segment of convenience shopping. We see them exploding in high traffic areas, such as workplaces, campuses, train stations and airports,” said Hideki Hayashi, Sales and Marketing Manager, Hitachi EU Ltd.
“Deploying the joint Shekel-Hitachi solution enables retailers and micro-market operators to provide the 24/7 frictionless shopping experience consumers demand without sacrificing accuracy, performance or profitability.”
“As the manager responsible for LiDAR products in EMEA markets, I consider the R&D and commercial collaboration with Shekel Brainweigh to be the perfect partnership as we both bring our respective capabilities to develop a seamless consumer shopping experience. We are extremely pleased to collaborate with Shekel Brainweigh, which we believe is the best digital weighing technology developer globally."
“The collaboration builds on our expertise in optical motion sensors, together with Shekel’s advanced Product Aware Technology, and further strengthens our commitment to overcome the challenges, and address the significant opportunities, in global retail store automation.”
https://www.youtube.com/watch?v=P-uxk2Ycoqw
The Open Retail Initiative
https://www.lfedge.org/2020/02/13/n...ensor-fusion-for-intelligent-loss-prevention/
For the one-year anniversary of ORI, six initiative members Edgify, Flooid, Shekel and LF Edge members HP, IOTech and Intel inspired by the initiative, worked together on a demo for the Intel booth that showcased the value of Real Time Sensor Fusion for a loss prevention use case at self-checkout. The retail environment has become incredibly complex. The latest technologies enable data-driven experiences and unlock business value like never before, yet there is still a lack of interoperability making it difficult for retailers to deploy integrated solutions with speed and ease. The demo illustrates how integration roadblocks can be a thing of the past.
The demo pulls together real time data through the EdgeX middleware from different common systems including POS real-time transaction log, CV-based object detection, scale solution, and RFID, and data fusion—all in a single pane of glass.
Here are some PowerPoint slides of IBM, Intel & Hewlett-Packard talking about the joint solution
https://wiki.edgexfoundry.org/downl...amp;modificationDate=1579904283000&api=v2
The Fast Track Project
https://www.edgify.ai/retail/
Reduce time at till and selection at self-checkout by up to 98%. Computer vision-based product recognition, that continuously learns directly on the till, so the accuracy of the detection always increases.
Friction-less stores are great in theory but extremely complicated to scale in practice. Our edge training solution makes autonomous stores scalable, by having all the AI train directly on the camera. No infrastructure costs and no added complications.
Reduce incorrect selections by up to 90%. Either intentional or unintentional, use computer vision that is trained directly on the SCO itself to reduce loss by more than half!
No barcodes, no packaging, no worries. Simple USB cameras can detect the produce at close to 100% accuracy. Use as a decision support for cashiers, or to avoid consumers having to go through long and confusing menus.
https://www.edgify.ai/wp-content/uploads/2019/08/Retail_Intro.pdf
https://twitter.com/Edgify_AI/status/1277859718413930505
https://twitter.com/Edgify_AI/status/1230534216133332997
Shekel’s Visual Recognition Platform embedded with Edgify’s machine-learning training framework is the world’s first cloudless software that automatically recognises products, including fresh produce, at a retail self-checkout.
This ~45 million AUD Market Cap company allows retailers to potentially bypass expensive cloud services from Microsoft, Google and Amazon.
Sending data to the cloud is a very costly process with the Google Cloud Platform charging 1,000 stores more than US$7.2 million in cloud computing power per annum.
https://www.youtube.com/watch?v=FrpZ56IdFtg
https://www.youtube.com/watch?v=lpqwqQ1tJ4A
You can see the Shekel system 35 seconds in.
Patnership with Madix (2nd Largest Retail Shelves Manufacturer in NA)
https://www.bloomberg.com/press-rel...ade-product-aware-cabinets-to-retail-industry
NEW YORK -- January 13, 2020
Madix Inc., the second largest retail shelves manufacturer in North America, and Shekel Brainweigh Ltd. (ASX: SBW), the leader in advanced weighing technology, today announced the availability of ready-made Product Aware shelves and solutions for the retail industry.
“By seamlessly integrating Product Aware shelves into our hardware, our customers are armed with accessible data giving them reliable inventory visibility and assisting them in addressing over-stock and out-of-stock problems, as well as better control over shrinkage” said Steve Kramer, VP Sales, Madix.
“For the retail industry, this is a defined competitive edge that promotes the opportunity to increase profitability.”
