Dave’s note: Before we get to today’s issue… I have a special video for you, shot just a few hours ago from Park Avenue in New York City.
The billionaires on this street know the investing power of warrants. And tonight at 8 p.m. ET, I want to teach you how to invest like a billionaire.
Watch my video for more information (it’ll only take one minute of your time), or scroll to the bottom of today’s Dispatch for the transcript.
By Dave Forest, editor, Strategic Trader
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Most investors make a bet on a company’s stock in hopes that it goes higher. Over time, they want to create new wealth by betting on the potential for that company to do well.
But Amazon founder Jeff Bezos isn’t like the rest of us. He’s one of the world’s richest men for a reason.
And that’s made Amazon the fifth-largest company in the world, behind Apple, Microsoft, Google, and Saudi Aramco, the Saudi oil company.
But we don’t think Bezos is satisfied with fifth best. We think he’s angling for a $4 trillion market cap.
And with his simple strategy… we think he can achieve it. Stick with me to see why…
Building an Empire
Jeff Bezos “officially retired” in July… but he’s not slowing down. He’s doing what most people would do with their wealth: finding ways to build an even bigger fortune.
That’s why, before he left, he’s set up a secret arm within Amazon to invest in dozens of companies – and then force those investments up.
Over the past decade alone, the company shelled out billions of dollars into dozens of companies. Some of these investments went bust. Some are paying out handsomely.
We believe Bezos is no longer content with just “some paying out handsomely”…
While we don’t know the specifics of every investment made by Amazon, we do know about many of them. The reason is that some of these deals are investments in public companies.
But it’s how Amazon is investing in them that matters…
Warrants Are the Billionaire’s Tool of Choice
Instead of hoping for a good outcome with his investments like in Amazon’s earlier days… Bezos found a way to force his investments to go higher.
And it involves an under-the-radar security called warrants.
Warrants are similar to having an option on a stock. A warrant is a security issued by a company to an investor. It gives the investor the right to buy stock directly from the company at a specific price – the strike price – for a specific time.
In most cases, that time period is anywhere from five to 10 years. That’s a lot of time. It allows investors the chance to buy a company’s stock at a significant discount to its current market price.
His revolutionary technique to force his investments up is actually extremely simple:
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Take a big stake in a company. Demand warrants as part of the deal.
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Sign a massive contract for the company’s services or products, which forces its profits up.
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Watch the investment shoot higher.
And not just by a little bit… we’re talking potentially 49X higher, or more.
Bezos has pulled off this feat of finance not once… not twice… but at least six times before, leading to total profits of as much as $2.5 billion.
According to Amazon’s most recent quarterly filing with the SEC, the value of the investments it holds in companies is around $9.2 billion today.
That’s over 10 times the value from just three years ago. This means Amazon may be sitting on around $8 billion in investment gains so far.
Out of the $9.2 billion in investments Amazon holds, more than a third – or $3.6 billion – is in warrants.
How It Works for Bezos
Here’s an example of how this works…
Amazon used Canadian charter aircraft company Cargojet for years to move packages. But in 2019, the company wanted to expand its partnership.
So Amazon invested in Cargojet. But Amazon didn’t ask for stock… It asked for warrants.
Cargojet agreed to issue warrants to Amazon with a $91.78 per share strike price. That means Amazon will have the right to buy shares of Cargojet for $91.78 for seven years – no matter how high the stock price goes in that time.
Here’s the “forcing the investment up” part…
In order for Amazon to “unlock” all of the warrants, it has to spend $400 million with Cargojet over that seven-year timeframe. (That’s until 2026, by the way.)
It’s a win-win. In 2019, Cargojet did $367 million in sales. Amazon promised to add hundreds of millions more.
Today, shares of Cargojet trade for $202. Amazon can buy shares at $91.78 for five more years. That means Amazon’s warrants are showing about a $250 million gain so far.
But that’s not all…
Amazon did the same thing in October 2020 with grocery distributor SpartanNash (SPTN). If Amazon buys $8 billion worth of groceries from SpartanNash over seven years, Amazon gets up to 5.4 million warrants. (For perspective… $8 billion is almost the same amount of revenue SpartanNash did in all of 2019.)
Each warrant gives Amazon the chance to buy stock for $17.73. At today’s price, Amazon already has a built-in $25 million gain on its warrants. How much higher can shares go if Amazon keeps pumping money SpartanNash’s way?
Do this over and over again and you can start to see how Amazon is playing for keeps.
Bezos doesn’t just want to be the richest man in the world. He wants to have the richest company in the world… and a $4 trillion market cap.
This may seem unfair. Amazon and Bezos are using their position and power to get sweetheart deals to make billions more.
But this time… it’s working for us, too. For the first time ever, we can invest alongside Jeff Bezos.
How to Ride the Next Big Warrant
It’s a historic opportunity.
That’s why tonight at 8 p.m. ET… I’m going live for the first time ever to explain how we’ll ride Jeff Bezos’ coattails on his seventh, huge, private warrants deal to enormous gains. I’m talking 49X… or more.
You can sign up right here for free if you haven’t yet. You have nothing to lose.
In fact, I’ve never seen a deal with the potential to make my readers as much money as this… ever. I believe those of you who get in before mid-November will be able to make 49 years’ worth of profits in one trade.
It may seem like an outrageous claim. But you can learn how to make money like the billionaires in tonight’s Zero to Retirement Summit.
Keep walking the path,
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Dave Forest
Editor, Strategic Trader
Video Transcript
Hey, it’s Dave Forest and I’m here on Park Avenue in New York, home to some of the wealthiest people in America.
The billionaires who live here, they know something that most investors do not, and that is the investment power of warrants.
Now, warrants are a tool that investors like Warren Buffett, the Koch brothers, even Jeff Bezos and Amazon use commonly to enhance their wealth. Because warrants are better, cheaper, and faster in many cases than regular stocks.
If you’re a reader of my Strategic Trader advisory, you already know the billionaires’ secret. We’ve used warrants to see gains of 4,900%, 2,800%, 600%, and more.
If you don’t know about warrants, I want to show you all about these unique profit tools, how to use them, how you can get started, and how they’re just as easy to buy as regular stocks, even from a discount brokerage account.
I’m hosting a special seminar tonight, 8 p.m. ET, where I’ll show you everything you need to know to get started.
If you’re curious about warrants, if you’re wondering what these billionaires know that most of the investment community doesn’t, please join me tonight. I’ll see you there.