Matt McCall is out with a new teaser pitch for his McCall Report ($49 first year, renews at $199), the entry-level letter in his suite of products at Stansberry, and, as always, he’s the “optimism guy” when it comes to revolutionary new technologies — which might be a little hard to take this month, during a collapse of almost all growth-focused stocks and “future idea” stories, but, well, we all need a little optimism… right?

And the bait to lure potential subscribers is his pitch that he’ll reveal to you “The Rolls Royce of Air Taxis,” the company that is his favorite in the world of “V-tolling”.

Sound a little familiar? Yes, the general pitch is very similar to past pitches about Vertial Take-Off and Landing (VTOL) aircraft, particularly electronic versions of those aircraft that will be able to replace helicopters with something faster, quieter and more efficient, and serve as air taxis in semi-urban areas, with the examples often being the heavily-populated areas like New York City or San Francisco, holding out the promise that like the uber-elite taking their helicopters to the Hamptons for the weekend, you could get a VTOL taxi from Manhattan to LaGuardia and have it take ten minutes instead of the hour taxi ride… and at a similar price.

It’s almost irresistibly exciting to think about, who wouldn’t want that? And SPAC-mania last year meant that half a dozen of the companies who are trying to build these aircraft and provide that kind of air-taxi service are now public… so it’s probably one of those folks that McCall is pitching.

Here’s how the ad gets started:

“Get Ready To V-Toll

“The Biggest Money-Making Trend of the Next Decade is Already Showing People Like You 12x, 15x, and 18x Gains in a Year….

“There’s a new way to travel in 2022…

“A technology that allows you to go further, faster than any other time in human history.

“And this isn’t about self-driving or electric cars.

“Instead, you’re about to see a brand-new way to travel…

“One that gets you from downtown Manhattan to JFK airport in just over five minutes. A trip that can take an hour in rush hour today.

“Or get you from Baltimore to Philadelphia in 15 minutes… A trip that’s around a two-hour drive.”

And since we are all hopefully a little skeptical of this Jetsons-style future, McCall does address that in the spiel…

“… when I tell you exactly what v-tolling is and how it works, you are going to think to yourself, ‘No way, that’ll never happen.’

“But you know, I bet you’ve felt that way about other technology trends in the past… and I bet you wish you had listened a little closer…

“If you had you’d probably be sitting on a private island by now instead of listening to me today.

“So listen now, because v-tolling is still in the very early stages… and I’m here to show you exactly why I believe this is the perfect moment to get in – and position yourself for extraordinary profits.

“In fact, just last year I showed one group of my followers how to make 12 times their money in less than a year with v-tolling.

“It was probably one of the best performing investments of 2021. Yet, you’ve never heard of it.”

Presumably that gain last year was because he suggested his subscribers invest in the warrants of one of the better-performing VTOL stocks, probably Joby Aviation (JOBY) or Blade Air Mobility (BLDE), but, of course, that was a different world. All of the VTOL stocks that went public through SPAC mergers in 2020 or 2021 are now dramatically lower in price.

But actually, later on he talks up a different stock as a big past winner…

“In April of 2020, I sent out an urgent email alerting my followers to one air taxi maker trading for just $10.28 per share.

“By February 2021, just 10 months later, the stock hit a high of $129.80….

“But this one 12x gain is just the beginning for this company. I believe another 10x is possible from here.

“Because they just announced their air taxi could receive full certification ‘in the next few months,’ after which commercial operations will begin – potentially years ahead of their competitors.”

So that’s actually one of the Chinese air mobility stocks, EHang Holdings (EH), which did indeed go from $10 to $120… and it’s now back to about $7, as the mania has worn off and so many international investors are avoiding Chinese stocks, so sure, I guess it could “10X again”. It’s a very small company now, with a market cap of only about $400 million, and they’re currently burning through their cash, but they do still say that they hope to have their eVTOL self-driving air taxi certified and operational this year.

That’s not the primary stock McCall is pitching here, however, so let’s keep moving…

Much of the spiel is about how big-name folks have invested hundreds of millions of dollars, sometimes billions, in pushing these technologies forward, including Larry Page, Peter Thiel, Bill Gates, Mark Cuban and Richard Branson, among many others… with the urging from McCall that “This is like Getting in on Tesla in 2014,” which is like a FOMO siren song for those of us who were too skeptical of Elon Musk’s overpromising and never bought that EV leader (and yes, you can put me on that list of folks who missed out on Tesla). In McCall’s words…

“So if you wish you’d taken the chance and invested in this stock years ago, I’m urging you to consider v-tolling as the next great advancement in transportation… it could be your chance to invest in a company like Tesla before the rest of the world begins to pay attention to the story….

“I’ll even show you one company trading for around $10 today that I believe will become like Tesla in its own right.”

Ah, so that’s what we want — what is this “one company” that he particularly likes?

Let’s dig into the clues and see if he drops enough hints for the Thinkolator…

“An air taxi operates much like a commercial plane, except an air taxi has as many as 36 engines working to lift you….