Conclusion
So, remember - the core scales business is what drives the revenue we see today, but the innovation division is where the real potential resides. That will take a few more months/years to play out. I think most people are buying for the fully autonomous frictionless retail technology which comes with a huge addressable market. That’s still being undervalued in my humble opinion.
Considering there are quite a few ASX-listed tech companies with no revenue and over 100 million market cap (some even @ 1 billion market cap right now…
I don’t see why SBW couldn’t move past ~45m market cap in the near future.
Now if you read all this - links included- I commend you for your diligence. It should be obvious now that the Capsule (in partnership with Hitachi) is the “crown jewel” or “holy grail” of retail disruption technology plays (look at the success of Amazon GO for example).
So you are probably thinking: "This sounds great @verce but it’s all just aspirational and hypothetical. When will it be put into operation?" Well I’m glad you asked. The answer might surprise you. And it may be sooner than you think.
The SBW Half Year Report from 31 August 2020 had a little snippet that I think a lot of people missed. Specifically, the following text:
“Flagship micro-market project Capsule is in an advanced stage of pilot in Europe, and expected to be open to the public for trial in the second half of 2020.”
Now you are probably wondering: "That’s great but what if it’s just some obscure insignificant corner store somewhere?" Again, the answer may surprise you, and requires a little digging.
Enter Groupe Casino. A historic player in French retailing since 1898, the Casino Group is one of the world leaders in food retailing with more than 12,200 stores worldwide, located in France, Latin America and the Indian Ocean and a turnover of 37.8 billion euro.
In their Annual Report this year, they mentioned an exciting new disruptive project they were working on with a relatively obscure company.
https://www.groupe-casino.fwp-content/uploads/2020/06/RapportActivite_Casino_2019_EN.pdf
And we have some commentary from SBW featured on Page 42-43 of their Annual Report plugging "the first fully autonomous store in Europe". I'll leave it to readers to determine the significance of being mentioned in the Annual Report of a leading mass-market retail group with billions of Euro in revenue.
The same group who claim to be the source of many innovations such as the first distributor's brand in 1901, the first self-service store in 1948 or even the display of a sell-by date on consumer products in 1959. They are always pushing the boundaries of innovation, and it's an exciting partner to have.
It’s also worth keeping in mind that issuing shares are not the only mechanism by which to raise money. And that a placement at a premium to a sophisticated cornerstone investor can yield great results. Kind of like what happened with 3DP and IHR.
If I was them, I’d be asking Hitachi to chip in.
SBW also have the luxury of generating enough revenue (we are talking USD millions) in 2H20 from the core scales division, that a capital raising may not actually be necessary at this point in time. So they can wait for a better outcome.
Source: “Post 30 June 2020, the business has seen a resurgence of orders for Shekel’s products, resulting in July 2020 sales exceeding July 2019 sales by approximately 18%.”
The final thing I would like to add (if you have in fact read my other two posts which are worth reading) is coming to an appropriate valuation. This is the tricky part, especially with microcap stocks which are valued on their future potential.
We do know that there are medium to high barriers to entry, and that SBW have accumulated a competitive edge with their technology iterated over several decades, with certain patents in place.
We also know that the opportunity is global in scope with a huge total addressable market (TAM) - and that traditional retail is ripe for disruption.
Remember when there were more human checkout lanes at supermarkets than self-checkout? Now it's the other way around. We are even starting to see self-checkout in Bunnings. The trend for autonomous and friction-less shopping - what some term "Grab & Go" - was inevitable. And coronavirus has only accelerated this trend.
https://www.ibtimes.com/5-tech-tren...-end-year-result-coronavirus-pandemic-3011819
5 Tech Trends Expected To Shape Retail Through The End Of The Year As Result Of The Coronavirus Pandemic
“Retailers and brands will need to collaborate more than ever with technology startups to futureproof their businesses and be better equipped to meet fast-changing consumer demand and behavior,” Coresight said.
Coresight reported the pandemic has piqued consumer interest in cashierless models.
Technology firm Shekel Brainweigh said 87% of respondents to its global consumer survey indicated they would choose stores with self-checkout over those with only cashier lines.
So if you ask me, when you consider all the different technology projects SBW are working on - most of which we now know are "close to commercialisation*" - is 45m AUD market cap really fair value for something that has the potential to roll out globally? I personally think it is still undervalued, but the market will eventually decide one way or the other.
Even at 70 cents per share, the implied market cap with only 139 million shares on issue is about ~97 million AUD. Which is still less than 100m. And still quite low when you compare SBW's proven technology and revenue to a lot of unproven technology companies with no real customers whatsoever. And extremely low when you compare SBW's market cap to their collaborative partner Hitachi (ranked 38th in the 2012 Fortune Global 500).
