Lilium, Saturn Oil + Gas, D-Wave Quantum – Big opportunities in the new stock market year

Lilium – Year-End explosion

The saying "there is life in the old dog yet" can be applied once again to the insolvent electric aircraft manufacturer Lilium. After the air taxi startup had to file for insolvency in October last year, Lilium announced in a press release on Christmas Eve that it would continue operations with the support of an investor consortium.

Lilium will receive EUR 200 million in fresh funds from MUC (Mobile Uplift Corporation). The sum is intended to help the Company bring the small aircraft to market maturity. The investor consortium signed a purchase agreement for the operating assets of the two subsidiaries, Lilium GmbH and Lilium eAircraft. However, the EUR 200 million is not the purchase price. In the past, the Company, which was listed on the Nasdaq US technology exchange until its bankruptcy filing, received approximately EUR 1.5 billion in funding.

Although the creditors' committee of the Lilium holding company has already consented to the sale to MUC, several legal steps are still necessary. These are mostly formalities. However, the decisive creditors' committees of the two Lilium subsidiaries must first be appointed by the Weilheim District Court before they, too, can consent to the purchase agreement.

The electrically powered aircraft, often called "air taxis", are versatile.

In addition to their potential use in urban transport, they could also be used as air ambulances for medical emergencies. Lilium's shares rose more than tenfold within three trading days, soaring from an all-time low of USD 0.0238 to USD 0.35. An investment, however, is not advisable due to the still considerable uncertainties.

Saturn Oil & Gas – Clear Goals

In the wake of Russia's invasion of Ukraine on February 24, 2022, oil prices began to rise. The West Texas Intermediate (WTI) variety exploded to USD 131.06 per barrel. Since then, the oil markets have been on a downward trend that could end in the range of USD 67 per barrel. This consolidation plays into the hands of the energy company Saturn Oil & Gas, which recently announced its change of jurisdiction to Alberta. The Company will continue to identify undervalued assets and acquire them opportunistically.

According to CEO John Jeffrey, the focus remains on increasing the free cash flow. This, in turn, promotes a systematic reduction in the debt ratio, supports opportunistic acquisitions and enables the Company to further improve the key figures per share.

In addition to pursuing core business acquisitions, Saturn Oil & Gas also aims to support long-term sustainability and maximize buybacks under the current share buyback program. According to the Canadians, the budget for development investments in 2025 is CAD 300-320 million, with a stable production forecast to average 38,000-40,000 boe/d.

The Saturn Oil & Gas share price has stabilized significantly after a brief dip below the CAD 2 mark and is currently trading at CAD 2.23, just below the prominent resistance level at CAD 2.32. If this level were to be broken, the next short-term price target would be in the CAD 2.50 range.

D-Wave Quantum – Bubbles ahead

While AI stocks like Nvidia and Super Micro Computer soared to new heights in the past stock market year, quantum computing stocks are now considered the next big thing for the next 12 months. And one is reminded of the dot-com boom at the turn of the millennium. The shares of the Canadian company D-Wave Quantum, which specializes in the development and distribution of quantum computers, have risen by more than 1,000% to USD 11.33 since the beginning of November, with a current market capitalization of a whopping USD 2.46 billion.

It should be noted, however, that the Company's revenue for the full year 2023 was just USD 8.76 million, while its net loss was USD 78.17 million.

As echoed by several analyst firms, great caution should be exercised regarding the current hype. Paul Meeks, Chief Investment Officer at Harvest Portfolio Management, emphasizes: "Any evidence that impacts the financial world is still far, far, far in the future. What will they use it for, and is it really a money-maker?"

It will be many years before the industry can be monetized. Identifying the eventual winners in this first wave of speculation is still tricky.

The air taxi company Lilium is receiving a cash injection of EUR 200 million to help bring its products to market maturity. Quantum computing stocks such as D-Wave Quantum tend to form bubbles. The oil producer Saturn Oil & Gas is optimistic about the future and is focusing on continuous margin improvements through cost optimization, synergy exploitation, and operational streamlining.