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You really want this share price lower don't you?

Invinity is bringing a brand new higher performing battery product to market and it is still only at the pilot stage and not set to launch for another 3-4 months. They will be updating the market on progress to reduce costs at the end of this month. Prior to that, everything is just pure speculation as to what they can or eventually will achieve.

You just want to scare monger so you can max out your short or gain a better entry price. I will take your eventual disappearance as a sign the bottom has finally been reached.

2/2

So absolutely there is work to do on the cost side of things (although I repeat they haven't shared how much yet) but it isn't preventing a manufacturing rate being introduced that "commences the drive to volume-based efficiences." That lends itself to a situation whereby Invinity has the Mistral based work available to increase its output but is controlling the roll out in H1 2025. That would also imply that they have done a cost exercise (after all Jonathan Marren was the CFO until recently and has always messaged his desire to control cash outgoings) and are setting a plan that is comfortable for the business and respects the fact they raised a ton of money just 2 months ago.

"Whilst this (cost reduction) exercise completes" implies there is a plan and an expectation as to how they get there.

"will set the stage for further growth in volumes in H2 2025" implies the mian cost reduction will be complete in H1 2025 which would allow increased volume with associated cost reductions to begin to be applied.

Why because we were told that "cost reduction is expected to come through a combination of continuous design improvements, supplier efficiencies and increased production volume."

So firstly it design improvements and supplier efficiencies (expected from now until H1 2025) and then the production volume which should be by far the biggest contributor to cost reductions.

"before commencing full volume production in 2026 when the Company intends to achieve EBITDA break-even" which is when the house broker VSA expected them to reach it be it that it felt like it was early 2026 and not later in the year. But again ties into my 6 month delay comment.

The reality is that the actual delay may well be a little longer than 6 months but it shouldn't be much more if they can achieve the cost reductions they are planning for.

Where I have concerns is over the regulatory progress in the UK and politics in the US but I am soothed by the knowledge that "the development of Mistral is progressing strongly and the production prototype has achieved its performance targets." Meaning the most important selling point worldwide is still intact. So sales potential also remains real.

So in between all the doom and gloom that came through in the trading update were several key developments which were completely ignored. This does not mean that Invinity won't require more funding at some point just not as soon as some would like us to think. Nor does it guarantee that the business will be a success. More a case that there is perhaps more to be positive about than felt possible on Friday when the drop in SP drove so much fear.

Still, I have to question why Invinity's new CEO felt it necessary to deliver a trading update without having answers to the cost reduction questions ready. That alone set up the SP for this fall and he should reflect on that because I will certainly be telling him at the interims.

1/2

A few points I would add.

I believe it was me that said it's “just a 6-month delay” because I was considering the reality of the Mistral rollout by YE. There was never going to be an immediate deluge of Mistral contracts directly after launch. There would have had to be a ramp-up phase. If the market is disappointed by this then it wasn't paying close enough attention to what the company has been telling us.

Where the main immediate disappointment lies is in H2 2024 when contracts were due to be announced and work commenced on them. This has clearly been worsened by the political and regulatory policy uncertainty in both the UK and US but H2 was certainly expected to be the start of a cascade of news and the loss of this if nothing else led to a mass exodus of traders. That said we only saw 2.5% of shares traded which I maintain is out of sink with the size of the share price reaction.

But despite the loss of work we are told that,

"Whilst the delay in closing deals will have a significant impact on full year 2024 revenues, the Company's anticipated loss position is not expected to be materially different from its expectations."

So most importantly the cash position at YE will be similar which is very important and reflects the reality that contract announcements in H2 would have been more about headlines than actual paid work.

The way the trading update was presented it was easy to think that the BOD has lost its mind but I currently take this to be a loss of messaging between how it came across and what the true reality is. I struggle to conclude that they could be so far away from the messaging presented in the fundraise (Mistral 46% cost saving vs VS3 upon launch) after just 2 months. Possible but for me unlikely especially when we are to receive an update on progress towards cost reductions at the end of Sept.

