Member Info for chilting

BurrenBoy

Its nothing to do with honesty or otherwise.

Its simply that the cash flow isn't there - that means there will always be the threat of dilution and the SP falls.

More bad news lowers the SP even more and gives dilution more impact.

Its the same story for most AIM companies, especially when the macro is bad, hence the 80% fall.

I know what you are saying Warren, but try to focus on the company not the SP.

If you look at the stats the AIM index is down 26% since it was formulated in 1996 and the FTSE250 is up 320% in the same period.

Many AIM companies have moved up from AIM to the main index and I think ITX has the potential to follow them.

Its these companies that grow out of AIM that are the winners and the SP ultimately grows with them.

My guess is that the way they delivered the bad news this week, in two devastating RHN's, was to clear the decks for a clean start.

The interims will signal that clean start with hopefully good news on short term liquidity.

The BOD must realise that they are living on borrowed time and have to turn things round, so I would also like to see a structured plan for how they plan to do this, with a fully committed timetable.

Clearly the high capex projects are a failed idea - now its time to let the tech teams at Eqtec do their bit and roll out fully funded projects quickly and efficiently, lets see how good this tech really is!

Totally agree oz

https://www.youtube.com/watch?v=OZBpu67tbS0

They do have two loan facilities, one for £10m and the other £2m.

A lot will depend if the have dipped into these yet.

It will be interesting to see what the shorts do now.

I guess they were partly responsible for the magnitude of yesterdays fall and for the rebound today.

I suspect they will close their current positions, but will they start new positions?

Warren

It generally takes much longer than two years to show a meaningful profit on these early stage investments - think 5-10 years, but be prepared to top slice given the opportunity.

Also note that the innovators don't always get rewarded.

Richard Trevithick the true inventor of steam transport, with his high pressure engine, died a pauper despite risking all when he drove the Puffing Devil up Cambourne Hill.

https://www.youtube.com/watch?v=FEjGBgBxSNM

Not sure that it will drift down to 150p Smart.

It does seem to be stabilising around current levels.

But, this is still an excellent buying in price.

As I said the other day - I think that Ocado Retail has far more relevance to the group than was immediately apparent.

So, comments about Ocado Retail become a sensitive issue - they swing the SP causing the volatility we have seen over the last few years and give encouragement to the shorts.

Today is a classic example, my guess is that the fall on opening was probably enhanced by the shorts, who used it to their advantage and also triggered stop losses.

I think that Eqtec will probably pull through and continue to trade.

It has loan facilities in place and even at these low levels will probably seek equity funding.

Current shareholders are stuffed, but its little point selling, just wait on events.

I guess that the SP still has some climbing to do.

Its been rising steadily since the start of October last year and if it carries on at the same rate we could see 300p in six months time - this would be a recovery level for the business and bring it back to the levels of five years ago.

Allowing for some overshoot we could even see 350p later in the year as we enter overbought territory, before the SP settles down for less spectacular growth.

Building a company on whatever scale is always learning business and we all make our mistakes.

These mistakes, often costly, are inevitable.

I have reasonable expectations for EQTEC now, they seem to be moving on the right track.

As for the shareholders it must now be 50:50 regarding another round of dilution and prospects for a return on our investment drift further into the future but its still a hold.

EQTEC seem to have tried to go a step to far handling the Billingham project.

What on the face of it was a good opportunity for maybe a well resourced company, like Wood for example, certainly wasn't for EQTEC.

They clearly seem to have learn the lesson now, but at a cost.

The SP is only one guide to the valuation of a company and usually a very inaccurate one, especially for small growth companies like ITX that trade on AIM.

Investors need to base their investment decisions on the finances and potential of a business and pay limited attention to the SP.

Good news RNS announcements make little difference to the SP in the long term - they simply create short term fluctuations encouraging traders rather than investors - long term its much better to have the shares in sticky hands.

Hello AJP

The timeframe may be unclear but I certainly totally accept John Shaw's following statement -

"With record revenues and new funding, Itaconix has entered a new era of development toward our long-term goal of becoming a large, highly profitable, capital-efficient specialty ingredient company."

As for Enquest, I sold out several years ago.

I do think, however, that high carbon fuel prices are an imperative - they are a key driver to change and will ultimately fund that change - the oil majors of today are the leading suppliers of renewables tomorrow and if they slip from their role they will be taxed to oblivion in the same way as the small North Sea oil companies like Enquest are being now.

The main thing with an investment in ITX is that you need to be extremely patient.

The trouble is that the corporate customers take such a frustratingly long time to develop and market new products, so every thing moves in slow motion.

This is of course the biggest benefit, because one they have the product in the market place then they repeat order from Itaconix.

But don't expect fireworks!

After a few years of observation, I think that Ocado Retail has far more relevance to the group than was immediately apparent.

Firstly it proves the concept in a practical way and continues to greatly facilitate R&D.

More importantly for long term Ocado share holders, profits from retail fund other parts of the group and help avoid dilution - the threat of dilution, with Ocado Retail not showing profits, has probably been the biggest reason for the fall in the SP.

The value of the other 50% of Ocado Retail is obviously enhanced by the profitability of the business.

It should also be noted that M&S are getting far more benefit from Ocado Retail than is evident from the accounts. They are making profit on their own branded good sold through Ocado Retail and getting volume discounts from their suppliers for products sold in their stores and through Ocado Retail.

The end result is that they are gaining market share at the expense of Waitrose.

We could, I think see M&S make a move to buy the other 50% of Ocado Retail, this would I think be very good news for Ocado and significantly push up the SP.

The initial market response looks positive - it will be interesting to see if the SP holds 800p today.

Christmas 2023, the big test for Ocado Retail , will define the companies full potential.

The negatives are macro related - outside the companies control - and will reverse as the economy continues to improve.

Ocado Retail is now well placed to exploit the market, especially with the efficiencies gained by opening Luton CFC.

Onwards and upwards.