THE ALTUCHER REPORT. The Pre-IPO Prospectus

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1 The Pre-IPO Prospectus

2 The Pre-IPO Prospectus For years now, regular investors have been locked out of the fastest-growing private startup of all time. I ve been following this company closely for four years, gathering data from my vast network of insiders in Silicon Valley. I ve seen early investors make billions. But until now, profiting from this golden goose has been off-limits to 99.9% of Americans Finally, I ve developed a strategy that will allow the little guy to turn the average retirement account into $588,000 or more in the next 12 months alone. Even better because this isn t one of those traditional prospectuses that investment banks use to raise funds, anyone can participate. You don t need to be an accredited investor or a venture capitalist... All that s required is that you act fast before this company goes public. For most companies, the private stage is the fastest and most profitable stage of growth. And when it comes to growth, nobody comes even close to this startup. It s growing faster than Google. It s growing three times faster than Facebook. It s even growing faster than Amazon. 2

3 In less than a decade, we ve already seen over 900,000% gains from this startup. I don t know of any other asset that could grow your wealth so fast. And as impressive as these gains are, they re nothing compared with what s coming The Most Valuable Startup in the World I have no doubt that you ve probably heard of this startup before. After all, you don t get to be one the most valuable private companies in the world without making some waves. In fact, it s rare to even go a week without seeing the name of this super startup in the newspapers. If you haven t guessed by now, I m talking about Uber the ride-sharing app that s spread like wildfire across the world. Since Uber first made a splash in San Francisco in 2009, it s expanded to 400 cities in over 60 countries across the world and it s made its investors billions. Don t worry if you re not already making a fortune on Uber in the private market. It s not your fault. Unless you re one of Silicon Valley s privileged insiders, you hadn t a snowball s chance in hell of getting in on this pre-ipo investment. Of course, this is nothing new. The IPO game has always been rigged against the little guy. The fact is the real money is made before companies go public. Take Facebook, for example. If you bought shares of Facebook after the IPO you d be up 368% today. 3

4 Not bad, sure. But that s nothing compared with the gains the insiders pocketed before Facebook went public. Because while the little guy was paying $42 a share after the IPO, the Silicon Valley insiders were getting into Facebook when it was trading for just $1 on the private market. With Facebook s gains, one of those dollars would be worth just under $42,000 today that s a return of 4,199,900%. The regular investor could only dream of those returns, right? Well, with my pre-ipo strategy, I ve found a way to use those restrictions to our benefit and piggyback on Uber s growth before it goes public. But we don t have much time I ve already heard rumors that Uber is getting ready to file its IPO paperwork with the SEC Once that happens, it will be front page on The Wall Street Journal. And it will already be too late. The insiders will have pocketed all the biggest and fastest gains by then. And the little guy will be left with the table scraps once again. That s why I m so excited to tell you about my pre-ipo strategy to profit off Uber s growth. This opportunity is enormous. And it has everything to do with tech being developed here The Pittsburgh Project At Uber s Pittsburgh facility, scientists are already working on a project that s set to tap into $15 trillion in future wealth. Right now the tech being developed at this facility is on track to disrupt several multi billion dollar industries mint hundreds of new millionaires 4

5 across America and even save 1.2 million lives each and every year. Plus, a study at Columbia University predicts that the Pittsburgh Project will make transportation available to thousands of people, on-demand, in just 36 seconds at an incredible cost of 50 cents per mile! That s more than eight times faster and almost six times cheaper than taking a cab. Indeed, transportation will be so immediate and cheap that many people will choose not to own a car. When you can go anywhere for pennies on the dollar, you won t just be saving money on cabs. You won t be paying for insurance gas or maintenance! The Tech Behind the Revolution It sounds pretty incredible, huh? Well, it s all thanks to a small sensor that will sit on top of cars. These sensors can see other cars, lane markings, road signs, even bikers and pedestrians. Engineers at Uber have figured out how to connect those sensors to systems that control a car s steering and pedals... So now this technology can guide a car safely around the roadways without the use of a driver. That s right. Uber is about to launch a national on-demand network of autonomous vehicles. This technology could result in a $5.4 billion savings that could be distributed as pure profits for its investors. With these sensors, transportation companies will be able to eliminate their largest expense drivers. 5

6 Better yet, self-driving cars are capable of working and collecting revenue 24 hours a day, seven days a week. If you live in Pittsburgh, you may have already seen some of these vehicles cruising around. Tests have already been putting self-driving vehicles on the road since In fact, in just one year, Uber s driverless vehicles logged over 1 million miles in 30,000 trips And with each trip they re getting better at driving Source: Pittsburgh Business Times Because every time driverless vehicles hit the road, they collect more data about traffic patterns road conditions and how to handle specific situations. Uber knows the game changer it has on its hands and expansion has already begun. The Pittsburgh Project expanded into Arizona earlier this year and will continue to grow at an even faster rate. Now that this company s self-driving cars have proven themselves safe, they are about to spread like wildfire. The Future of Logistics Of course, the applications for this technology go far beyond affordable cab rides. With this technology, this private company is capable of moving anything, anywhere, on demand. It s going to dominate the entire $15 trillion worldwide logistics market. According to Wired, The American Trucking Association pegs the shortfall 6