Even at 32 cents as it currently stands, we are still below the IPO price when SBW first listed at 35 cents per share. How does that make any sense?

Notes and Highlights of Kentucky Governor Andy Beshear’s Live Update September 29, 2020
Notes by mr_tyler_durden and Daily Update Team
Register for your Absentee Ballot here!
Watch here:

• Youtube: Update (YT Channel)
• Facebook: Update (FB Page)

Headlines

• 67,856 Cases (+1,018), 1,170 Deaths (+8)
• New cases by county: 226x Jefferson, 143x Fayette, 58x Laurel, 29x Warren, 28x Barren, 26x Christian, 26x Madison, 22x Hardin, 19x Calloway, 18x Boyd, 16x Rowan, 15x Kenton, 14x Henderson, 14x Scott, 13x Boone, 13x Franklin, 11x Carter, 11x Union, 11x Whitley, 10x Daviess, 9x Greenup, 9x Pulaski, 8x Bullitt, 8x Lincoln, 8x Magoffin, 8x Pike, 7x Bourbon, 7x Boyle, 7x Nelson, 7x Oldham, 7x Trigg, 6x Anderson, 6x Clark, 6x Garrard, 6x Hopkins, 6x Jessamine, 6x Logan, 6x Muhlenberg, 5x Campbell, 5x Grant, 5x Graves, 5x Harlan, 5x Marshall, 5x Morgan, 5x Shelby, 4x Adair, 4x Allen, 4x Bell, 4x Clay, 4x Floyd, 4x Hart, 4x Knox, 4x Leslie, 4x McCracken, 4x Mercer, 4x Ohio, 4x Perry, 4x Todd, 3x Breckinridge, 3x Caldwell, 3x Fulton, 3x Johnson, 3x Knott, 3x Larue, 3x Lyon, 3x Menifee, 3x Montgomery, 3x Owsley, 3x Spencer, 3x Wayne, 3x Webster, 3x Woodford, 2x Breathitt, 2x Carroll, 2x Estill, 2x Grayson, 2x Green, 2x Hancock, 2x Jackson, 2x Marion, 2x Martin, 2x Meade, 2x Rockcastle, 2x Taylor, 2x Trimble, 2x Wolfe, 1x Casey, 1x Edmonson, 1x Elliott, 1x Harrison, 1x Letcher, 1x McCreary, 1x Metcalfe, 1x Monroe, 1x Nicholas, 1x Powell, 1x Simpson
• New deaths by county: 68 M Hickman, 71 F Henderson, 77 M Floyd, 86 M Bullitt, 86 F Kenton, 85 F Floyd, 87 F Kenton, 93 F Belle
• Fast 4 at 4:
  • 1: Jobs Announcement: The latest company to join Kentucky's manufacturing sector is Chapin International, a manufacturer of metal compressed air sprayers based in Bavaria, New York.
  • 2: Vote!: So, as a reminder the deadline to register to vote is on Monday, October 5, visit http://govoteky.com/ for information on how to request your absentee ballot. Voting absentee is the safest way to vote this year because of COVID-19. So if you do not have access to the internet, you can call your county clerk's office to request your absentee ballot. The clerk's office will complete your absentee application over the phone with you. So that's an even easier step to be able to vote this year.
  • 3: PPE: As we all know PPE is a vital part of protecting Kentuckians during this pandemic and I am proud to report that, as of this week, our Department of Public Health warehouse has completed the stockpile. There is enough PPE in Kentucky for a 120 day surge.
  • 4: Mask Up KY
• Dr Stack: And then if you look at Kentucky, we had a nice long plateau, almost three months, at about 50 new cases per million per day. Then we surged up, and we have now reached a plateau of 150 to 160 new cases per million per day. But here's the challenge: the good news is we're not exponentially growing, the bad news is, if you were to draw a line against this, we have a general upward slope which means that actually over the last four to six weeks we're losing ground, it's getting worse as we go on.
• Dr Stack: The next thing is you have to get your flu shot. Flu spreads the same way can mask, you get your flu shot, there's a good chance we could shut down influenza this year. Again, if you're sloppy and careless it’s going to be impossible to know who has the flu and who has COVID, and people who are uncertain about their status are going to be subjected to a lot more needless worry, angst, and probably inconvenience, while they go through additional testing.
