Posted: May 7, 2020
Downturns are ideal times to buy distressed assets that you might not otherwise get a look at (Renault’s opportunistic acquisition of Nissan is an example of such a bargain in the automotive field). Even if Zoox is a long shot bet it could make sense for a deep pocketed investor prepared to look at a five to seven year horizon. It will get increasingly difficult to put together the kind of operation that Zoox represents in the AV/EV world and although the odds still have to be against Zoox succeeding, the upside, if it has the right stuff, are enormous – look at Tesla’s valuation. It could be a reasonable bet, even if it is unlikely to come off. But the chaos of a downturn means potential investors must execute quickly and surefootedly. But above all they must understand clearly the real reason AV s why Zoox’s exiting investors are not prepared to put up the money, and they must look at themselves very clearly and ask if they can really deliver on support for the Zoox culture and have the stamina for the marathon that success will require.
Source: The Business Journal