You are comparing a total project cost of Essen to only a partial cost of the Chicago project (the $60m is DHS contribution, we don't know the total cost). So it's hard to say how meaningful the comparison is.
There could also be some unique differences in the projects that make it hard to compare them apples-to-apples.
But your point is well taken and I think it's interesting.
I agree with your last post, lafeet. As far as the price tag of Manhattan vs Chicago REG, the original pr for the Manhattan project stated "DHS will provide up to $25 million in total funding for the $39 million project."
DHS funding for Chicago $60 million, I haven't seen any mention of how much they expect the total project cost will be. I think Manhattan will connect two substations. Maybe the higher cost for the Chicago project is because they plan to connect three or more. But I'm not aware if they've disclosed that detail yet.
Fred, you are right in that it's a cost-share project, and the utility will be sharing an undisclosed amount. From the July 8k:
"Under the terms of the Modification, the Company entered into a multi-phase cost sharing arrangement, in collaboration with a major U.S. utility (the “Utility”), pursuant to which the Company, DHS, and the Utility will fund the manufacturing and deployment of the Company’s Resilient Electric Grid system (“REG”) into the Utility’s electric grid."
"...The total funding for this project expected to be provided by DHS under the Modification is $60.0 million, which represents the total amount of revenue the Company is expected to recognize from this project."
Also, the DHS stated that to proceed from the planning phase to construction will require the financial commitments of all the parties.
I never said they were getting this for free. I wouldn't buy a million dollar house, because I can't afford it. If you offer to pay $800,000 of it for me, I would certainly consider. So, again, it can't be very compelling from an economic standpoint if it takes $60 million in taxpayer money to convince the utility to take it on.
All the DHS money flows thru amsc. An unknown amount of it simply gets passed on to the utility. For the rest, amsc states that it will cover their incremental costs and a portion of their fixed costs. I do not believe this project, if it actually proceeds, will go very far to reduce cash burn.
Meanwhile, lafeet's response was to cut and past info about a project which is also govt-funded (the EU), and uses the less expensive 1g wire rather than the more expensive 2g wire that amsc produces.
"From a strictly economic standpoint it can be too."
It can't be very compelling from an economic standpoint if it takes $60 million in taxpayer money to convince the utility to take it on.
I'm sure you will compose a thousand words to counter that, but it's really quite simple.
Closing was on or about Nov 13. $9 million ain't that much. It could be almost anyone. I think it was yankeeclipper.
Once the Sinovel disaster happened, I’m not sure if amsc could have been saved, regardless of who was in charge. Yurek stole the lifeboat and left the women and children on a torpedoed ship.
What I do see are posters here who have obviously taken a hard hit and who, instead of learning a lesson, look for someone else to blame. Owning the stock is a gamble. Investors or traders willing to take that gamble should be aware of the risk, and take responsibility for their own decisions instead of blaming management.
Yes, if the full value or the contract was certain to be recognized, and if the revenue to be recognized were to be realized faster, then I think the stock would react more favorably. But ...
(1) As long as statements like this hold true for future REG contracts, it will be evident that profitability will be limited (cut and pasted from the 8k): " The funding to be provided by DHS for the project is expected to cover all of the Company’s direct incremental costs associated with the project, as well as a portion of its fixed costs.
(2) I suspect future REG projects will also require a planning period before construction and the bulk of revenue begins. I'm sure each city will be different and will require its own plan
(3) Revenue from govt projects like this are often delayed, and sometimes not realized in full.
I think 300 crore is about $49 million. Cut and pasted:
Two major companies, Cadila and Inox Wind, have drawn up plans to make big investments in Madhya Pradesh. Cadila, which plans to invest about Rs. 500 crore to set up a pharmaceutical unit in the newly developed industrial area in Jhabua district, has been allocated 95-acre land by the state government while Inox Wind, which eyes investment of more than Rs. 300 crore in setting up wind energy equipment plant in Barwani district has been allocated 42-acre land.
The state government is developing several new industrial hubs where large tracts of land are available. Inox Wind is a fully integrated player in the wind energy market with manufacturing plants near Ahmedabad for blades and tubular towers and at Una (Himachal Pradesh) for hubs and nacelles.
It plans to set up another facility for manufacturing blades and other equipment in Relwa Khurd industrial area in Barwani district. "The two projects have the potential to generate more than 1,500 jobs," a state industry department official said.
The market already expects revenue to rise compared to last quarter. Guidance for next qrt $18-$20m and for full year $65-$75m. First six months of fy they bagged $24m in revenue, so if they come in next quarter at $19m, that would add up to $43m for the first nine months. Subtract that from their guidance range for the full year, and it looks like management expects anywhere from $22 to $32m revenue for 4q.
