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Bmac turned up on this AFC board at 10p talking it down, and has so far talked it all the way down to 22p. If he was shorting at 10p, I can see why he would be sweating so much and spewing forth such long winded desperate posts, pointing out the bleedingly obvious such as AFC doesn't have any sales yet.
Yeh a reversal back up is what's coming. Like the earlier post, I don't suppose any multinational giants started and developed without cash calls. Laughable to use that argument without looking at the IP, industry and global needs of such tech.
Chippy, interesting thought about de Nora and Alkamem. If they would be one of the main licensees for this product, with a $1bn market to go at, then that could be very good indeed. They could be in a stronger position to push this forward rather than AFC themselves. And with a royalty of, say, 5% of gross revenues (total guess but in line with royalty levels for other tech businesses I’m aware of) then that could be very attractive.
Bmac I'm guessing you missed Beyond Meat, Ocado & possibly Amazon from back in the day.
Todays good numbers are tomorrows fish and chip wrappers.
Bmac, i agree when you say a fund raise is on its way but, we were expecting it.
In Bond's interview he mentioned "we could always do more with more " and "we'll see what the new year brings" comment are a big clue ;-)
But will it be the new year? It may well be very soon if interest is high from investors who want to be in before launch at these prices. It might be already done and taken up.
I'm hoping a settled sp of 25p soon. It may even get higher.
Bmac, how do you value Ceres then at £325m and a big loss year on year ?
Fagen39.... Well, isn't that a very considered investment thesis. Good luck with that one.
It's your money of course. All the best. Bmac
Bmac came onto the board last week and told everybody to sell at 9p.
To back his argument he gave some figures which he got wrong.......twice!
I dont have an idea really how far this company can go but with denora and rolec singing their praises then they surely have a decent chance.
Bmac very well thought through and structured, if only the market reacted as logically as your post. Shares like this can easily move on sentiment and ideology it does not always need to be 1+1=2.
Cont… there are numerous other associated issues…. site procurement, design, detailed planning, planning permissions, front and back end engineering, environmental impacts, public safety, health and safety and other such clearances and logistical assessments for every installation, external and internal, affecting both buyer and seller, impacting total costs (not just the cost consideration per KWh) and the timelines to order placements. And so orders may just trickle in over a longer time line and at a much slower pace than many exuberant posters on this board are hoping for or indeed prepared for. Could be years.
For me, a Cash Call is inevitable and nailed on for early in the new year. If you want to buy more then wait until that call is over and the sp has settled and a number of orders are already showing in the pipeline. At the moment… No Warranty (and no established infrastructure to service same) = No sales. All the best. Bmac
Qd22 re your …Thanks to those who are putting the opposing argument to what Bmac has said, but also for my part THANK YOU to Bmac, for a thought through post that helps me to think critically and sensibly.
Humbled that you are accepting that there is indeed a counter argument which has been well thought through. Here is something else you may wish to consider.
People need to take a cold hard look at reality and realistically assess timelines to meaningful order placements and revenue for AFC. The sp has been rising on nothing but hydrogen gas and whereas future prospects may appear bright the pertinent fact is, in the here and now world of today, AFC Energy has virtually no income, no orders, no revenue and no warranties for its products. Meanwhile the business requires substantial cash to survive the near term, and to grow in the long term. Ask yourself this….what is AFC’s revenue right now… effectively zilch, right? Now, try subtracting it’s current operating/running costs away from zilch and you might just begin to see that AFC needs to cover itself fairly soon with a Cash Call and probably a sizable debt facility as well. That Cash Call will substantially dilute everyone’s stake here when it comes. To what extent? Well that depends on the millions to be raised, the Offer share price and whether it will be done as a Placing or via a Rights Issue and if/whether you can and are prepared to buy yourself out of that resulting dilution. And, it’s very probable that in order to attract Institutional interest (which AFC badly needs to strengthen and support it’s share base) that the Offer will be at a heavily discounted price to the market price at the time. Responsible Investment Institutions (Schroders admitted), won’t buy into a wildly inflated share price and blustering on here, trying to imply that they will, is just more gas.
