This year, the company L&F saw its shares skyrocket 82% in the financial market after a request from the Tesla, billionaire Elon Musk's electric car company. The owner of the South Korean company is Jae-hong, which produces the material for electronic drums, and it has been revalued and is worth US$ 800 million, as reported by Bloomberg.
Understand Tesla's involvement
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As an electric car company, Tesla has been a L&F customer for some time and purchases cathodes (electrodes from a cell electrochemistry where the reduction of a chemical species takes place) for years, but the supply was indirectly made by LG Energy batteries Solution.
The difference is that this time there was no other company intermediating this negotiation with LG, so that's when Elon Muk's manufacturer closed direct deals with Jae-hong.
A new agreement was sealed between the companies
The South Korean's new deal with Tesla makes the company rely on 50% less revenue from LG Energy Solution by 2025. According to the view of a professional analyst to Bloomberg, it is different when a market leader decides to deal directly with the client, having a much greater meaning.
The US company's request was $2.9 billion for Jae-hong, boosting the wealth of yet another company that manufactures products for Tesla.
Rise of electric cars
L&F's sales began in 2005, but the company saw its sales skyrocket between 2020 and 2022, racking up more than $2.9 billion in profit during that period. LG Energy Solution accounted for up to 80% of that revenue by the end of last year.
Although Tesla dominates the electric vehicle market, there is a growing demand for electric vehicles, which has driven L&F's growth.
In the first quarter of this year, L&F deliveries were 36% higher compared to the same period in 2022, resulting in a 73% increase in the company's shares in the market.
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