[The Bleeding Edge](
- One more baby step toward Mars…
- These early investors stand to make 500% when this company IPOs
- George Church just made himself a lab rat…
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Dear Reader,
Today, we’re going to continue our theme on education and how it is being affected by the pandemic. But this time, we’re going to look at the shenanigans that the universities are up to…
In short, they are up to no good. They’re engaged in a centuries-old trick… the classic “bait-and-switch.”
The story goes like this…
Over the summer, these academic institutions with such storied histories announced they were working diligently and thoughtfully on plans to reopen fully in the fall. They would have all sorts of new safety protocols in place to “protect the students” – the “bait.”
[As we learned yesterday]( from the Centers for Disease Control and Prevention director, these are the same students that are five to 10 times more likely to become severely ill from influenza than from COVID-19.
And over the summer, tuition bills were sent to parents with the understanding that schools would be fully reopening in the fall. A year at a university doesn’t come cheap. Those tuition fees on average run between $50,000–75,000 a year at many schools.
Universities happily cashed those checks as quickly as they could. Then came the “switch.”
Days ago, Columbia University announced that all undergraduate classes will be taught remotely in the fall. This was of course after collecting the tuition money.
Is Columbia alone? Not at all.
Just yesterday, the University of North Carolina reversed its plans for in-person classes during the first week of classes. Its strategy was to bring the students on campus, and then shut it down. I suspect that it thought the “arguments” with the parents would be easier if it actually held classes for one week.
Want more examples?
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Princeton University
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Johns Hopkins University
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University of Massachusetts Amherst
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Howard University
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Loyola University Maryland
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Smith College
I could go on and on… They all made the same “switch” announcements this month.
Get this, only 2.5% of all universities are returning to a full, on-campus model. 20% are “primarily in-person,” and 15% are a hybrid model where some are on-campus and some are not.
Unbelievable. But it gets worse…
Most universities refuse to reduce tuition. Their best argument is that remote learning and public health measures have made operations more expensive.
You’ve got to be kidding me.
Buildings are closed, dormitories are empty, food service is not required, and somehow expenses have increased? To add insult to injury, many are increasing tuition as much as $475 a semester to support “extra costs.”
This is all to “protect” a population that is five to 10 times more at risk from influenza.
Yes, I do realize that there are teachers on campus as well. But we also know that anyone 65 or younger, who is in good health, is at no more risk from COVID-19 than they are from influenza.
A far more rational policy would be for teachers at high risk to simply videoconference into the classroom, with the support of a teaching aide who can be there in-person with the students. The teachers could do the job that they are paid to do with no risk to their health.
The universities can also keep their obligation to the parents and students who have paid for their services.
I don’t have college-age kids yet. But this makes me frustrated and angry. These schools are running a racket on parents, and students, who have paid for service that they are not receiving.
It’s time to open the universities and get kids back on campus, where they can learn, mature, and ultimately become productive members of society.
Enough of the bait-and-switch.
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The SN5 Starship just launched…
SpaceX just took its next step toward its mission to Mars. Have a look:
The Latest Starship “Hop”
Source: SpaceX
This is Starship prototype SN5, a test version of a spacecraft that will ultimately take trips to the Moon and then Mars.
In this launch, SpaceX performed a 500-foot “hop.” A single Raptor rocket engine launched the SN5 about 500 feet into the air, where it hovered momentarily before gently gliding back to the ground and landing upright on a separate landing pad.
This “hop” might seem like just a baby step toward Mars, but it’s quite impressive.
We should keep in mind that the SN5 Starship is 98 feet tall and 30 feet wide. That makes it roughly the size of a nine-story building. The fact that SpaceX was able to launch such a large craft 500 feet in the air and then gently land it in a controlled manner is incredible.
And this wasn’t some kind of sleek, polished spacecraft; the SN5 literally looks like a massive corn silo. Of course, the finished Starship will have fins and a nose cone, which will provide even higher levels of control.
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So this is yet another exciting development from SpaceX. And it comes after the successful return of the SpaceX Crew Dragon Demo-2 from the International Space Station. We talked about that incredible mission and splashdown [earlier this month](.
Going forward, SpaceX will perform several more hops as it fine-tunes the Starship prototype and launch process. And the SN5 is scheduled to eventually make it into orbit for a test flight. Of course, these test runs are getting SpaceX ready for its next major mission – its first passenger flight around the Moon. That’s set to happen in 2023 – less than three years away. I can’t wait.
And this progress shows how SpaceX continually raises the bar for the future of space exploration. It consistently demonstrates that it’s possible to go to space in better, faster, and cheaper ways. And that’s revolutionizing this industry and making it one of the most exciting areas to watch for potential investment opportunities.
Readers can expect much more from SpaceX and the [new space race]( in the months to come.
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In doing so, theyâve set themselves up to make a fortune. Fox Newsâ Judge Jeanine Pirro just exposed this story in a hard-hitting interview thatâs too controversial for TV.