• Dr. Stack: if you have a cough, a cold, runny nose, a fever, chills: do not leave your house, do not go to work, do not go to school. This, of all years, is not the year to be casual and spread any kind of infection, because you know what? If you’ve got a cough and a fever people aren't going to assume you’ve got the common cold, they're going to be worried you have COVID-19. Don't do it, if you're sick, stay home. If you're sick enough to need medical care, contact your primary care provider and seek advice.
• Dr Stack: Please go get tested, now there's over 230 sites https://kycovid19.ky.gov
  • Northern Kentucky
  • Louisville
  • Norton (in Louisville)
  • Lexington
• Is the 15-minute test going to become available in KY? -- So the White House announced, I think it was yesterday, that it's going to be shipping a very large number of Abbott rapid tests, and there's another word that's in there, because there's been two types of rapid tests, to the country. It will be about 100 million more to the entire country. Kentucky will receive its portion based on our population. We are going to receive them all between now and December 31st.
• Will the state offer any further extension on renewals of driver's license similar to what was announced in July? That order expires September 30th. -- Yes. Tomorrow, I'll be signing an executive order that allows for people to renew their driver's license by a dropbox or by mail. You still have to renew it in one of those two fashions, all the way up to February of 2021. It doesn't automatically extend
• Do you have a progress report on the job Ernst & Young is doing on unemployment? -- We can provide- we will work on that tomorrow an update on E&Y's work on unemployment. It's been absolutely necessary to prevent us from falling further behind. We are gaining ground but there continue to be a significant number of claims that we are working through.
• Slides from Update

Full Notes

• Lt. Gov: Alright, good evening everybody. I'm going to kick us off today with the Fast 4 at 4, lots of good news to share.
• First is a jobs announcement. The latest company to join Kentucky's manufacturing sector is Chapin International, a manufacturer of metal compressed air sprayers based in Bavaria, New York. Chapin plans to invest nearly $5.5M, and create up to 100 full time jobs in the years ahead. The location will manufacture and distribute metal compressed air sprayers for industrial use, agriculture, home and garden, and other applications. This is a great project, located in Rockcastle County, Kentucky. Representatives from Chapin reached out to our local and state economic development teams just over two weeks ago, and the company has already found a home in an existing former manufacturing facility in the Rockcastle business park. This is a testament to Team Kentucky's dedication to helping businesses find the best fit for them, as quickly as possible. Kentucky's logistical advantages and ideal geographic location were major factors in our ability to bring Chapin to the Commonwealth. We are at the center of a 34-state distribution area in the eastern United States, with the existing infrastructure necessary for companies to ship products to customers as quickly as possible. It's one of the many advantages Kentucky offers companies, and we're glad to have the opportunity to help Chapin International business. Investments like this one from Chapin will help us to build a better Kentucky.
• Alright, second up is voting. As many of you know I'm a former civics teacher and so one of my favorite things to do was to talk to my students about the democratic process and how important it is to be a responsible citizen and vote. As we all know there is record turnout expected all across the country for the 2020 general election. And as a mom, it's very exciting for me because this is the first presidential election in which Emma, Will, and Nate will all get to participate, Evelyn is the only one that doesn't get to and she's only eight months old, so. Our family has engaged in many discussions about democracy and how lucky we are to live in this country at a time when we have the right to vote. So, as a reminder the deadline to register to vote is on Monday, October 5, visit http://govoteky.com/ for information on how to request your absentee ballot. Voting absentee is the safest way to vote this year because of COVID-19. So if you do not have access to the internet, you can call your county clerk's office to request your absentee ballot. The clerk's office will complete your absentee application over the phone with you. So that's an even easier step to be able to vote this year.
• Third, we have more good news about PPE. Kentuckians have continued to answer the call in the fight against COVID-19. It is this team Kentucky spirit that makes our home so special. I can tell you that spirit of unity, despite a global pandemic, is on full display through the Commonwealth from Paducah to Pikeville, and from Maysville to Monticello. Two weeks ago governor Beshear and I visited the Department for Public Health's warehouse to show the success in securing PP for frontline workers, and other Kentuckians. As we all know PPE is a vital part of protecting Kentuckians during this pandemic and I am proud to report that, as of this week, our Department of Public Health warehouse has completed the stockpile. There is enough PPE in Kentucky for a 120 day surge. Governor Beshear has talked about the time, earlier in the pandemic, when he spent days on the phone trying to secure PPE. He will tell you, he was not sure that this day would come. This is one of the successes for Kentucky in our battle against COVID-19. Our team has worked diligently to secure the protective equipment we need in our hospitals, in our long term care facilities, and other crucial frontline jobs. We appreciate those workers, our corporate partners, and everyday Kentuckians who contributed to make sure that we could reach this point.
