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Roberts Space Industries ®






November 20th 2019

KAIZEN: IAE Anticipation

IAE Anticipation


Welcome to Kaizen. I’m Aaron Schere, bringing you the latest lowdown on high finance. Today, I’ll be talking with aerospace analyst Scottie Bressler about the upcoming 2949 Intergalactic Aerospace Expo. But first, it’s time for a brief Market Breakdown.

Past performance is not indicative of future results. Neither Schere, Kaizen, nor Farnes Media Partners guarantees any specific outcome or profit. Before acting on information in this program, you should strongly consider seeking advice from your own financial or investment adviser.

This week investors turned their eyes to Bremen to track a lawsuit that’s pitting two of the UEE’s biggest food conglomerates against each other. Goss-based Prarad Naturals, best known for Twyn’s Sandwiches, filed a lawsuit to stop a recently passed Bremen law that cuts the system’s export tax on processed food. Francine Udell, a lawyer for Prarad Naturals, claims to have documents showing that executives from Bremen-based Terra Mills colluded with local politicians to write the law so it would benefit their company while hurting Prarad Naturals. Local lawmakers named in the lawsuit and a representative from Terra Mills both vehemently denied the allegations.

Prarad is up in arms after recently purchasing large swaths of land in Bremen to supply their processing facilities in Castra and Vega. The new law taxes processed food at a lower rate than raw commodities. Prarad claims that this puts them at a distinct disadvantage. Terra Mills processes most of their food in-system, so those shipments would be taxed at a lower rate than Prarad’s unprocessed agricultural commodities. They believe the law was written this way to provide Terra Mills a clear economic advantage within the system. Local politicians deny any favoritism toward Terra Mills and claim the law’s sole intention was to encourage companies to move food processing facilities into the system and spur stagnant job growth.

Experts anticipate a lengthy legal battle. Faced with this uncertainty, markets currently show both brands down slightly.

Next, Anvil Aerospace’s revised quarterly projections predict a downward turn after a series of supply chain disruptions forced them to temporarily shutter several manufacturing facilities in Castra. According to Scottie Bressler, an aerospace analyst with the Botero Group, this unexpected setback only increases the pressure on Anvil to deliver a strong showing at the 2949 Intergalactic Aerospace Expo. Scottie Bressler joins us now to discuss Anvil’s announcement and the upcoming IAE. Welcome back to Kaizen.

Scottie Bressler: Glad to be back. There was already so much to talk about before Anvil downgraded their projections.

So that was a surprise to you?

Scottie Bressler: I heard rumors about a slowdown but didn’t expect it to be to that extent. It’s good they’re being upfront about it, but it’s also concerning. With the IAE only days away the release feels strategically timed to get lost amidst all the news about to break.

You don’t see this release putting Anvil in a tough spot at the expo? Maybe forcing them to answer questions about production problems instead of promoting their ships?

Scottie Bressler: Look at is this way. If they release this news after the expo, then the story has legs. Release it during the expo and they have to address it. But releasing it now means the story will vanish quickly and can be deflected as ‘old news’ if brought up at the expo. Considering the options, this is definitely the best way to bury the lead, so to speak.

How concerned should Anvil investors be right now?

Scottie Bressler: My recommendation would be to not forget about this report. I’ve been bullish on Anvil lately. They’re the official sponsor of this year’s CitizenCon, and I expect them to put on an impressive show both there and at the IAE immediately after. It’ll be easy to get caught up in the hype, but regardless of their showing, I might have to adjust my outlook if they don’t convince me that these supply chain issues have been addressed.

On the subject of the IAE, let’s move on to a rumor that Crusader Industries almost skipped this year’s expo. Ultimately, they did decide to participate, but the prospect of them avoiding such a large event for the industry left many investors scratching their heads. Any idea what would drive a major manufacturer to even consider missing out on the biggest aerospace event of the year?

Scottie Bressler: Yeah, on the surface it sounds crazy, right? The IAE provides spacecraft manufactures a chance to drum up a ton of publicity and interface directly with consumers, many of whom might never just walk into one of their showrooms. But, in reality, companies invest a lot of time and resources into their IAE appearance. Some of the costs are obvious, like shipping whole fleets or finding lodging for employees, but there are also a lot of big-ticket items that most folks wouldn’t think about, like marketing or the elaborate booths themselves. Even security costs can be high, not only to protect the ships in transit, but to also ensure that news about whatever expo showstopper they’re planning doesn’t leak beforehand.

Do you think trying to avoid competition could come into play? Rumor has it that several manufacturers might have some announcements up their sleeves.

Scottie Bressler: For sure. Even though all eyes in the Empire might be tuned to the expo for the week, there’s no guarantee you can hold their attention when it seems like each day brings something bigger and better.

So as an analyst, it wouldn’t worry you to see a massive manufacturer avoid the IAE?

Scottie Bressler: No, it would definitely worry me although I would want to know why. I’d be a little less concerned if the manufacturer made ships with specific industrial roles where they might be better served at more targeted industry events, but I’d still want to understand the justification for avoiding the biggest ship spotlight around.

Thankfully, Crusader will be attending this year and won’t have to answer to you. Real quick, what are you most looking forward to at the expo this year?

Scottie Bressler: Gotta admit, I’m excited that Jax McCleary will be there. As a ship enthusiast, I always find his perspective on things to be very funny and entertaining, and as an industry analyst, I have to acknowledge that his opinion holds a great deal of sway with the general public. Whether or not he likes a new ship can definitely affect its success. I wouldn’t be doing my job if I wasn’t factoring that into my outlook.

We need to take a quick commercial break. Aerospace analyst Scottie Bressler isn’t going anywhere and neither should you. Keep it dialed into Kaizen for more insight on what smart investors should keep an eye out for at the upcoming Intergalactic Aerospace Expo, right after this.

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