“And one Texas-based air taxi CEO says they’ve made flying so simple, safe, and inexpensive that anyone can do it.

“Getting the new industry ready to “consumerize flying.”

“Now, is the time to act.

“Because the No. 1 company I’m recommending you buy is on the cusp of a major milestone.”

So finally we’re talking about a specific investment…

“The first thing I recommend you do if you are interested in this space is put a little bit of money into what I call ‘The Rolls Royce of Air Taxis.’

“This company is the third largest commercial aircraft original equipment manufacturer in the world, only behind Boeing and Airbus.

“That means they make integral parts every plane needs to fly.

“But here’s what makes them unique, and better than their big-name competitors, when it comes to making an air taxi…

“They’re the leader in business and executive jets (planes with 150 passengers), controlling over 35% of the market.

“And they just partnered up with Rolls Royce to conduct research.

“Yet this company is still very much under-the-radar.”

OK, so that’s Embraer (ERJ), the Brazilian aircraft manufacturer. You probably fly in one of their planes from time to time, at least if you live in a smallish city, they sell airlines a lot of those smaller jets in addition to selling a lot of midsize business jets for private use. Embraer was decimated by COVID like everyone else, of course, but has begun to show some signs of recovery, and the market cap is now down below $2 billion at about $10 per share. And yes, Embraer did launch a partnership with Rolls-Royce back in February to study “sustainable regional aircraft,” part of the work Rolls-Royce is doing to make sure they don’t miss out on the next wave of aviation engines (Rolls-Royce, General Electric and, to a lesser degree, Raytheon, the biggest manufacturers of jet engines, are working with lots of potential eVTOL companies on engine design).

What’s the potential? McCall says that…

“taking into account their 1,735 vehicle pre-orders… this company is easily worth over $5 billion.”

But then he drops a little wrench into the works — it seems he’s not actually recommending Embraer, which has been public for decades, but something a little different… here are the other clues:

“Getting in on this company now is an early tech investor’s dream. You can buy shares of what could soon be the No. 1 air mobility company for around $10 today.

“With the potential to 10x your money over the next several years.

“But you must act now. For two main reasons…

1. This company is using a backdoor approach to go public.
2. And as a result, it hasn’t gotten much coverage from Wall Street yet.”

So that must mean he’s actually pitching a spinout from Embraer, this is a tease of Eve, which is Embraer’s electric aircraft subsidiary — Embraer is taking that subsidiary public through a SPAC merger, hoping to raise more capital for development, at a rich valuation befitting the sexiness of the sector, while still keeping control of the project.

The merger was announced late last year and was approved by shareholders and completed on Monday, so Zanite changed names and tickers and the combined company is now called Eve Holding, with the ticker EVEX (the 2027 $11.50 warrants have ticker EVEXW or EVEX/WS on most platforms). And yes, EVEX shares are still right around $10, though as a just-completed SPAC merger it will probably be a bit volatile in these early weeks as the new shares and shares underlying the SPAC warrants are registered with the SEC, and as the warrants become eligible for exercise. Right now, because something like 90% of the shares of the SPAC were redeemed (no surprise, in this panicked market a lot of SPAC deals have extremely high redemptions — people would rather take their $10 back than take a risk), there are very few free-floating shares to trade. The SPAC shares are mostly gone, redeemed for cash, and the insiders and those who participated in the PIPE financing in conjunction with the merger are mostly strategic partners who are either blocked from selling or not inclined to sell.

What does that mean? The short answer is, “don’t get too excited” — there aren’t many shares trading yet, so it might take the market a while to find the “right” price for this stock.

And it also means that Eve has a bit less cash than hoped. They’re coming out of this with $377 million in cash, about half provided by Embraer and half by a bunch of other strategic partners and suppliers, including Rolls-Royce, BAE Systems, Thales and some airlines.

When will we start to see these Eve eVTOL jets soaring around our cities? Well, it will take a while — the hope is to have them certified first in Brazil by the end of 2025, and then in use in Rio de Janeiro shortly after that, later spreading to other cities around the world. They do have 1,735 pre-orders — and actually they’ve added to that numbers since McCall pulled his numbers it’s now 1,825, but those are really referred to as ‘potential orders” based on “non-binding letters of intent” from customers, they are expressions of interest from people who want a first look at the plane and have a potential use for it, including a bunch of regional airline operators, but who haven’t really put up a lot of cash to back up that interest (which makes sense — after all, the plane isn’t completed yet, and they don’t know exactly how it will work in real life, how much it will cost, or whether it will be certified to fly). Kind of like the “pre-order” I placed for a Rivian truck last year, it can be canceled.

And that’s the challenge with all of the air taxi companies, really — certification and air-testing and regulatory adaptation to this new world will take some time, and the startups who are pushing the envelope right now are probably being too optimistic about their timelines and the pace of adoption. Just like the developers of electric vehicles were when Elon Musk was overpromising about delivering those first Tesla Model S vehicles, or like pretty much everyone who spent a decade or more being pathologically optimistic about how fast we will see fully autonomous self-driving cars go mainstream.