• And last but not least, we're going to talk about Mask Up Kentucky and show some really good examples from across this Commonwealth of folks who are wearing their masks and doing the right thing.
  • So first up, we have a group of kindergarteners, who are social distancing during their PE class. And so this is an example of how even our youngest learners are willing to do their part, and they're willing to be leaders in their schools, so we appreciate that.
  • Next up, we have an example from a Knox County School where they have put a mask over their mascot, that says “Can't mask our pride” and we just really thought that this was a great example of that team Kentucky spirit so thank you Knox County.
  • Third, we have a picture of a workout from a University of Kentucky women's basketball team practicing for their upcoming season. They want to play, and they know that they have to be responsible enough to prepare in a safe and healthy way for their teammates, for their coaches, and for their supporters and so as a basketball coach that we might need to give some love to the women's basketball players in Kentucky.
  • And last but not least, not to be outdone, is a women's basketball practice at the University of Louisville. This is where the women's basketball team is trying to set a good example for all of us with their conditioning and that you can see that they're all masked. And I know that these women are far better athletes than I ever was, but it'd be really hard to work out and have a mask on at the same time, so I got to give them credit for going above and beyond to do the right thing, to keep themselves in shape, and to protect all of their teammates, coaches, and supporters. So thank you very much.
• Alright, thank you to our Lieutenant Governor. And today, continuing school pride here in the Commonwealth, I'm wearing Knox County Public Schools. This was sent to me by their Director of Communications with a really nice note talking about how their community had come together to fight for each other, to protect one another, and I love- this is this the line they have under their letterhead: “Inspiring leaders and changing futures one child at a time.” So thank you to Knox Public Schools. Also want to let you know we have a new member of our production team, who is Jim, who's helping us out here, moving forward, so now we have Kenneth at home. We miss you Kenneth. We don't miss the slides, but we miss you, James, who is here working on that and now, Jim as well. Now, I've known Kenneth for a long time, he'll take that in good humor or we'll find out about it on Twitter here in just a little bit.
• Alright, while that's good fun- today's COVID report is not.
• Today we are reporting our second highest total that we have had since March the sixth at 1,018.
• Positive cases today: 1,018 - What that means is that we are on pace to have even more cases than last week where we set a record number of cases.
• Probable cases: 8,312
• Total confirmed cases: 67,856
• Children Under 18: 157
• New cases by county: 226x Jefferson, 143x Fayette, 58x Laurel, 29x Warren, 28x Barren, 26x Christian, 26x Madison, 22x Hardin, 19x Calloway, 18x Boyd, 16x Rowan, 15x Kenton, 14x Henderson, 14x Scott, 13x Boone, 13x Franklin, 11x Carter, 11x Union, 11x Whitley, 10x Daviess, 9x Greenup, 9x Pulaski, 8x Bullitt, 8x Lincoln, 8x Magoffin, 8x Pike, 7x Bourbon, 7x Boyle, 7x Nelson, 7x Oldham, 7x Trigg, 6x Anderson, 6x Clark, 6x Garrard, 6x Hopkins, 6x Jessamine, 6x Logan, 6x Muhlenberg, 5x Campbell, 5x Grant, 5x Graves, 5x Harlan, 5x Marshall, 5x Morgan, 5x Shelby, 4x Adair, 4x Allen, 4x Bell, 4x Clay, 4x Floyd, 4x Hart, 4x Knox, 4x Leslie, 4x McCracken, 4x Mercer, 4x Ohio, 4x Perry, 4x Todd, 3x Breckinridge, 3x Caldwell, 3x Fulton, 3x Johnson, 3x Knott, 3x Larue, 3x Lyon, 3x Menifee, 3x Montgomery, 3x Owsley, 3x Spencer, 3x Wayne, 3x Webster, 3x Woodford, 2x Breathitt, 2x Carroll, 2x Estill, 2x Grayson, 2x Green, 2x Hancock, 2x Jackson, 2x Marion, 2x Martin, 2x Meade, 2x Rockcastle, 2x Taylor, 2x Trimble, 2x Wolfe, 1x Casey, 1x Edmonson, 1x Elliott, 1x Harrison, 1x Letcher, 1x McCreary, 1x Metcalfe, 1x Monroe, 1x Nicholas, 1x Powell, 1x Simpson
• Total tests conducted: 1,446,385 (PCR: 1,362,929, Serology: 55,904)
• Positivity Rate: 4.24% - That's a positive thing.