Key to the future is this,

"Although Mistral has already demonstrated performance in-line with or ahead of expectations, the Board has decided that additional time is needed to complete the cost reduction exercise ahead of volume rollout, while maintaining a level of manufacturing sufficient to commence the drive to volume-based efficiencies. Accordingly, whilst this exercise completes, the Company believes a more cautious increase in Mistral deliveries during H1 2025 is prudent and will set the stage for further growth in volumes in H2 2025 before commencing full volume production in 2026 when the Company intends to achieve EBITDA break-even."

No, because back in 2015 BMN didn't own an operating vanadium plant and mine. Infact they'd just finished being an iron ore and tin asset owner having been spun off by Obtala Resources. It was the vanadium element of their iron ore assets that got them changing direction.

When I picked up the baton they were dropping hints about vanadium plant assets in South Africs but were well off obtaining them. My research established that they were going to go after Vametco (sorry was confused earlier on names and so said Vanchem). Not many believed it and certainly not the market. BMN would never have risen what was closer to 4,000% off its bottom if they hadn't secured Vametco. I not only rode out the acquisition but also researched hard on their chances once it went to the competition commission etc which dragged out well over a year. That was all well before the new rebar regs but they came along on the back end of it all.

I have rarely before blown my own trumpet about what I did on that BB for those 3-4 years and certainly never on a BB. How I supported other investors. How I battled naysayers and trolls with evidence time and time again. I committed 12 hour + days to that board to help maintain moral. Did I do it all out of the goodness of my own heart? No. I wanted to win. But I also really believed in the investment and was genuinely enthusiastic about winning with other Bushveld investors. We were a team. Yes, the overall win was greatly enhanced by the regs that came along later. But we had to be in before that point to catch the entire run and I was a major part of that. The bottom after all came in 2016 and the run against the regs wasn't until late 2017/18.

I don't care what you think about me. I have tried sharing my sells. Even did it with BMN when I returned. What happened? I got a load of rubbish thrown at me which could only be answered by dedicating too much time to explaining and less time to actually researching and trying to make some money. So I stopped. Not worth it. Ask a great many other well followed names on Twitter and they will tell you the same. It's more trouble than it is worth.

I'm done here and I am done with you. Good luck with your choices.

Lastly, nobody shook me out of BMN when my initial investment lost 80%. Research told me that the market was getting it wrong and that if anything I should double down. What I actually did was throw the kitchen sink at it because my research told me it was the right thing to do.

Whilst I no longer need to throw everything I have at stocks like IES I still don't feel the need to be shook out of my position because the consensus (from those that have done a fraction of the research) is that I should.

What I do in this situation is I dedicated my time to checking what I have been told and what I have already learnt. If that means weekends then so be it. The most important thing is getting to the bottom of what is going on as soon as possible. Then allowing that to guide me and not random posters who have proven nothing other than that they have an opinion. One that comes with words that are designed to create the most doubt.

Opinions aren't worth s**t without evidence. Right now I am seeing a new wind technology suitable VRFB product that is industry leading because it is already hitting the performance targets it promised and is backed by one of the largest wind developers in the world. That has value.

What I am also seeing is that costs aren't where they should be at this stage and so more work is needed there but a plan is in play. The product isn't even on the market yet and still people want to say it has no chance. It will never be costs effective because of the wording in one trading update.

As for "Only China is adopting VRFBs." Really? Do you think that the +6GWh of project pipeline that Invinity had established by June this year was for projects only in China? I will double down on that by highlighting that not a single Gamesa project sits on that list. How many MWh can they generate in business in the coming years? I would say a ridiculous amount.

So no it's not about about China. But it is about cost, regulatory understanding and support, and time to execute. These things come with risk which is now higher than it was prior to the trading update. How much I am still working on but so far I do not see good reason to panic and sell up. Not when I know that these guys have at least 12 months cash to deliver on their promises.

One thing you seem to miss here is that I didn't hold BMN all the way down like many others perhaps did.

I made it clear at the time that I sold all my stake at 42p because I understood that c. 3,000% was enough. That it happens maybe once in a lifetime and I would be a fool to not take it. What others decided to do is their burden to carry.

That I got the revisits wrong is true and I can definitely be criticised for that but I am sick of being blamed for all the negatives when so many won off my back and what was 3-4 years of total dedication to that stock.

