Brett Krieger
Retail Investor, Space, AI & Emerging Technology
Merlin is a 100x-or-bankrupt opportunity, too binary to invest in personally despite liking Merlin and Matt. Shield AI and Anduril are focused on defense right now, but it makes sense for them to go after the commercial sector eventually with proven tech, and more competitors are targeting cargo. The stock should rebound once high-beta names come back into favor. x.com
Merlin faces a competitor that already does what its bulls describe. Responding to the view that the Department of War's push to buy autonomy software separately from aircraft favors Merlin, Shield AI's autonomy software already fills that role and is battle-proven, running on 40+ platforms, including three maritime platforms and one satellite. x.com
Merlin's long-term competitive moat is questionable, because companies like Anduril, Boeing or Lockheed Martin could build similar technology in-house instead of paying Merlin for it. The stock is a falling knife; a break of the downtrend would help, and landing a big new partner or contract could break the trend short term, but the long-term fundamentals remain the concern. x.com x.com
Merlin Labs common stock is in a death spiral toward zero because preferred holders and shorts hold the upper hand. Equity raises have no limit and the preferred ranks senior to the common, so fundamental analysis does not matter. @ShawarmaCapital, a former bull, attributes the fall from $17 to $1.81 to a roughly 44M-share unlock on a thin float, a Series A Preferred conversion reset on October 15 already headed for its $5 floor, and an unwinding short squeeze. x.com x.com
Merlin's finished Critical Design Review for its C-130J autonomy program with US Special Operations Command removes a big chunk of technical risk. It shows Merlin Pilot AI meets the performance, safety and airworthiness standards for one of the military's key transport aircraft, and the program moves to integration and flight tests. A $100 million-plus IDIQ ceiling and commercial runway in cargo and pilot shortages make it asymmetric, and high short interest adds explosive potential. x.com
Merlin was always highly speculative: buying a stock at 125x sales means accepting it could fall to 30x without any solid reason why it shouldn't. Its price spike came when it was being pitched like crazy on X. x.com x.com
Space stocks could regain high-beta flows as SpaceX lockups end and a probable late-November Anthropic IPO threatens AI stocks, much as SpaceX's IPO hurt space names. Hedge funds are overexposed to the Magnificent Seven and underexposed or max short low-quality high beta; falling rates and toppy oil could make the rotation painful for them through 2027. AST SpaceMobile could benefit as intermittent service triggers agreements and Blue Origin possibly returns to the pad in six weeks. x.com x.com
Merlin's deal with Israel Aerospace Industries adds credibility and a distribution path, though not revenue, and kills the argument that there is no large-aircraft market, per @ShawarmaCapital. IAI did $7.4B of revenue last year, holds a roughly $29B backlog and leads passenger-to-freighter conversions, owning the only approved 777 widebody conversion in service. There is certainly a future market for large civil aircraft. x.com
Kraken Robotics offers one of the best risk-reward setups in defense, giving exposure to Anduril's autonomy trend at a fraction of the valuation. It supplies SeaPower subsea batteries for Anduril's underwater drone programs, has 2026 product orders of $327-355M and guides to $290-320M revenue and $65-75M adjusted EBITDA, yet sits near a sub-$1B market cap after a 60%+ drop. It plans a full TSX listing in late 2026 or early 2027, and $10 is the target. x.com
Kraken Robotics is stuck in a trap as its key catalyst, the Anduril subsea ramp, is delayed by at least a year. That ramp likely needs a US battery facility and a Navy order to confirm, and the defense budget showed no large FY27 subsea-drone order. The market has also turned on drone and defense stocks after they ran ahead of a multi-year buildout, and without an uplisting from its junior exchange institutional ownership and volume stay thin. Second-half earnings may bring some support. x.com
Merlin's pivot to certifying its autonomy for large aircraft opens a much bigger runway than the small-aircraft path it is leaving, drawing on its defense experience with high-assurance platforms. Days later it demonstrated autonomous takeoff, landing and AI-powered air traffic control communications at TxDOT's Project NEXUS alongside partners such as Joby. It holds $183.9M in cash with no debt, and the chart shows a rounding bottom after a slide since April. x.com
Archer Aviation is increasingly one of the best bargains at a $3.5B market cap after releasing a dual-use autonomous hybrid-electric VTOL aircraft developed with Anduril. Anduril is also showcasing its Thunder attack aircraft built with Archer. The open question is how much defense revenue Archer captures, given its apparent focus on the commercial side. x.com x.com