• Total hospitalized: 5,250
• Currently hospitalized: 589
• Total in ICU: 1,520
• Currently in ICU: 129
• On a ventilator: 81 - Please pray for those individuals
• Total recovered: 11,792
• New deaths today: 8 - Sadly we are reporting a loss of eight additional Kentuckians due COVID-19 or that COVID-19 was a contributing factor to their deaths.
• Total Deaths: 1,170
• New deaths by county: 68 M Hickman, 71 F Henderson, 77 M Floyd, 86 M Bullitt, 86 F Kenton, 85 F Floyd, 87 F Kenton, 93 F Belle
• Let's remember and think about those families, let's make sure we turn on our green lights, and let's also know when we have 1,018 cases it means we're going to lose more people moving forward. 1,018 cases is far too many. It does mean we're doing a lot of tests, and that's important; because we got to find those positives- we got to make sure that we can either quarantine them or get them the help they may need in the hospital, finding those positive cases, it helps make sure that we can get them better. But 1,018 cases is going the wrong direction. So, we need you to wear a facial covering. 1,018 cases ought to be a wake up call if last week's 5,000 almost 5,000 cases wasn't. We can't let this thing get out of control again because maybe we're tired. We know the steps that it takes and I think tomorrow we'll be back again with our revised top 10 rules to defeat COVID-19, because we probably need to talk about them more and again. But, but this mask. We really need you to where it really needs you to wear it.
• Racial breakdown of all cases: 80.32% Caucasian, 11.84% Black or African-American, 1.54% Asian, 5.80% Multiracial
• Ethnicity breakdown of all cases: 89.17% non-Hispanic and 10.83% Hispanic
• Racial breakdown of all deaths: 83.55% Caucasian, 12.80% Black or African-American, 1.12% Asian, 2.52% Multiracial
• Ethnicity breakdown of all deaths: 96.41% non-Hispanic and 3.59% Hispanic
• Long Term Care Facilities (PDF): 38 new residents and 23 new staff positive from yesterday, and 3 more deaths, 1 new facility.
  • Total facilities: 339
  • Total deaths: 670
  • Active cases: 576 residents, 437 staff
  • Total cases: 4413 residents, 2928 staff
• K-12 Update (PDF): 15 new students and 14 new faculty/staff positive, 12 new schools from yesterday.
  • Total facilities: 576
  • Active cases: 746 students, 348 faculty/staff
  • Total cases: 1138 students, 411 faculty/staff
• Again, this is our, our, our audited version, you're going to see the dashboard, which will have more up-to-date numbers, more immediate numbers, again remember our dashboard is what's reported by schools for the day before. It hasn't gone through the vetting of the local health department and through us but it's a way to have some immediate idea of what we may be seeing in your school or your community. And this is after it's gone through our process which can lag for five days.
• University Update (PDF): 303 new students and 2 new faculty/staff positive from yesterday, 3 new facilities.
  • Total facilities: 58
  • Active cases: 1374 students, 48 faculty/staff
  • Total cases: 3244 students, 87 faculty/staff
• I said yesterday that I believed we were at the start of a new escalation, we're certainly seeing that in today's numbers. That means we got to work harder. Now this is a war and we've won many battles. We can't walk away from the battlefield. We can't stop doing what it takes and I really need your help. In the Fall, and I think Dr Stack, who's back with us today after getting a week off, which I know is needed, will tell you that right now, moving into the fall, has the potential to be the most dangerous time we have seen in Kentucky. And it doesn't have to be, because we know that there is a vaccine in our future we just have to get to the point where we can prove that it's effective and deploy it to enough people. So are we willing to do what it takes to protect one another, until that point in time? I think that answer is yes, but we’ve got to prove it. Alright, I'm gonna ask Dr Stack to come up. He's got a couple of different things to come over to go over and then we'll answer questions.
• Thank you Governor, it's good to be back. And I know that the people watching this will appreciate it was nice to go somewhere where no one recognized me for a change. So, I enjoyed my time away. I have a few updates I want to go over, So I'm going to start with the schools. So, for K-12 schools yesterday was the first day that the self-reported data from the schools went live as a public dashboard. So this was a screenshot that I took before I came here, you'll see a huge spike up on the data on the right hand side, that's what you would expect. In the interest of clarity, the schools were asked to report yesterday, the 28th, data for the first 24 hours. So information reported them in the last 24 hours, I didn't want to- this was not a tag; you're it moment, I'm not trying to go back in time, we're going to get a new steady state as we go forward. So, people may have had folks in quarantine last week or new cases last week that won't be captured here, it's a snapshot in time and it's beginning on Monday, the 28th. As I understand that we have about 2,000 K-12 schools in the state of Kentucky, that's public and private, of those we have about 1,700 plus in our database so far. Those who are not in the database we're getting outreach and emails. Thank you, we appreciate that, and we expect it, and we will add you if your name is not presented the way you want it presented, we will update those things. So we're working through those details, but it just went live yesterday.