The market also has some expectation for REG revenue, but that is less certain due to the nature of govt projects like this. Same thing for Navy degaussing.
The market is also aware that REG will probably be only minimally profitable.
Since its common knowledge that revenue will increase, that information is presumably already built into the stock price. You have to surprise above expectations to build shareholder value.
REG and/or Navy news could pop the stock, but probably only temporarily. We already saw that the first REG announcement was met with enthusiasm that soon fizzled (judging by pps).
What's needed is continued growth from Inox and a second wind customer achieving meaningful prodcution.
Just my opinion. GLTA
Dilution, maybe ????
About 95 million shares out after the offering. If it's worth a dollar a share, the company's total "worth" (market cap), is 1$ x 95m shares = $95 million.
If you add 80 million shares, you get 175 million shares out. If the market still values the company at $95 million at that time, then the share price would be $95 million / 175 million shares = 54 cents per share.
Sorry but I think you are mistaken. What was "clearly stated" in the pr was that they terminated the $30 million ATM, not the $100 million shelf. The shelf states that "We may offer and sell up to $100,000,000 in the aggregate of the securities identified above FROM TIME TO TIME IN ONE OR MORE OFFERINGS."
(caps are mine)
He or she owns more than 5% and I think that means they have to file a 13D within 10 days.
Happened a bit sooner than I thought it would. Actually, I had an order today to buy at 0.89 (not filled, of course). I might get in tomorrow. It could be good trade.
I doubt AMSC's customers care very much about amsc's stock price. What they care about is if amsc will remain soluble long enough to honor the warranties on their products. Customers will be very reluctant to buy amsc's products if they think amsc could go bk before the warranty expires.
Reassuring customers may have actually played a role in amsc's thinking about this offering. But the dilution sux for the shareholders, doesn't it?
"12 years ago it was down to below $3 with about 40 Million shares out if I recall."
Actually, that is incorrect. It was half that. Cut and pasted from the 10k that came out in June 2002, "The number of shares of Common Stock outstanding as of April 30, 2002 was 20,536,459."
"11 years ago the share price jumped into the teens with what turned out to be a $100 Million Navy contract for two motors."
Only partially correct. The stock dipped below $3 in Oct 2002. It recovered to $9 with the Navy contract, but what skyrocketted it into the teens, virtually overnight, was the massive New England blackout.
Aug 14, 2003 the stock closed at 9.25 on a volume of 338,000 The blackout took place just after market close on that day. On Aug 15 2003 the stock closed at 13.20 on volume of 4,432,900. (you can look that up yourself)
Best of luck
Browsing through the exhibits of the 8k, I think the buyer's name is being withheld. The underwriters pay amsc $1.03 for the shares, and I guess they pass them on to the actual buyer for $1.10. In the warrant forms, the buyer is referred to as "The Holder" and is not named, as far as I can see.
Paragraph 1H of Exhibit 4.2, “Form of Warrant” caught my attention:
"(h) Beneficial Ownership Limitation. The Company shall not effect the exercise of this Warrant, and the Holder shall not have the right to exercise this Warrant, to the extent that after giving effect to such exercise, the Holder (together with the Holder’s affiliates) would beneficially own in excess of 4.99% (the “Maximum Percentage”) of the shares of Common Stock outstanding immediately after giving effect to such exercise."
86.507 million shares outstanding as of the last 10q. The offering of 9.090 million shares brings outstanding to 95.598 million, and I calculate that means the Holder owns 9.5% already. So, if I understand this correctly, that means the Holder would have to SELL a whole bunch of those shares to be able to exercise even a portion of the warrants
Lets say the Holder sells all his 9 million shares originally owned. Not counting any further dilution via stock incentive plans, etc, if the Holder exercised all the 8,182 million warrants, it would bring the outstanding shares to 103.78 million, and that would be an ownership of 7.9% which would not be permitted.
Of course, there is still something like $90 million worth of shares that could be offered under the shelf, so there could be a whole bunch more dilution that would allow the Holder to exercise the warrants. Also, I see elsewhere in the filings that the Holder is permitted to transfer the warrants to someone else.
That is an awesome book. A true survival story with a happy ending.
AMSC also had its rope cut and is undergoing its own survival story. We don't know if this one will end happily or not. For anyone who bought at $20 to $40 it looks very unlikely to have a happy outcome.
Closing on the offering on or about Nov 12 (today), according to the p.r. Might see a form 4 or S3 within a few days. Whoever it is, they bought at about .90 to 1.00, and the stock is apparently marching in that direction.