7 at 48,000 drivers, and says it could hit 175,000 by So self-driving cars have a unique opportunity to cash in big for investors And supply all that demand with a fleet of their driverless trucks. This technology is going to be world-changing. And Uber is going to enjoy unprecedented growth because of it. But here s the thing For these driverless cars to reach their full potential, they are going to need more than just a state-of-the-art sensor. They need to be able to find the quickest route with the least amount of traffic They need to be able to recognize and talk to other driverless cars in their vicinity They need to be constantly transmitting diagnostic data back to the manufacturers so that nothing goes wrong unexpectedly And to do all of these things, they need to be connected to the internet ALL THE TIME. That s where my pre-ipo strategy comes in. Let me explain A Backdoor Play on Uber Right now we re on the verge of a major new wave of progress where objects will connect and interact with each other. And it s not just driverless cars Everything from your toaster, television and alarm system to fitness bands and thermostats will all be connected to the internet. They will collect, exchange and share millions of data points at super-fast speeds. And you ll be able to control it all from your mobile device. 7

8 Machines will be connected, too. Airplanes, trains, factory machines. These machines will eventually be able to tell us when certain parts need maintenance. How they can operate more efficiently. And ultimately how to create a safer environment and increase productivity. It s all part of the internet of things (IoT) megatrend. And this idea isn t as new as you might think. The goal of smart, interconnected objects actually dates back to well before the development of the internet itself to the early days of digital technology. Just check out what early electrical engineer Nikola Tesla wrote in Collier s magazine in 1926: When wireless is perfectly applied the whole Earth will be converted into a huge brain, which in fact it is, all things being particles of a real and rhythmic whole And the instruments through which we shall be able to do this will be amazingly simple compared with our present telephone. A man will be able to carry one in his vest pocket. This perfectly encapsulates the dream and the (now) reality of the IoT. There s still work to do, though. Right now, according to networking giant Cisco, more than 95% of the physical world is unconnected, meaning it s incapable to talking to the web. This includes most of our cars right now, of course. Along with almost everything that uses a battery or plug. These unconnected items are isolated in ways that our smartphones, laptops and fitness trackers are not. Think of the opportunity to get all of these devices online and up to speed! Cisco predicts that as many as 50 billion of these unconnected things will be connected to the internet by

9 Think about that number for a second The world s population is just over 7 billion people. So we are talking about more than seven times the world population. And these devices are coming online in the next two years. With that type of rampant growth, it s easy to see how the IoT could become a $19 TRILLION market opportunity. To put that into perspective, that s like combining the market cap of every single company in the S&P 500. Even if the market only succeeds in reaching half of Cisco s predicted value, the opportunity will still be enormous. That s why some of the largest tech companies are getting in on this trend, including industry leaders like Microsoft, Intel, Google, Qualcomm, Apple and several of the world s richest investors. Then there s Uber. The company s push toward driverless cars will create a massive need for IoT technology. In fact, the company s continued success is directly linked to the expansion of IoT. So much so that investing in the burgeoning IoT market is like finding a backdoor play on Uber before the company s IPO. And that s exactly what we re going to do. More on that in a second... First, let s take a deeper dive into IoT and why it s so crucial for the next stage in tech evolution. The World s Largest Ecosystem The term internet of things is described in numerous ways. Some consider it a new technology. Others consider it just the connection of existing devices. But it s much more complex than that. 9

10 You see, the IoT is an ecosystem. It s not just about the connectivity of billions of devices. It s about collecting and interpreting massive amounts of data from all of these devices (at super-fast speeds) to help us become smarter, more efficient and more productive. It can help Uber s self-driving cars find the quickest routes, control traffic lights to cut back on energy costs and reduce waste management costs with sensor-equipped garbage cans. Just look at what the IoT has done for Union Pacific, one of the largest railroad operators. Union Pacific now uses traction sensors to connect to its 3,000-plus locomotives in operation each day. It can now monitor bearings to measure vibration, tanker valves to measure pressure and even the doors to determine if someone is trying to steal expensive cargo. Millions of health care machines are now connected to the internet as well. For instance, CT and MRI machines are now able to upload scans to the cloud for analysis. 10

11 This massive network allows people to store, analyze, share and access their data in real time. It provides much faster and better analytics at much lower costs. Surgeons can immediately access this information when patients are in critical condition or are suffering from severe trauma. It s not all about improving businesses, though. Another big part of the IoT is the evolution of the smart home. I alluded to this before. But soon, every television, security camera, radio, thermostat, washing machine, refrigerator and anything electronic in your home will be connected to the internet. That means you ll be able to turn the coffee machine on from your mobile phone, activate your security system from 100 miles away and control the temperature of your house remotely to make sure it s nice and cozy the second you walk in the door. As you can see from the graph below, almost every industry is increasing its exposure to the IoT and investing billions of dollars into this massive trend: More importantly, each industry is projected to drastically increase spending on IoT solutions starting this year. This is highlighted in purple, light blue and orange in the picture above. 11

