47 Firms Are Mentioning Humanoid Robots in SEC Filings. Historical past Says That is a Pink Flag
SEC filings show a massive surge in companies mentioning “humanoid robots.” History—and bubble psychology—suggest investors should look past the hot words.
EXPERT OPINION BY NICK HOBSON, MANAGING DIRECTOR NORTH AMERICA, INFLUENCE AT WORK, BEHAVIORAL SCIENCE ADVISER @NICKMHOBSON
In December 2017, a beverage company called Long Island Iced Tea Corp. renamed itself Long Blockchain Corp. It still sold iced tea eventually abandoned its blockchain efforts. Its stock rose about 180 percent anyway.
The humanoid robot boom hasn’t produced anything that silly, but I wouldn’t be surprised if it did. A recent query of government databases uncovered 47 companies mentioning “humanoid” in their filings so far this year, up from 13. Faraday Future, an EV maker, accounts for 43 of the 158 filings by itself. Blank-check companies such as Iron Horse II and Churchill XI show up, as do auto suppliers Mobileye, Autoliv, Dana and Adient.
The same migration is under way in China, where Xpeng, Xiaomi and other EV makers are moving into humanoids as car sales slow.
The easy implication is that this is peak hype and robotics founders should raise before the music stops. That may be right, but the more useful lesson is about attention and herd psychology. Investors overreact to hot words in filings, and they underreact to the more subtle changes in language.
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Building robots, or building a story about robots
Faraday launched three robots in February at the NADA Show, a car dealers’ convention, and last week moved its robotics business into a separately listed company, FFR, which says cumulative sales and shipments will pass 1,100 units this month. Mobileye agreed in January to pay about $900 million for Mentee Robotics, which is targeting series production in 2028. Xpeng raised $900 million for its robotics unit in August and its shares fell anyway.
Some of these companies are building robots and some are building a story about robots. The filing count treats them identically, however, and for a while the market tends to do the same. But it comes at a cost.
The word gets priced first
Let’s turn to a previous bubble. In one study, researchers read every public company’s first 8-K mentioning blockchain during the 2017 bitcoin run. They sorted each into “Speculative” (a vague plan involving blockchain) or “Existing” (an actual product). Speculative filings surged as bitcoin climbed, and investors bid those stocks up over the first seven days. Most of the gain reversed within 30 days, and the initial bump was larger when bitcoin itself was rising.
Source: www.inc.com