• We have over 1,300 schools who have reported data into this. So I'm satisfied that this is a good first step, but clearly when we're little over 1,300 reporting, when I just told you there's almost 2,000, we've got a ways to go. But for being only the second day that we've been doing this, thank you very much, I appreciate the effort. For those in the general public and for those who work in schools, K-12, this is a tool for you, more than anyone else. So we have other surveillance tools that I'll use for public health and I will definitely look at this but this is for the public. For those of you who have children in K-12 schools, you should be able to go here, you should be able to find your school by name, and you should be able to find the data that they've reported. If you don't find data here, I encourage you to call the school and ask them and enquire and work in partnership with them. Remember we get through this better if we work together. No one wins when we're pointing fingers at folks. This is all about trying to be honest, as open as we can, acknowledging the data, as we understand it, and being honest about that, and working together in good faith. So this is a tool for the public to try to help you be informed, at least in some closer to real-time situation as to what's going on in the school. We will report that the dashboard will update every morning with data from all the way through the previous day. And that's how that will be updated, and we'll go from here and see how that progresses over time,
• Those of you who saw me discussed this a couple weeks ago will recognize this. This is the color-coded metric-based dashboard for schools to determine the mode of instruction they should be in for school. The way this works, you're supposed to look, if you're a superintendent or someone responsible for school, every Thursday we recommend it at eight o'clock at night because we update this around dinnertime or late afternoon every day. You look Thursday evening at the map that we have on our website, I didn't put the map in here, it's published right on the main page of the website every single day, you match the color of your county to the color on this map, it's that simple, and then you do the things that are down the column. Now those are recommendations and folks have asked for these recommendations or these requirements. So, the reporting I just talked about, and a metric along these lines, part of this comes from a KRS statute that talks about how schools behave during epidemics. This is all to give public health guidance so that superintendents can decide whether to have their students in person, virtual only, or hybrid instruction, and there are instructions and guidelines down there and a wealth of KDE documents. The Kentucky Department for Public Health continues to work with the Kentucky Department for Education so thank you for that partnership. We did make one change to this today, and this rests with me. I did not like that in some states, they used a 14 day criteria that when they closed to in-person instruction, they had to shut down for two weeks. I wanted to use the metric as much as possible to guide decisions to open and close and not pick, you know, an arbitrary number of 14 days. So I put in there, instead of a 14 day metric that when you hit the red level which is a very high level of disease that you had to get back down to yellow before you should consider resuming in-person instruction. I described that as Chutes and Ladders you hit a long chute and if you remember that game and you went down a couple levels. I have removed that part so now you just follow when you check on Thursday night whatever color, your county is what you should do for the following week, and you don't have to get back down to yellow. I have said from the beginning, it is not our intent to strand people in the wrong categorization. The tool is intended to identify when the disease is particularly active in your community, the entire community, that involves K-12 schools but it also involves nursing homes, and businesses, and also restaurants, and bars, the whole community has to come together- it's a community based problem, and the community has to come together to do what needs to be done to improve the situation. So the one change we made today was you don't have to go all the way back down to yellow to consider resuming in-person instruction. But we do strongly urge you to read everything that's on there, follow the guidance that's posted. And I have to place this in context before I go to my next slide. We have to take this seriously folks, it's about to get colder, people are going to go indoors more, the disease is still out there. Every place, every place on the planet Earth where people have gotten lazy and lax about following the things we recommend has seen a surge in disease, every place. And we've had some improvements in hospital care and some improvements in treatment, but we have not had any massive breakthroughs. So we are in a position where if we take our eye off the ball, we're gonna get in trouble real quick, and I'll make that point on the next slide.