I can hear someone shouting from the background already that this is just another troll at work. Well, no it’s not…it’s about basic maths and the financial necessity for this Company to survive in the short term and grow in the long term. A Cash Call is on its way, that is for sure and beefing up the share price with news flow beforehand is par-for- the-course for AFC. Just look back into it’s past. Happened every time. Some of you are going to get caught if you keep chasing this rise upwards. The fundamentals don’t support it. The gas that’s inflating it is going to go ‘pop’ at some point and some people are going to get caught on this spike. It’s not as though the world and his mate wasn’t fully aware for quite some time that commercialisation of AFC’s fuel cells was imminent yet not even one pre-order has been placed to date. You might like to think about that and ask yourself why that might be. Well it isn’t just the lack of a manufacturer’s warranty for AFC’s products and the non-existent and costly infrastructure needed to support warranties on (perhaps) a global basis that has/will delay orders…Cont in next post
Thanks to those who are putting the opposing argument to what Bmac has said, but also for my part THANK YOU to Bmac, for a thought through post that helps me to think critically and sensibly.
Clearly the institution that stumped up £520k does not agree with BMAC.
Bmac you are not considering revenues from licensing AlcaMem (TM)
"Sadly and painfully for some Bmac is back "
Forget Flower dew or urine for getting compost heaps going well, you just need a dose of Bmac.
Guaranteed to raise the BS levels to previously unknown levels and appear wherever it is not needed or asked for.
BMac - using P/E to justify the value a pre-revenue business in the process of proving the technology is not appropriate. Yes you can talk about future possible revenues and margins and P/E's of a growth business but at this stage it's all pure guesswork.
So Bmac what do you want us to do? Sell out?
Nothing goes up in a straight line and you know no more than the rest of us as to what is coming. A Denora warranty will bump this up based on the thumbs up from the biggest electrochemical company in the world. And alkamem could double their revenue.
Sadly and painfully for some, (those of you that bought in at or near the top) the predicted retrace is under way. There was (and still is) too much hydrogen gas underneath this sp, much of it from posters on this board….a fall was pre-emptiable for the savvy and there is more to come. The £520,000 raised (before costs) from this privately placed Subscription is quite simply peanuts. Much more serious cash is needed and I predict that will come from a Placing/Rights Issue in a few months time, probably January/February 2020. Like todays placing announcement, it will be at a discount in an effort to attract some Institutional interest. Set this against the affect that a rather small Subscription issue had on todays sp and it’s clear what lies ahead. Between now and then you can expect a few announced early orders for EV Chargers and statements of ‘enormous interest’ which may get shareholders pumped up and the sp along with it. Realistically, however, revenue from minor quantities of initial orders will be far too little to support growth on the scale AFC needs going forward. Meaningful growth will take time, longer than some people realise (years) and will require considerable capital investment.
I don’t suppose anyone knows the sort of net margins AFC might expect on revenues from these orders. In the early years it is likely to be quite small because of the investment needed but lets be generous and say 5% to 10% (average over the first 3 to 5 years).
For the purpose of a worked example lets take a generous 10% margin and a very generous and chunky P/E of 50 and 500+ million shares in issue (conservative, could be more than this after the next Placing).
Do the maths…. In order to justify a share price of just 10p (half of where it is today), AFC needs £10 million revenues and £1 million in net earnings/profit (i.e. 10% margin)
To justify a share price of just 20p, AFC needs revenues of £20 million and £2 million in net earnings/profit.
To justify a share price of just 30p, AFC needs revenues of £30 million and £3 million in net earnings/profit.
To justify a share price of 50p, AFC needs revenues of £50 million and £5 million in net earnings/profit.
And so on…you can project the rest and then ask yourself how long a ‘long term holder’ you want to be, to get to where you want to be. Some people are already holding this baby for 10 years+. In the long term we are all dead…as the saying goes. Those of you who are hoping that the sp will rise to 40/50 pence before the next Cash Call, supposedly on EV Charger sales news flow, need to reflect on the above. This one has further to fall, yet some people are still adding at today’s price convinced it’s a bargain. Anyone with contrary figurers (other than the lightweight poster who suggested to me that, ‘it’s all in the IP gov’…. then please produce them. All the best. Bmac