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This early stage company is gearing up to go public…
Next, we have to check back in on Epic Games. We talked about this company [back in May]( when it released its new gaming engine called Unreal Engine 5.
The engine itself is quite impressive. But the biggest story was that Epic Games made Unreal Engine 5 available for other companies to use in exchange for royalties on all games developed on the platform.
Epic Games will get 5% of all future revenues for games developed on Unreal Engine 5, right off the top. Talk about a brilliant move.
Well, Epic Games just completed a massive $1.78 billion venture-capital round. The company is now valued at an impressive $17.3 billion.
And look who invested in this round… Baillie Gifford, BlackRock, Fidelity Management, T. Rowe Price, and Ontario Teachers’ Pension Plan. These are institutional investors who usually come in when an early stage company is getting ready to go public. They are chasing the pre-IPO shares.
Now, investing in an early stage company at a $17.3 billion valuation may not sound too savvy. After all, Epic Games is now valued greater than established companies like Discover Financial Services, ViacomCBS, TransUnion, and Zillow.
But it makes sense if we look at the financials.
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Epic Games generated $4.2 billion in revenues last year. That’s mostly coming from its hit game Fortnite, which we talked about [back in April](. Fortnite is so successful because it is a social media platform and a massive multiplayer game wrapped into one. Players can socialize with friends while playing the game.
And Epic’s earnings before interest, taxes, depreciation, and amortization (EBITDA) was $730 million last year. That makes this a grossly profitable company.
Looking forward, Epic Games is on pace to do about $5 billion in revenue this year. Compare that to its $17.3 billion valuation, and we have an enterprise value-to-sales ratio (EV/sales) of just 3.46. That makes this company a great deal, which is why Epic had no trouble raising almost $2 billion.
I would not be surprised to see Epic Games quickly trade up to an EV/sales of 20 after it goes public in a market like this. And that means the investors who got in on this latest round stand to make around 500% on their position.
Not too shabby, assuming that Epic can go public in the coming months.
This is a company that I’ll continue to track in hopes of an IPO. But as always, I’d be looking for a good entry point at a valuation that all but guarantees investors will make money.
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Fidelity Investments reported a record number of 401(k) millionaires under President Trump.
In fact, over the first two years of his presidency, more than 1.5 million everyday Americans became millionaires⦠an average of 2,161 new millionaires a day⦠That’s more than under any other president in historyâ¦
So youâve already seen the proof. President Trump running America the way he runs his business works.
In the aftermath of the COVID economic crisis⦠[what he may have in store for Americans could send shockwaves through the economy](.
[Take a few moments to watch the video and make up your own mindâ¦](
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The do-it-yourself COVID-19 vaccine…
We are going to wrap up today with an interesting development on the COVID-19 front.
A fringe group of about 20 really smart people from Harvard and MIT have banded together to develop their own “COVID-19 vaccine.” These are technologists, doctors, and researchers. The group includes famed geneticist George Church, who has been a pioneer for both genomic sequencing and synthetic biology.
We’re talking about a true do-it-yourself (DIY) vaccine here. This group is not conducting preclinical testing or clinical trials. They aren’t going through the standard processes for vaccine development.
But from their perspective, they are simply making a “vaccine” and taking it themselves to see if it works.
Sounds risky, right? Why would a group of such smart people be going to this extreme?
The answer is that this group does not believe that any effective vaccine will be approved within the next 12 months.
Many of them are unreasonably cautious about COVID-19 from my perspective, but I respect their decisions to self-isolate and innovate. Despite the research that I have shared in The Bleeding Edge, even George Church has not left his house in five months. Perhaps he has an autoimmune disease to justify such caution?
So rather than wait for a mass-produced vaccine to get approved, this group is taking matters into their own hands. And they are using a synthetic biology approach. This is a therapeutic approach that seeks to mimic systems already found in nature. We last wrote about this subject in relation to [Moderna’s COVID-19]( work.
So what did the group do? It created peptides – chains of amino acids – that are structured like the peptides in the COVID-19 virus.
These peptides are mixed into a nasal spray and then injected into the body through the nose. The hope is that the body learns how to produce antibodies as a response to the COVID-19-like peptides. That may help fight off COVID-19 in the event of infection.
Now, the spray is unlikely to harm the participants. The peptides shouldn’t do any damage. But we won’t be able to judge the effectiveness of this approach because there won’t be any clinical data on it. It’s a true DIY project.
Some in the medical community believe this project is irresponsible because it shirks standard clinical trial procedures. And we have yet to hear from the Food and Drug Administration about any legal issues regarding this kind of self-experimentation.
But I must applaud this fringe group for thinking outside the box. This is a sign of things to come.
Synthetic biology is unique in that people with the right tools and knowledge can sequence something, then design a drug or vaccine based on that sequence, and then produce that product.
The work can literally be done out of a garage. It’s akin to computer programming for biology, a way to democratize a field that was only accessible to corporations and institutions that had costly laboratories and immense funding.
We’ll be keeping a close eye on this trend.
Regards,
Jeff Brown
Editor, The Bleeding Edge
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