Before I mark it, could you provide any qualifications or time frame for your prediction such as "this is going below .40...... if they don't sign a manufacturing agreement by year end"?
While you're at it what do you think the stock price will be if they do announce a manufacturing agreement?
That last question is for all folks.
Normey you have always been a consistent supporter of the company and nothing you say in your comments are arguably incorrect. However it is all speculation on some future potential. Any revenue that has a reasonable possibility to breakeven is more than 2 years away. Before that so much more funding has to be brought in. The outstanding shares in issue are understated as 85m because the dilution of the last round had not been completed before the end of the 3rd quarter. So realiy now there are 135m in circulation. At $0.53 that puts the current value of $71m
The fact there is $20m+ left and after $300m has been invested into this company it is likely that there is some value above cash for some party that can do something with it. However it is hard to imagine that any goodwill value is no more than 100% above cash, bearing in mind that at the very least the company is projecting to still be losing $15m in OpEx going forward.
So year end therefore there is a good chance that there would be $15m+ in cash. Assuming there is a premium above that of a further 100% then the value at year end is potentially $30m or $15m above cash. This puts fair value for the stock at around $0.22.
Because the recent funding round was at $0.25c I suspect that there would be buyers always above $0.35
In terms of production, they claim they will be online by end of 2015. The last ballpark sizing of the plants they were considering was 2.5 to 5ktpa. At most, that has production at around 11m pounds per year. The pricing range they claim to be targeting in their new specialty chemical additive focus is $3 to $5 a pound. Margins are unknown. But the factory is seen as an initial plant. I guess it is feasible that they could have a profitable business at 5ktpa but I think the intention would be to show they have sizable demand and an obviously profitable business with expansion beyond the first factory. In short, I don't think they would be aiming to barely be profitable with a 5ktpa plant as much as getting something up and running quickly at 2.5 ktpa that proves a JV/merger/etc that gets them a large facility.
They have some inventory now and I believe a test facility to produce some additional pha. But with respect to the PVC trials, I don't know how fast construction applications move from trials to embedding in product. For example if they are working with outdoor decking (products currently suck leaching out dusty chemicals and degrading with exposure to light...and pha apparently helps solve this), or with bendable PVC, or with wire coatings, or with making PVC industrial carpet backing less toxic and more recyclable...in any event I imagine the trials bring substantial. Possibly they get multiple tonnage sized trials before big orders but I don't think they suffer much for not having industrial scale production before Q4 next year.
Sentiment: Strong Buy
New MBLX is effectively the following:
-plant technology to be sold or merged into some other venture (for what I don't know)
(Plant business probably consists of
-oilseed business (Camelina grown for fuel),
-PHB grown in various crops (switchgrass, sugarcane, possibly tobacco), somehow processed out for use in plastics, remaining crop used for ethanol or more likely biomass burned for power.
-Possible seed technology patents discovered along the way not specific to bio plastics or oilseed
-c3-c4-c5 industrial chemical production sidelined for now
-compounding business in Germany sold off/divested pulling MBLX out of being end manufacturer of film business.
Cuts to save $10m a year
Focus now extremely tight on PHA, and specifically PHA in use with PVC, laytex films, as an additive to PLA (NatureWorks), and for microbeads.
Sentiment: Strong Buy
Not sure what the effective float has to do with valuation. If there were 20m shares in free float before the dilution there are still the same out there to realise that the additional stock issued divides their prior value by 4. I am not suggesting that management have no chamce to turn it around, but they need time and more money which is further dilution.
Yeah, all well and good with the share count, but how many shares are really available to be traded?
With all of those committed holders, what is the "effective float?"
