BBAI. Float at 1.3 million this week! via /r/wallstreetbets #stocks #wallstreetbets #investing


BBAI. Float at 1.3 million this week!

BigBear.AI

The gist – BigBear.AI is a short and long term play potential.

SHORT TERM – There is a backstop agreement that will lower the float to just over a million shares by March 7th.

LONG TERM Big Bear.AI is a well established, 20 year old, company that recently became publicly traded that is growing rapidly and IS CASH POSITIVE.

Who is Big Bear AI

Home

Artificial intelligence for Decision Dominance – BigBear.ai

BBAI is a leader in “decision dominance” as they call it for more than 20 years, BigBear.ai operationalizes artificial intelligence and machine learning at scale through its end-to-end data analytics platform. Their customers include government (intelligence communities, national defense) and commercial sectors (globally). They assist customers’ decision-making processes and deliver practical solutions that work in complex, realistic and imperfect data environments. In simpler terms, they use a smart machine to input a large amount of data, aggregate it, and predict outcomes.

See the investor presentation link below:

Investor Presentation: BigBear.ai to Become Publicly Traded Company Via Merger with GigCapital4

BBAI is a pure play AI company that also includes c3.ai and Palantir among others.

Note from the above slides that BigBear.AI predicted the Russian invasion of Crimea!!!!

Merger

Merged with Gig4 capital via SPAC

BBAI is a SPAC merger (business combination) between $GIG (GigCapital4) and Big Bear AI. The merger vote was approved on Dec 2, 2021. According to the SEC filings, 36 million shares were available for the public vote. Redemptions at merger vote was 25 million (of those 36 million shares) which leaves the float around 12 million.

Here is the link to the numbers :

https://ir.bigbear.ai/sec-filings/all-sec-filings/content/0001193125-21-355558/0001193125-21-355558.pdf

Here is where the numbers get even more interesting….

THE SHORT TERM CATALYST –

BBAI and it’s majority owner AE Industrial Partners own approximately 123 million of the 135.5 million outstanding shares.

https://fintel.io/so/us/bbai

BACKSTOP AGREEMENT

BBAI entered into a contractual agreement for backstop shares by March 7th (90 days after close of merger on Dec 7th, 2021). This agreement includes BBAI purchasing 9.95 millions (of the 12 millions shares) if the stock price stays under $10.15 by then. This will leave the float at just over a million.

https://www.businesswire.com/news/home/20211130005604/en/BigBear.ai-and-GigCapital4-Enter-Into-75-Million-Backstop-Agreement-With-AE-Industrial-Partners-to-Support-the-Continued-Growth-of-the-Business

2/23/2022 – Big bear.ai filed an 8-k (see link below) with the SEC terminating the existing forward shares agreement with Glezer Capital and Meteor LLC. This buyback included 6.1 million (see 13-G below) of the 9.95 millions shares effectively lowering the CURRENT FLOAT TO JUST UNDER 6 million.

8-K https://d1io3yog0oux5.cloudfront.net/sec/0001193125-22-049962/0001193125-22-049962.pdf

13G https://www.sec.gov/Archives/edgar/data/0001836981/000107680921000230/gigclean.htm

The remaining 4 million shares held by Highbridge Capital and Tennor Capital are expected to be filed any day now (90 days after Dec 7th closure….remember the March 7th date mentione earlier?)

Short Interest 576.82K as of 2/25/2022

Leadership Dr. Reggie Brothers, CEO among others…. https://bigbear.ai/leadership/

Growing team There team is only growing and they have lots of openings…

https://careers.bigbear.ai/jobs

Partnerships

Include Palantir, Amazon Web services, Microsoft Azure, Apian, Atlassian, UiPath, Virgon Orbit, Redwire, Terran Orbital…..and others. https://bigbear.ai/partners/

Strategic partnership with Palantir (ticker PLTR) https://bigbear.ai/newsroom/bigbear-ai-and-palantir-announce-strategic-partnership-combining-ai-powered-products-with-next-generation-operating-platform/

Financials

600 million market cap (update before post) Quarter 4 revenue – $42 million (Q3 was $40 million) 2021 Annual Revenue – $160 million, estimates between $152-160 million 2022 Revenue projections of $277 million or more, growth of 40% or more. Pending $480 million of backlog orders https://ir.bigbear.ai/financial-information/financial-results

At this point, you MAY BE ASKING….are

Offerings and dilution coming??

The short answer is no. They have a $200 million loan, convertible at 6% and not due until 2026. They have a right to issue 23 million new shares to repay the loan, but can not issue those shares until 2026.

How does this valuation compare to similar companies?

Looking at AI, data mining, cyber security company valuations compared to 2021 revenue.

SNOW 80x PLTR 20x CRWD 20x AI 16x BBAI trading at……4x (2.5x at projected 2022 revenue)

AND BBAI is cash flow positive!!!!!

Analyst coverage William Blair – started on 2/9 – market perform Northland Capital – coverage started on 11/8/21 – outperform – $13 price

TLDR summary : Many seem to be seeing this as a 2 part play. Short term we have this catalyst coming March 7th/8th. Long term, this company has amazing revenue projections and is in a field that is only projected to grow in importance and revenue. The volume on this ticker has been very low (62,000 daily average) but has increased quickly to over 400,000 on 2/24/2022 and 795,000 on 2/25/2022 and was trading between 450-950,000 volume this last trading week. Options trading is heavily leaning towards calls indicating that an SP raise is likely in the near future.

Quarterly earnings report will be announced soon and is expected to take place later this month.

This increase in volume may be due to the increasing conflict in Ukraine and the sudden interest for investors in AI, cyber security. It may have been kept “under the radar” until now due to market sentiment being negative at the current moment as well as how new this company is to being public.

This is not investment advice and I am not a financial advisor. Please do your own due diligence.

I hold 1,000 commons, 1,000 warrants, and 20 $7.50 call options with April expirations

Submitted March 06, 2022 at 12:46AM by alilfishy
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