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Energy Recovery, Inc. Message Board

  • arvedarve arvedarve Nov 18, 2012 2:28 PM Flag

    ERII lost $ 40 mill. in valuation on Isobarix press release

    ERII's Stock price closed at $ 3.10 on November 5 after been steadily climbing since a September 11 low closing of $ 2.41, but the two months rise abruptly ended when a press release on November 6 informed that Isobarix had replaced a 200 lbs PX-180 with a 30 lbs XPR-509SL inn Cancun, Mexico. Despite the expected and improved ERII earnings report on November 8, the fall continued and the Stock price closed on November 15 at $ 2.46, effectively earasing the 2 months gain completely.

    This is a very omnious sign that much worse news is coming soon, and investors who wants to hang onto this Stock must stomach a very, very high tolerance for risk in the coming months.

    Isobarix is doing quite well according to the news release about their installation in Mexico that really shows what their XPR technology is all about. ERI will certainly start loosing market shares in the coming year, no customer will pay twice for similar performance and 6 times more weight. The company does not have competetive IP anymore and currently floats on their past track record, but that cannot last. Once Isobarix gets the first big installation, ERI can no longer proudly sail with the ballast in the top of the mast and will never see profit again as they will be eating their own cash until it's no more.

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    • Thanks for the good reply. Is it possible that ERI will copy the Isobarix design and keep their market share? They have sales momentum on their side. Can't they just redesign with a titanium shell to keep the business? It seems that using ceramic for the outer shell was a bad idea.

      • 1 Reply to intensemusiclover
      • The situation for ERII is far more serious, although it does not matter, their patents are mostly expired and they can not copy Isobarix design, because they have a patent that will last 12 years. The real issue is that ERI's PX technology is not competetive against the axle based XPR technology. The sleeve used to position the PX rotor consumes space available for a large flow increase with an axle in the center, and therefor a similarly sized XPR device has more than twice flow capacity and because the price is proportional with capacity, Isobarix can offer lower prices and still make good profit, while ERI can not reduce price or loose any market share and stay profitable.

        Sentiment: Strong Sell

 
ERII
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