Hello Cindercone,

I am not trying to rescue my investment I am attempting to understand the trading update and dissect what is really going on. I have always done that publicly because it keeps me on point.

BMN was avery long journey and many easily forget that I drove the discussion when BMN was on its backside back in 2015/16. That it was I that discovered that they were purchasing Vanchem before it was made known and backed it hard a c. 1p. I was not alone and many ran with me and used my research as their base. Yes several times I returned thinking BMN could recover but the market and the economics moved against them- Did I get that wrong? Yes, I did. But did I get the 3,000% rise correct between 2016 and 2018. Yes, I did.

This is not about adoption but regulatory support in the UK and US. In the US they have that support but the election is the hold up.

That does not mean that other jursitictions won't follow through. Long duration at 6-10 hours is currently best suited to VRFBs. But yes the process of acceptance has taken far longer than many have expected. That doesn't mean that it cannot be achieved and Mistral has as good a chance as any. Whatever onlookers or people like you may think of me.

As for shorters I have had several people cross my path since Friday making it quite clear they are shorting this stock. They are using the market sentiment and lack of liquidity as they are on many stocks. After all just 2.5% of total shares in issue were traded on Friday and it drove the stock down by as much as 50%.

One other thing that should not be lost sight of. In July Matt Harper said,

"The average opportunity size in our pipeline now is over 100MWh."

Plus, the reason for the advanced category of projects rising to +450MWh in Spring this year is because "some existing customers who already have our batteries, already operating our batteries, came back with projects that are orders of magnitude larger than what they had previously contracted for."

That is so important to understand in terms of trust and desire to use Invinity's products. Those opportunities cannot have gone away. They look to be merely being slowed release wise so Invinity can improve its margins.

Yes fully aware of that relationship and the one with US vanadium.

I will have many questions for the interims update. There was such confidence between Matt Harper, Jonathan Marren and the rest of the team. That cannot have all evaporated in just 2 months.

That Item 6 you mention is no different to what was said in June.

From the FY Report 27th June

" Invinity has developed relationships with various partners to support a capex-light strategy to optimize our supply chain and U.S. manufacturing."

This is why I talk about the wording of the RNS. This is not Invinity suddenyl hitting a probelm with cost or local content but a continuation of their development path that along the way requires a slower roll out of Mistral.

Let's take another one.

"Expand our use of partners to reach new customers outside our core markets to enable us to scale in a fast and cost-effective manner."

From the June Report

"In February 2024, Everdura signed a manufacturing agreement for Mistral that gives Invinity a royalty based on a percentage of their Mistral revenue in exchange for direct access to our supply chain and the ability to order our proprietary cell stacks and software directly from Invinity.

We are pursuing other similar high-potential relationships and look forward to announcing them in due course."

So again a continuation.

I also remember the Invinity team being clear that Everdura was already building their production facility and were very keen for Mistral to be finally released so they could begin bringing in orders. Royalty based revenues but sits completely outside the core markets where the reguöatory hold ups are occuring.

I think it would have been better to have had no trading update and simply to have delivered the progress on solutions with the slow down news on Mistral in late Sept.

Chinese companies currently are driving VRFB adoption but mainly in China only. They remain heavily subsidised and their batteries currently would not match Mistral on performance. Although they have managed to instigate greater scale faster than Invinity. Where they do offer direct competition is in vanadium supply demand but right now the Chinese steel industry is in decline and demand there is falling which gives the VRFB players there some slack. But eventually they could drive higher vanadium prices if Chinese vanadium suppliers cannot keep up. Last time I checked several of the largest vanadium producers are tied up with VRFB manufacturers for electrolyte supply.

Having spent some time reviewing the situation with Invinity I can only conclude that this is an overreaction driven by a market that hates bad news.

Mistral launch is still coming by the end of the year and its performance to date has met expectations. That is key here because it is those performance characteristics that are going to generate the sales. Invinity clearly needs time to adjust the supply chain to reduce costs further to meet industry margins but I read nothing in the trading update that said this would be a problem. Looking at previous updates to the market we are talking about a c. 6 month delay which whilst placing additional pressure on cash will not break the bank. That isn't to say that the market doesn't have a right to mark them down until they begin proving it but the size of the markdown is for me too severe.