• So you've seen me use these, those of you who watch these briefings on a regular basis, over and over. This is from the 91-Dovic, the COVID-19 backwards website. And what it shows is, adjusted by population, the number of new cases per million people in your state on the seven day rolling average. So if you look New York got smacked hard and badly at the beginning, in fact to this day it's one of the areas that was the hardest hit in the entire United States and probably in the world, other than maybe Wuhan in the very beginning. New York has still managed to keep their disease burden relatively low, but even New York is still running that line down there, I think it’s at 50, so it's still running active disease, but it's much more suppressed. If you look at Kentucky, we're at about 152, now actually 160 new cases per million people per day. You’ll have to take my word on this, is really hot, that's running very hot. Remember this is a disease that when it gets out of control it starts to double rapidly. And so, the little simple math here you go from one to two to four to eight to 16 those numbers are still relatively small. When you go from 150 to 300 to 600 to 1,200 those are big numbers. So as you start getting those bigger numbers, that's more people sick, and after people get sick, hospitalizations follow, and after hospitalizations, that's when you can have deaths. And so what I put in here is New York as the red line. Who's relatively well controlled by comparison, if you were looking at Germany, on a different map- I can't put those that I found yet on the same map, countries and the States. If you were to take Germany, New Zealand, South Korea places that have lowered the disease and really kept it there, they would belong down near that black line at the very bottom. They've controlled the disease so well that in that country- if you didn't follow the rules you could walk out in public and you'd have a very low likelihood of getting sick but the reason it's that safe, is because they followed all the rules and they kept things closed down so that people in those countries are remarkably safe. But it's because they have very strong adherence to the things we're recommending be done. So, the US overall is the orange line. And if you look, we had a surge in the beginning, and a plateau and a surge and then it came back down and now it's on the upswing. I don't remember the latest data but as recently as the last 48 hours there were at least 26 states who are having a noteworthy positive increase in cases.
• And then if you look at Kentucky, we had a nice long plateau, almost three months, at about 50 new cases per million per day. Then we surged up, and we have now reached a plateau of 150 to 160 new cases per million per day. But here's the challenge: the good news is we're not exponentially growing, the bad news is, if you were to draw a line against this, we have a general upward slope which means that actually over the last four to six weeks we're losing ground, it's getting worse as we go on. And it's getting worse at a time that schools are going back into session, colleges and universities are in session, bars and restaurants are open. Remember we said we tried to take a multifactorial decision making approach to this, we looked at a lot of different things, we recognize the importance of the economy, and people's wellness, and being at work, and activities, but we can't afford to let this get out of control. Here's the thing for those who like casino metaphors, the house always wins. So here's the thing: people may flaunt the rules and disregard the rules and you know what? You may luck out, and it may work out okay. But the bug, the virus, is the house here. I don't know what county, or what city, or where, but if we ignore the rules someone's going to get bitten and they're going to get bitten bad. I don't have to guess on that, I can tell you that with absolute certainty: Everywhere that people got sloppy the virus got out of control and took a lot more lives. So please, when I talk about these wrap up points I'm going to make here, please take this seriously. I hope you've seen over the last six to seven months, we have gone through a period in the spring where there was so much we didn't know, and there was legitimate reason to be terrified of what could happen. And now we've gotten into this phase where we know that if we take certain simple steps that we can control the spread of the disease. Now people are really tired of this, they're fed up with hearing about this stuff, and they want to get back to their lives, but I'm going to tell you, that's not happening until we get to some time next year and probably not until past the summertime, because even when we get the vaccines- and I'm glad that things have gotten revised at the federal level because now it's aligning with what I was saying for weeks before, is that we're not going to have sufficient amount of quantity of vaccination materials to get everybody until we get to the summer or beyond next year. Hopefully we'll get something in late December or early January, but it'll be a small amount and it will be for the highest risk or highest targeted individuals, and then we'll move forward from there. And when we get to a better place where we have more information and it's appropriate we'll update you on vaccination plans, which we're actively working on too. But until then, we've got to wear masks, we have to physically distance more than six feet, you have to wash your hands. You've got to do three other things, if you have a cough, a cold, runny nose, a fever, chills: do not leave your house, do not go to work, do not go to school. This, of all years, is not the year to be casual and spread any kind of infection, because you know what? If you’ve got a cough and a fever people aren't going to assume you’ve got the common cold, they're going to be worried you have COVID-19. Don't do it, if you're sick, stay home. If you're sick enough to need medical care, contact your primary care provider and seek advice.
• The next thing is you have to get your flu shot. The United States apparently ordered 200 million doses of influenza vaccination this year which is higher than the 170 million they did the year before and even that was apparently a peak of sorts. You have to go out and get your flu shot. Let's make sure we use all those doses and force the government to order more of them, because if you get the flu shot, it's going to reduce the burden of flu. And if you wear your mask you know what? Flu spreads the same way can mask, you get your flu shot, there's a good chance we could shut down influenza this year. Again, if you're sloppy and careless it’s going to be impossible to know who has the flu and who has COVID, and people who are uncertain about their status are going to be subjected to a lot more needless worry, angst, and probably inconvenience, while they go through additional testing.

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