That doesn’t mean it’s not a cool idea, or that these air taxis won’t revolutionize suburban travel and get rid of a lot of traffic issues — though you can bet they’ll do it for the wealthiest first, and that even if the model works out as well as hoped, market forces will instantly push air taxi services to prices far above regular taxis. It’s just going to take some time to develop and adjust, McCall seems to be extremely optimistic… and I may be on the other end of that continuum. The SPACs who went public all have projections of a robust fleet of Air Taxis serving the world and making them profitable by 2025 or 2026, and I’d tack on another 5-10 years to that, but who knows, maybe I’m just being an old fuddy duddy. Certainly a few of these companies could make plenty of money just replacing helicopters in some of their use cases, and innovations and breakthroughs might surprise us all.

McCall also goes into some of the structural reasons for his optimism, including a big VTOL test project near Orlando, Florida, and the work the FAA is doing to prepare for this possible “air taxi” future…

“… the U.S. Federal Aviation Administration (FAA) is doing everything in its power to pave a highway in the sky for v-tolling.

“Because research shows these new vehicles take advantage of the worlds’ largest untapped resource…

“The sky.

“But not at 30,000 feet – up where airplanes fly.

“We’re talking about the airspace between 1,000-3,000 feet above us.

“And the (FAA) is working to scale up operations so this air corridor is ready when this technology goes mainstream.

“They are designing this new “highway in the sky” to operate without direct involvement from air traffic control (ATC). Making the path to approvals much clearer and easier than you might think.”

That regulatory picture has gotten a little bit cloudier this week, as news stories about shifting thinking at the FAA indicate that these kinds of air taxis might face a somewhat more onerous certification and regulation regime (that’s my take, anyway, so far the FAA is saying that they’re not trying to slow down certification for the leaders like Joby, who hopes to launch its first commercial services in 2024), but, again, it’s pretty early days still for what the operators hope will become a meaningful and revolutionary industry. A lot of things could change. Especially if one of the test flights causes a serious problem for regular commercial aviation, or crashes.

I hope it works out. I want a flying car as much as anybody, and I’d love to be spared those awful one-hour commutes to the airport. Fingers crossed. I’m just not investing in it at the moment…. I would be much more comfortable buying Embraer (ERJ) itself, or Rolls-Royce (RR.L, RYCEY), to get a little exposure to this trend in a more value-priced package. Embraer will continue to own something like 80% of Eve, so if EVE is worth $5 billion in a few years Embraer will come out just fine… Rolls-Royce is, like Embraer, a little stuck in post-pandemic recovery mode for a number of reasons, but ought to recover eventually, perhaps spurred by more defense spending — I wrote more about that last month when a different pundit teased it as “The World’s Last Great Value Stock.”

There are a bunch of other VTOL and eVTOL plane companies trying to build this market as well, none of whom have meaningful revenue yet or any real products in production or commercial use… but all of which are brimming over with hope, and with at least some capital to spend from their SPAC mergers last year… here’s the list of the ones I’ve heard of, in case you want to run through and think about the relative merits of any of them:

Joby Aviation (JOBY)
Archer Aviation (ACHR)
Vertical Aerispace (EVTL)
Lilium (LILM)

There are plenty of other VTOL aircraft designers and hopefuls who have not yet gone public, as well, like Volocopter or Beta Technologies or Manta Aircraft, in addition to plenty of projects within larger aerospace companies, and private projects funded by gazilllionaires, like Larry Page’s Kitty Hawk. And there are some stocks in ancillary spaces who aren’t really plane builders, but who have similarly gone public over the past year or so, like on-demand private aviation company Wheels Up (UP) or Blade Air Mobility (BLDE).

Interestingly, McCall also drops several other examples of past winners he has enjoyed in this space, including a battery stock…

“And back in March 2019, I found a tiny company making one vital battery component for v-tolling trading for just $0.22 per share.

“Since then, the company has soared as high as 1,827% in two years.”

As with all these charts, McCall shows the enthusiastic highs during the frantic 2021 bull market in all things electric, cool, or new… and doesn’t even mention the comedown from that. This particular example is his older pitch of Ilika (IKA.L, ILIKF), which is effectively a little R&D company in solid state batteries. Yes, he did pitch it around 30 cents, and it did soar to above $3 at the peak, but they do not currently make anything close to a vital battery component for VTOL, they’re still trying to commercialize the production of little hearing aid-size batteries. It’s a cool company, I find their potential interesting, but it’s now back down to about 85 cents as the mania leaves the building (this pitch from McCall was back when he worked at Investorplace, by the way, and the guy they gave his newsletter to, Luke Lango, is still using that old Ilika pitch to drive subscriptions — you’ll still see it teased as his “#1 Electric Vehicle Stock of the Decade.”)

But yep, the latest entrant in the SPAC-fueled VTOL space is indeed Eve (EVEX), which appears to be McCall’s primary teaser target here. Sound like your kind of investment? Prefer one of the many other eVTOL names for a better design or a better business model? Want to just wait and see if EVEX collapses in price like the others have, once trading settles in? Let us know with a comment below. Thanks for reading!