The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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HJB1. I think you raise a very good point. I have tried many plant based foods, I've never tried them more than once including Quorn. I love vegetables, but not disguised as sausages or burgers or dinosaurs. I dont like what happens to animals and particular the intensive farming of them. Its appalling what has been allowed to go on in the EU fishing policies. I love eating fish and meat. If we can produce meat without killing animals , meat which has better protein, without growth hormones, with low or no cholesterol, revolutionise the use of land and lower pollution, make better use of land, cleaner rivers cleaner seas, that has to be a goal worth striving for.
Jim Mellon talks much about kindness to animals, improving the environment and the health of us all. Price is key in achieving these goals and he also mentions price parity. I have had a good look at plant based foods available. As prepared meals they work out at between £12-£15 per kilo which is about the same as good cuts of meat. The goal is for cell meat to reach parity with animal meat, and eventually animal meat which will still be in demand , but not being produced on a mass produced scale will become ever more expensive.
The other major benefit is possibly ending future pandemics and therefore potential extinction. Bluenalu is set to reach trial market by next year. It may be quite a while before it fills shelves in our supermarket. Some eastern countries import up to 95% of their food so its no surprise to see huge corporations like Mitsubishi and others wanting to aid and hasten the process of Bluenalu.
I have been watching with interest bought the book and the T-shirt and although I thought the sp was way ahead of itself I think this was a very canny move by management to utilise the recent spike, as most good businesses have done in the last year, to further capitalise their investments at a very attractive price.
RTW2 - This quote from Jim in the interview linked above explains why...
"a couple of other people including Morten of Meatless Farms in the UK talk about Quorn and you know, some of the other companies in that area. The problem is that they don’t really have the IP that cell ag has. They’re effectively marketing companies, and so you and I could set up a plant-based protein company tomorrow, call them whatever we want, and we’re going to be going up against the big established play-ers like Kellogg’s, Unilever, Nestlé, who have a all got their own brands now, and even some of the supermarkets have their own brands, and McDonalds has brought out McPlant which is its own brand of plant-based burgers, and it becomes a marketing game. That’s very expensive and it would be difficult for us to have some defensible IP in."
Essentially Blue Nalu has defensible IP, wheras Quorn does not.
1750mk1 - I am merely looking for an explanation as to why you wouldn't use the same valuation metrics as for an established alternative protein. I am not saying you should - but why not? What makes Beyond Meat or Oatly valued so differently to Quorn? This is just food. It's a very competitive market. The fact that it is high tech food does not make people any more hungry and motivated to eat more. It's just about what size of market share they can take and how much they can sell their product for compared to their input costs (any they may well have much higher input costs due to the energy intensive nature of their production).
RW - I believe the numbers came from this analysis.
https://www.proteinreport.org/reading-tea-leaves-first-cultivated-meat-ipo
" use the same valuation metrics as you would for Quorn " ? ... for Blue Nalu ? ... give over lol.
Wadnob - I too am interested in what the potential market value of BluNalu will be so thanks for putting down some figures as a starting point. It would be interesting to see what others can do to fine tune this to get a better feel for the potential market value. I've added a couple of points as my tuppence worth below:
1 - You've guessed $5 / pound revenue, but I think this is optimistic. In 2019, the average market price of salmon achieved by Mowi ASA (who I think is the biggest listed salmon producer) was 5.79 Euro / kg so that's about $3.20 / pound. I think "natural" salmon would sell at a significant premium to cultured fish of any variety, so the real revenue might be closer to $2.50 / pound.
2 - You're kind of assuming BluNalu could dominate the fish market - I think guys like Mowi may react to such a shift in the market, so you should probably apply at least a 50% discount to your estimates of what market share they will achieve.
3 - I'm not clear what you mean when you say you are applying the "Semiconductor EV ratio"? What is this and why would it be relevant in the food tech industry. Although Beyond Meat and potentially Oatly have eye watering valuation metrics, this is not universally the case for alternative proteins. For example, I read recently that the value of the well established Quorn brand is probably only a few hundred million. Is it not equally valid to use the same valuation metrics as you would for Quorn.
Anyway, just trying to see if your numbers could be fine tuned - at present, I think based on points 1 and 2 above, that could reduce the value to 25% of what you have guesstimated and point 3 could reduce it significantly further. Any advance on that?
Nope. The warrants will cost 29.5p to exercise so free they certainly are not.
Thinking longer term, I would rather be invested at 26p with a minimum £62.5m war chest than at 36p with no war chest
There is the broker option too, if you're willing to pick up the phone to the details in the announcement.
Erm, you still have to pay to exercise the warrants, they’re not free
Do you know the date of this?
Thanks to those who have been helping me familiarise myself with Agro. At 9am this morning I asked if a raise might be on the cards, then boom 10am rolls around...
I know to existing holders today's drop won't have been pleasant, but all of the fundamentals for this to be a once in a lifetime share are still in place, and there will have been many- myself included that have decided to join you today. Truth be told I was ready to join at 35p, so today was a no-brainer. New investors pouring in, and a growing war chest to help move forward. I'd say the future looks bright.
Best of luck to all. I'm looking forward to continuing to build my position here moving forwards