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Xerium Technologies Inc. Message Board

investor.gator 10 posts  |  Last Activity: Apr 23, 2015 4:50 PM Member since: Aug 15, 2012
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  • Reply to

    Tesla & Enron Comparison

    by mjjakejacobsen Apr 22, 2015 5:38 PM
    investor.gator investor.gator Apr 23, 2015 4:50 PM Flag

    Except the vast majority of the enterprise value lies in things that don't exist today (gen III, giga). The company's value based on S and X is probably not much more than $3B to $6B.

    It's not entirely clear that gen III or giga are viable in the terms they are described today

  • investor.gator investor.gator Apr 22, 2015 9:36 AM Flag

    Selling prices into the grid storage end market were about 2.5x the prices that auto OEM were demanding when I was an investor into the space. We commissioned a leading national strategy consulting firm to look at the end markets.
    The 'catch' is that there was not one single viable business plan that was based on battery sales to OEMs as a standalone business.

  • --- Utilities are generally willing to pay more per kwh for battery capacity than auto OEMS ($1,000/kwh versus $450kwh is a good ballpark estimate) but how big is the overall market opportunity? Demand is driven by total renewable generation AND viable battery storage designs for those renewable resources. There is no supply constraint arising from not enough cells)
    --- Grid storage is already at least a decade old if not older. How is TSLA's offering any different than the existing market leaders

  • TSLA is announcing two new products 1) grid-scale battery packs and 2) home battery storage
    These are really two very different end markets
    1) Grid-scale: the primary use for grid scale packs is capturing renewable energy generated at times when the grid does not need it. From the AES 10-K
    "AES is the world leader in battery-based energy storage, with 228 MW (power plant equivalent dispatchable resource, including supply and load capability) in operation or under construction.
    ◦ AES has the most comprehensive and accomplished fleet of battery-based energy storage in the world
    ◦ U.S. Energy Information Administration (EIA) forecasts 28,000 MW of new renewable capacity in the next ten years and 82,000 MW of power plant retirements over the same period
    ▪ Energy storage can serve as a replacement resource, to absorb renewable energy
    ◦ AES Advancion is a complete battery-based grid resource offered to utility companies and renewable developers
    ▪ Specifically, AES cites the following project:
    In October 2014, AES Southland was awarded 20-year contracts by SCE, to provide 1,284 MW of combined cycle gas-fired generation and 100 MW of interconnected battery-based energy storage. In addition to replacing older gas-fired plants with more efficient gas-fired capacity, SCE chose advanced energy storage as a cost effective way to ensure critical power system reliability. This new storage resource will provide unmatched operational flexibility, enabling the most efficient dispatch of other generating plants, lowering cost and emissions and supporting the on-going addition of renewable power sources

    --- So...where does TSLA fit in to this market? Will they try to compete with AES and others and provide the solution (see AES Southland win) or will they live further down the supply chain and just provide the batteries to the solution providers?
    ---- Utilities are generally willing to pay more per kwh for battery capacity than auto OEMS ($1,000/kwh versus $450kwh is a good

  • investor.gator investor.gator Mar 26, 2015 10:35 AM Flag

    Why do you think they repaid ~$450M so many years ahead of schedule at a time when they were:
    1) still burning cash
    2) about to enter a period of increased spending knowing gen iii was on the horizon

    It's not unreasonable to conclude that after some of the poor underwriting decisions came to light the DOE was under pressure to clean up the loan portfolio. Within that portfolio was tesla, busting covenants left and right, seeking amendments and waivers for their business building $80,000 cars while being unable to meet the conditions of the loan designed to protect taxpayers

    Seems like someone at the DOE figured out tsla was headed south but could still raise enough outside capital to pay back the DOE loan.

  • The DOE loan program is back in business (Alcoa, $250M) as of this morning. Apparently they have $16B available. Keep in mind, this program lent money to fisher (bankrupt), VPG (bankrupt). It's sister program (under the same management) lent money to Solyndra.
    Given Elon's desperation for cash and the DOE's willingness to lend money to poor credit risks, I would say there is a very good chance TSLA could get at least $2B from the program (Ford got $6B, Nissan got about $2B)
    Hopefully someone in congress will keep an eye on the DOE and prevent them from making a 'loan' of taxpayer dollars to a company that has no cash flow.

  • Reply to

    Giga - delay ===== good or bad

    by kbodie77777 Mar 22, 2015 7:17 PM
    investor.gator investor.gator Mar 23, 2015 10:52 AM Flag

    Li-ion battery making capital equipment for large format prismatic cells has a very long lead time and is the major bottleneck item when building new capacity. Whether or not it is true to the same extent for cylindrical cells I don't know but it's a good bet there is at least a significant planning constraint. If Panasonic didn't commit to Elon's vision early and order the equipment, it is unlikely they will be able to fulfill their commitment as interpreted by Elon on schedule.

  • What's your best guess? Below is a straw man to get the discussion going:

    I) Convertible Notes
    NO: The company already has a substantial amount outstanding ($1.8B) and the stock price is well below where it was at the time the 2019 and 2021 notes were issues in March '14 so investor appetite may be limited due to lower stock price (and of course the asset coverage and total leverage)
    YES: converts limit dilution and generate big fees for underwriters (especially since TSLA has entered into a call spread for each previous convertible offering, generating even more fees).
    * YES BUT: Could the company call the 2018's early and re-issue more (i.e. call the $660M 2018 and issue $1.2B+ of 2022??). Current 10K doesn't describe call provisions in enough detail to fully analyze.

    II) Common stock
    NO: Dilution and psychology of sub $200 price
    YES: Quick, relatively easy

    III) Preferred Stock
    NO: seems unlikely for a company this size and stage
    YES: company may need to entice investors in order to raise enough capital

    IV) Strategic Investment (would take the form of preferred)
    NO: Company has already tied up and subsequently dissolved partnerships with Daimler and Toyota (and DOE). BMW has said No. Elon is notoriously unappreciative of partners.
    YES: Apple -- not a bad way to tip toe into feeling out an acquisition and coming away with options for their own EV development.

  • investor.gator investor.gator Mar 13, 2015 5:14 PM Flag

    Is that from closing out a swing trade or is it from day trading? One trade or multiple trades on intra day swings?

  • Reply to

    CHINA

    by ballcoach_30 Mar 9, 2015 9:21 PM
    investor.gator investor.gator Mar 11, 2015 4:56 PM Flag

    Daimler, not Chrysler
    ------
    Also, to the list of welfare handed out to TSLA, please add a 'loan' from the DOE at 2.5% interest rate for over $400 million. The money was supposed to be used to build a $40K EV, but TSLA bait and switched after they couldn't execute.

XRM
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