Of course it is likely because the number of shares has increased by the end of September to 85m which is now reflected in the valuation. On top of that the recent resolutions after the quarter end increasing the number of shares to 135m with the extra 50m shares will mean that at the current price the company is seriously over valued. It is not speculation, just an obvious calculation. Further to this another $35m has to be raised in the next 12 months just to deliver a development pilot plant which will not be profitable. I am not short or long at this point, merely stating the obvious
Can't understand how this stock trades. There is no need for another round of funding right now, but it is trading like one is about to take place. Maybe an institution is getting out. Either way, i know the three amigos did not invest millions to see the pps languish here. Buying more to keep averaging down.
Basically there has been an additional 100m shares issued in a recent low cost dilution at $0.25. On top of that the company has stated that a further $35m has to be raised within a year. Being fair to the CEO he has taken the task to turn this around with his hands tied behind his back with little resourses and insufficient funds or time to do it in. With no production and inventory which was made a few years ago now itself decomposing the risk is so large that investment funds have not followed on with further investment. Even at this price, based on the CC the value of the shares with the volume remains high (by my estimation) so I am not shorting at these levels but I hazard a gues that the true risk value is abiut $0.40 at this point.
micro beads polluting our waters and our aquifers , i hear mblx has technology that can make compostable micro beads? Why would that have any value?
Plastic bags and other stuff polluting our oceans, choking marine life, and polluting our landscape, who needs compostable plastic?
Astonishing to me that these techno_nerds can't get their #$%$ together and bring something , anything to the marketplace!
I think I'm hearing the sound of the fat lady singing. This company is dead in the water,
The most legitimate rap as best expressed by Pelosi and Dagiw had been this company's lack of commercial focus and disproportionate revenue to burn rate as well as a lack of manufacturing resource.
I remember Pelosi a long time ago saying this company was like a giant R&D chemical project with no business direction.
Apparently Shaulson agreed and in my opinion greatly increased the odds of commercial success with recent efforts to down size staff, spin off crops program, suspend chemical efforts and be laser focused on bringing the PHA performance additives to market.
The message of signing a manufacturing agreement before year end has not changed. The one area that I need some clarification on is if this "robust pipeline" in the PVC additive trials really does "develop into commercial sales in Q1- 2015" , how realistic is using Telles JV inventory to fill the gap between Q-1 2015 and having the manufacturing process up and running in late 2015?
Normey could you provide some clarity on that and your take on this recent transition to the "new MBLX"?
Pelosi as an FYI I couldn't resist your "ready to gamble?" challenge a few months back and did actually add some at .41. I guess I am a bit of a gambler at heart. Good luck to all.
I'm at a loss trying to find where MBLX mentions a reverse stock split - can you point to where they mention it? Thx.
As we approach year end, now is the time to be speaking with your accountant regarding year end tax planning.
Your income in 2014 might be low enough that any capital gains you may earned or could earn would be taxed at 0%. If so, selling all or a portion of your position in Metabolix (presumably at a loss) would have no tax advantage. Save those unrealized losses (if applicable).
We can all agree on one thing, Changes in tax law are as perennial as the wind. Will the 0% tax on capital gains at certain income levels be extended beyond 2014? I am not certain, but I believe at this time the answer may be no.
If the 0% rate disappears, , then if capital gains in 2015 and beyond are taxed at say 15%, you might want to use the loss generated from the sale of Metabolix to reduce potential realized capital gains from sales of other securities in your portfolio.
Conversely, if your realized or to be realized capital gains trigger say the investment tax/medicare tax thresholds, or places your capital gains in the 15% bracket, you might want to close that portion of Metabolix needed to avoid said tax positions.
Please consult with your tax advisor before making any decisions regarding your final decision regarding your position in Metabolix. That couple of hundred bucks you will spend will be well worth it.
This is one circumstance I believe that tax considerations play an important role as to whether you should hold or sell.
I guess this completes the ENO purge.. except for Senchal.. I say we get this firm down to 25 people and outsource sales and inventory … take it down to a 10mm per year cash run rate that can easily be carries by a 10mm pound per year (5KT) run rate.. and then have a partner build us a 15KT plant upon which we can become profitable….