In This Article:
- The Edge
- Speeding Motorcycle
- Hog History
- Not Your Grandpa’s Harley
- The S2 Del Mar: Under the Hood
- SPAC to the Future
“The Edge… There is no honest way to explain it because the only people who really know where it is are the ones who have gone over. The others — the living — are those who pushed their control as far as they felt they could handle it, and then pulled back, or slowed down, or did whatever they had to when it came time to choose between Now and Later. But the edge is still out there.”
Hunter S. Thompson
Have you ever ridden a motorcycle? It’s incredibly fun. But it can take you to the edge…
Legendary gonzo journalist Hunter S. Thompson once spent a year with the infamous biker gang Hell’s Angels. He documented it in his book Hell's Angels: The Strange and Terrible Saga of the Outlaw Motorcycle Gangs, and some of the experiences were harrowing, to say the least.
After witnessing one of the bikers beating his wife, he reacted with a reasonable observation: “Only a punk beats his wife and dog.”
It was not well received – the gang beat and stomped him to the point of hospitalization:
Needless to say, Thompson’s depiction of bikers did some damage to the overall image of motorcycle gangs and the lifestyle in particular. But since then, the image of motorcycles has drastically changed. Gone are the days of cranked-up, tattooed maniacs beating women and stabbing one another.
The scene has softened its image, and a new breed of motorcycle has debuted that will only continue the rebranding of biker life.
Speeding Motorcycle
Biking has slowly turned into a lifestyle of weekend warriors that enjoy an occasional ride in the sunshine, a more thrilling commute to work, or the simple economics of city driving. Where I live in rural Maryland, I see dozens of bikes go by often — sometimes in the hundreds (which is a little inconvenient when I’m trying to pull out of my roadside driveway).
But they are as peaceful as they are plentiful.
The massive Sturgis bike rally in the Black Hills of South Dakota has brought over 700,000 attendees in recent years – even during the COVID pandemic. Again, those hundreds of thousands aren’t hardcore bikers. They are businessmen, IT consultants, accountants, and regular Joes like you and I.
The motorcycle trend is going nowhere but up…
According to the Motorcycle Industry Council, 2021 motorcycle sales in the U.S. continued their rise across all segments. Overall motorcycle sales rose 14.2% over 2020 figures and 21.8% over 2019 figures across all segments.
Enter the single-most iconic motorcycle company of all time: Harley-Davidson (NYSE: HOG).
Hog History
Harley-Davidson is an American institution. The resilient company was forged way back in 1903, and is one of only two motorcycle companies to ride out the Great Depression. And the image of Peter Fonda on a chopper in Easy Rider is one of the most iconic American images.
But Harleys are far more than gas-guzzling hogs.
(Editor’s Note: Why are Harley Davidson motorcycles called “Hogs”? In the 1920s, a group of farm boys were winning motorcycle races left and right. Their team mascot was a big old hog. After every win, they would put the hog on their Harley and take a victory lap. The name stuck. Harley-Davidson even changed their stock ticker from HDI to HOG in 2006.)
Harley-Davidson is more than a brand – it’s a lifestyle. The company has opened restaurants and clubs, developed apparel and home décor, and sells toys, video games, and scale models of its motorcycles. They even have a museum.
Now they have finally taken the next step in their evolution by releasing an electric motorcycle that is already making waves.
Not Your Grandpa’s Harley
Harley-Davidson CEO Jochen Zeitz rang the opening bell on the NYSE yesterday to announce that Harley’s electric motorcycle division LiveWire (NYSE: LVWR) has officially begun trading as its own company.
During the announcement, Zeitz said:
This transaction represents a proud and exciting milestone for LiveWire towards its ambition to become the most desirable electric motorcycle brand in the world. We believe LiveWire is well positioned to define the two-wheel EV market, and we’re excited about the future – in celebration of our listing today, we’re pleased to open reservations for the production version of the S2 Del Mar for the U.S. market.
This is a big move for Harley and for the electric motorcycle industry at large. LiveWire became the very first EV motorcycle company to be publicly traded.
The market is salivating for electric bikes, and the S2 Del Mar mentioned in Zeitz's announcement has already whipped up a frenzy in the biking community. Here’s a look at LiveWire’s latest offering:
The company started reservations for the new S2 Del Mar this week. The first time the company opened up pre-orders, the Del Mar Launch Edition sold out in 18 minutes. There is clearly some pent-up demand for electric motorcycles with the Harley stamp of approval.
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S2 Del Mar: Under the Hood
The S2 Del Mar is anything but a little electric toy. It is projected to rock 80 horsepower (59.6 kW), hit 0-to-60 mph in 3.5 seconds, and boast a city range of 110 miles on a charge.
While it doesn’t quite compete with the 100-plus horsepower in the larger hogs, it’s not supposed to. It appeals to the new generation of bikers who may not necessarily want to go cross country, a la Easy Rider, but wants to use it to commute, drive around the city or do weekend cruises with a mere charge or two.
Speaking of charging, the S2 has two options: Level 1, which would be akin to a normal wall outlet charge, and Level 2, which would use a public charging station. Level Two is estimated to take around 75 minutes.
How about speed, though? Where does this chopper top out? Micah Toll from Electrek got a behind-the-scenes test drive and had this to say:
“LiveWire hasn’t announced the Del Mar’s top speed, but let’s just say it’s higher than you’ll ever need. I got it up to speeds that I had no business reaching on a New York highway, and it seemed to have plenty of room to keep going. I wasn’t about to risk my license (or a speeding ticket on a bike I didn’t own) by pushing my luck any further than I already had, but suffice it to say that whatever the top speed is, there’s no road in America that you’ll be able to legally hit it.“
You can watch his test drive below:
The S2 Del Mar will retail for $16,999.
SPAC to the Future
LiveWire wasn’t an ordinary IPO. It came onto the NYSE via a special purpose acquisition company – SPAC.
Harley-Davidson teamed with SPAC company AEA-Bridges Impact Corp and brought along Taiwanese electric scooter giant KYMCO to create LiveWire (NYSE: LVWR).
The final deal was financed with $400 million in cash from AEA-Bridges Impact Corp, $100 million investment from Harley-Davidson, and $100 million from KYMCO. Harley-Davidson will have a controlling share of 74%, ABIC’s shareholders will hold 17%, and ABIC’s founders and KYMCO will hold around 4% each.
The company was given a valuation of $1.77 billion.
The partnership with KYMCO is important from a manufacturing standpoint because its expertise in the EV market will aid LiveWire in reducing production costs which will be crucial as competitors creep into the market with more modestly priced EV bikes.
The stock closed at .68 that first day but has already dropped down to $7.03 at the time of this writing. That’s why I always warn investors not to jump into a hot IPO in the first days of trading. They almost always shed some of that exuberance and rarely reach the highs of the IPO for many months following the debut.
With LiveWire, I want to follow the company to see if they are able to get riders into the seats of their bikes. It will also be critical to watch sales numbers and manufacturing capabilities when supply chain issues have been a major problem for every vehicle company – two and four-wheeled.
With the hefty price tag of $16,999 and another model at $22,799, the S2 Del Mar is a luxury. With Americans dealing with sky-high inflation and a potential recession, it remains to be seen whether they’ll shell out their dwindling dollars for a sweet new motorcycle.
Time will tell…
We’ll just have to see how long it takes companies like LiveWire to hit full speed. But I know this: the edge is still out there.
Godspeed,
Jimmy Mengel
TheProfitSector.com
As long as it sounds like my old “Hog,” I’m open to some innovation. Looking forward to seeing how the stock does.