After spending a weekend in the Poconos and being introduced to the AfterShokz Aeropex (their standard model on Amazon) by a friend who let us try and play with one I was interested. Then I received the set that I ordered from Amazon yesterday and I was sold. The packaging was perfect and it felt like unboxing an Apple product, which made me ask: How do I invest in this company? I don’t have connections to anybody that has access to venture capitalism. I’m just a simple person with an Internet connection and maybe you are too (you probably are).
Not only did they have an amazing product that relies on groundbreaking technology and there was organic growth through word of mouth, but they also understood what a consumer wanted and how to give it to them. I did a quick search and discovered that the company is still private and they only rebranded in 2021 and moved their headquarters to a big city in 2020. This immediately made me think of Beats by Dre before they were bought in a landmark purchase by Apple in March of 2014 for 3 billion dollars. If any company can appreciate a good consumer product, its Apple.
If I’m remembering correctly Apple had somewhere around 100 billion dollars cash on hand in 2014 when they bought Beats. A quick search says that they had 195.57 billion in January 2021. So to answer my original question: how do I invest in the private company Shokz (the name of the rebranded company)? The only answer I could think of is Apple call options. Taking a quick look at Apple stock prices for the last year, one notices a 160 dip within the past six months. The stock price is currently sitting at 172.90 and the company reported earnings on January 27, 2022 when it reported good earnings on the back of iPhone and App store growth.
If Apple were to buy Shokz, they’d most likely hash out a deal in Q2 which would set them up for a strong back to school and holiday season in Q3 and Q4 and they’d most likely pay anywhere from 1–4 billion for such a hot product and effective team. My recommendation would be to wait for a dip back to 160 before buying call options for 190 that would expire at the end of Q2 and set the sell price to be a little less than what you bought them for.
If you end up doing this or have any thoughts on the matter feel free to contact me via Twitter (@best_erichou). Good luck!
Disclaimer: I don’t actively invest and these are only my opinions.