Talk of fund raises in the next 6 months on Twitter is purely designed to generate fear and shake the weak or less knowledgeable holders. A tactic that is often used by shorters.

by my calcs Invinity has minimum of 6 months to improve their production costs before upping sales volume. They can get a lot done in that time and I am sure will be keen to show progress asap.

6GWh of project pipeline didn't just disappear overnight.

That doesn't guarantee that the worst of the pain is over but it certainly says to me that the interim update is worth holding for. My opinion only.

Someone raised an issue on Twitter which I answered with a series of posts. Might as well post here for information too.

https://x.com/BigBiteNow/status/1832325573726679226

Definitely LTH.

Yes large position for me Marco and have taken a big paper hit today but I refuse to be bullied out of my position. Staying put in such situations can be seen as having one’s head in the sand but I think the update doesn’t reflect what can be achieved over the next 12 months. So I am prepared to sit tight carry the hit and see what the new CEO can do.

The near 50% drop today is not a true reflection of the update but the advantages taken by those who would pray on weakness coupled with general market sentiment to bad news or delay + stop losses clearly being hit.

As has been stated they intend reporting back to the market on progress at the end of the month. Then let's see where they are. Several here have somehow managed to sum up the entire future of this company from one RNS. Amazing work.

At no point in today's trading update did Invinity say that Mistral wouldn't come to market with a positive gross margin. But it will be volume that delivers the EBITDA positive result that they seek in 2026.

More detail on this would have been good but I expect we will get a lot more detail are interims.

That's fine but you are missing the fact that the grant funded front end projects such as the 84MWh from the US DOE were agreed at a positive gross margin. The same should apply to the 30MWh LODES project because they are designed to support the company whilst it grows.

Combined they should deliver around $60m in revenues.

From the DOE project win release.

"Invinity expects to sell its Mistral systems for these projects at a price point this is approximately one third more competitive than recent VS3 sales, and deliver them at a positive gross margin in support of the Company's industrial strategy."

The issue they have highlighted today is with commercial roll out which is why they will slow those down in H1 2025 whilst they improve the costs on Mistral. It is not rocket science that a brand new product with new supply chains requires fine tuning on the supply chain side.

But by all means don't let get in the way of your doom and gloom strategy.

Sorry it was +500MWh as of 17th June with over 6GWh of pipeline altogether. That hasn't just simply disappeared.

Undoubtedly some is up in the air until regulatory or political clarity is achieved. But we mustn't forget that IES mamagement has 6-12 months of preparation and progress ahead of it to deliver even more of this pipeline and indeed to add to it. This is not about demand or interest. This is now about delay, regulatory uncertainty and profitability on Mistral.

I would be shocked if Labour doesn't come through on the cap and floor mechanism. I have read the paper and it is clear that it is required to support long-duration storage which ties in with their drive to deliver far more renewable energy. But politicians can be selfish and driven by their own agendas so its never 100% until it is.

The delay they can get over and have the cash to do so. That leaves profitability which I am sure they can answer the question on but there is no more doubt and that leads to a drop in belief. i just think its well overdone and believe the BOD has handled this poorly.

They have a large pipeline with over 450MWh of advanced projects. Many of their qualified projects will be attached to Mistral successful launch. So yes they do have projects. Be it some are attached to the regulatory delays highlighted today.

Under the current schedule that was known about in June Mistral is not late and nor does today's update say it will be.

That is a key point from today's update which has been lost in all the other messaging.

This for me was a key part of today's update lost in the haze of negativity and delays.

"the Board has decided that additional time is needed to complete the cost reduction exercise ahead of volume rollout, while maintaining a level of manufacturing sufficient to commence the drive to volume-based efficiencies."

They then say that this will "set the stage for further growth in volumes in H2 2025."

This indicates that there is a plan around Mistral projects released in H1 2025 and that there will be enough of them to "commence the drive to volume based efficiences" with more then expected in H2 2025.

If they deliver that then today's SP will look very cheap. That is not advice or encouragement to buy but a reason why I won't sell my holding at sub 12p. I will wait and let all this pain subside and see what they are doing to reach this at the interims. Lots of question will be coming their way.