12 This tells us two things: The IoT megatrend is still in its infancy, and most of the big spending will come over the next few years as this grows into a multi trillion dollar industry. And there is still time for investors to make big money as this gets started. That leads me to my favorite IoT investment right now Buying the Bridge That Connects Billions of Devices Cypress Semiconductor (NASDAQ: CY) makes the components that will help connect our devices to the internet. Just a few years ago, Cypress stock traded at over $23 per share. But following slow growth in some of its markets, the stock now trades at closer to $18. Cypress has made big changes since the dip in its share price, however. It cut millions in expenses, improved margins and is now a major player in some of the biggest growth markets in technology. I m talking about wearables, smart factories and most importantly connected cars like Uber s driverless fleet. One of Cypress game-changing deals came in April 2016 when it acquired Broadcom s IoT division for $550 million. Broadcom was forced to sell this division during its megamerger with competitor Avago. That move instantly elevated Cypress to the world leader in Wi-Fi and RF (radio frequency) technologies. Without getting too technical, these technologies are needed for almost any device to connect to the internet. Better yet, this acquisition also added to Cypress already large automotive platform. It is now focusing on the fastest-growing segments within the automotive industry, including driverless cars. In fact, Cypress is a preferred supplier to the world s top 25 auto companies. 12

13 As an added bonus, Cypress is also a major supplier of devices needed to connect your home (see below). Source: Cypress Looking at the Fundamentals Cypress currently trades at just times forward earnings. That s a 27% discount to the S&P 500. Yet Cypress is expected to grow earnings by 49% this year, 2.5 times faster than the overall market. These enormous growth expectations are the direct result of Cypress going all in on the IoT. Cypress is a leader in the market of connected gadgets. Its products can be found in some of the most prevalent devices, including the Nintendo Switch, Amazon Echo devices, Google s Nest thermostats, Apple AirPods and many other connected devices including drones, wearables and surveillance equipment. But its dominance in the auto industry is what makes it such an attractive play on the self-driving auto market. The top eight original equipment manufacturers in the auto business are using Cypress wireless technology. Cypress announced partnerships with Toyota in July 2017 and Audi in April

14 And the company just showed off two new automotive solutions at the Consumer Electronics Show in Las Vegas in January 2018, including a chipset that enables multiple passengers to connect and stream unique content to their devices simultaneously and a fast-response touch screen geared toward the next generation of car infotainment systems. Its dedication to the auto industry is certainly paying off According to CEO Hassane El-Khoury, the company s decision to focus on the fast-growing automotive, industrial and consumer markets fueled by the proliferation of IoT contributed to strong revenue growth and earnings growing more than four times revenue in As more companies like Uber require connected cars, Cypress profits will only go up from here. Cypress is also one of the most shareholder-friendly companies in the chip industry. Since 2008, management returned over $4.7 billion to investors through dividends and buybacks a huge number for a company with a $6.41 billion market cap. The company generated $350 million in free cash flow in 2017, enough to cover its generous 2.49% yield. That s nearly 37.5% more yield than you d receive from the average S&P 500 company. Of course, it s not all good news, and Cypress does face some potential risks. The adoption of smart cars could slow, resulting in fewer orders, and growing competition from other IoT chip companies could eat into its lead in that market forcing the company to offer discounts that could hurt margins. But as of right now Cypress is one of the few chip companies that is undervalued, pays a large dividend and has enormous growth potential. The IoT is the biggest trend in technology, and Cypress is starting to take substantial market share in this potential $19 trillion industry. Bottom line: The big gains in Uber have already been made in the private market. But there s no question that the next stage of Uber s growth will 14

15 be in the driverless car space. So semiconductors which are vital to the success of self-driving cars offer the best backdoor way to play Uber growth over the next few years. And with Cypress dominance in the sector, I m convinced that the stock has at least 100% upside potential over the next months. Longer term, we could see shares more than triple as the company becomes one of the dominant players in the IoT. Cypress Semiconductor (NASDAQ: CY) Buy-up-to price: $19 Fair value per share: $25 right now, $35+ long-term Position size: 3% of total portfolio Exit strategy: Sell half once it hits fair value and let the rest ride long term. The company should continue to generate solid earnings, as the IoT is a multidecade trend that is just getting started. We welcome comments or suggestions at feedback@chooseyourselffinancial.com. This address is for feedback only. For customer service inquires please Support@chooseyourselffinancial.com. or call (844) Please note: The law prohibits us from giving personalized financial advice. Choose Yourself Media. All rights reserved. Any reproduction, copying, or redistribution of this report, in whole or in part, is strictly prohibited without written permission from Choose Yourself Media. Choose Yourself Media forbids its writers from having a financial interest in any security they recommend. All employees of Choose Yourself Media, other than writers, must wait 24 hours after a recommendation is published before acting on that recommendation. Choose Yourself Media does not recommend or endorse any brokers, dealers, or advisors. This work is based on SEC filings, current events, interviews, corporate press releases, and our own personal networks. It may contain errors, and you shouldn t make any financial decisions based solely on what you read here. 15