The Future May Be Bright, But the Market is Focused on the Present with These Warrants

Bright Machines, a maker of intelligent, software-driven automatic manufacturing technologies, yesterday announced a merger agreement with SCVX Corp, a SPAC headed by Michael Doniger. The new public company will trade under the ticker BRTM once the deal closes. 

Warrants for SCVX trade under the ticker SCVX/W. 

In a statement announcing the merger, Bright Machines describes itself as a company that “leverages computer vision, machine learning, 3D simulation, and adaptive robotics to fundamentally change the flexibility, scalability, and economics of production.”

Bright Machines sums up what it does when it says, “we give eyes, brains, and touch to industrial machines.“ Factory-ready assembling, labeling, welding, and fastening are only a few of the ways Bright Machines has digitized production. 

Bright Machine’s innovation is used by businesses of a variety of sizes–both original equipment manufacturers (OEMS) and contract manufacturers. Some of the customers embracing this software-driven automation include BMWi Ventures, Argonaut Manufacturing Services, and Diagnostics for the Real World. 

Bright Machines was founded in 2018. Since that time, it has doubled its revenue each year. 

The only problem with the merger…valuation. And a market that still is not big on revenue with with no earnings attached.

Like many of the recent SPAC deals, SCVX values the Bright Machines acquisition on 2025 EV/EBITDA, enterprise value/earnings. And compares that figure to the current EV/EBITDA of companies that actually do have earnings TODAY.

This led to a yawn from the market, no movement in SCVX common, and a slight pop (which occurred a few days before the announcement) in SCVX warrants.

In 2019, FORBES named Bright Machines one of “America’s Most Promising Artificial Intelligence Companies.” Only problem is the market isn’t big on promises these days, especially as they pertain to earnings.