The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
Xenon: "Nanoco produces the dots, the raw material. STM make the product they badge as “quantum film”. So I think when they refer to quantum materials they mean the film and not the dots."
I think this is the model we would all like to see - kilos of Nanoco dots being regularly shipped to STM for incorporation in their mass-produced sensors. The description of the second project advertised would be consistent with this:
"Image sensors with a thin film photodetector active layer integrated on 300mm CMOS wafers have already been demonstrated with solution-processed Pb-based Colloidal Quantum Dot (CQD) films. The goal of this thesis subject is to develop a new photodiode architecture based on a heterojunction between silicon and III-V QD materials, working in the SWIR wavelength range from 1 um to 2.5 um. This heterojunction is expected to lead to image sensors with lower noise and better reliability compared to traditional above-integrated-circuit integration for QD-based photodiodes. "
The part about work to date with Pb-based dots is consistent with what we know from elsewhere and the first-generation materials Nanoco appear to have been supplying to STM. The objectives of the project - working to integrate III-V (second-generation) materials into devices would also be consistent with Nanoco-STM agreements that have been announced (although it sounds like a long way from a commercial product).
However, the first project advertised is the one that worries me more:
"This PhD project will employ a stepwise approach to develop InAs and InSb QDs of precisely controlled absorption onset, low size distribution and optimised surface passivation enabling stable performance when integrated into imagers working at elevated temperatures up to 150C. In the first stage, the colloidal synthesis of InAs, InSb and In(As,Sb) alloy QDs will be optimized to be able to cover the target wavelength range of 1 – 2 um and obtain narrow size distributions less than 10%. The method that will be employed to impart thermal stability of solid-state QD films for devices will be the use of surface passivation. One method to be explored is by growing one or more shells of appropriate semiconductor material on the core QDs. The second method will be novel ligand development and implementation in solution and/or the solid-state on its own and combined with shell growth. "
So, yes, this addresses integration into films but starting from the point of optimising the synthesis of the (second-generation) dots themselves. Isn't that what Nanoco are supposed to be bringing to this relationship? Now, those are a pretty ambitious set of goals for a single PhD project and we don't know what other resources STM are putting into this, so they could be a long way from production at scale. My concern here is that Nanoco have been supplying dots in small quantities for an initial (and successful) evaluation programme with STM electing to produce dots in-house for commerc
Somewhat concerning. If they are running their own R&D effort in QD material development to the point of recruiting PhD students I wonder whether the high volume orders for Nanoco are really going to materialise if and when ST do ramp up production.
The last three "own shares" RNSs have corresponded to a buy going through at 16:37-16:39. 325000 went through at 16:40 today so, unless they've changed their pattern, I think you could be right. Volumes significantly up today though so maybe they've accelerated the buy-back?
Uncertainty. Yes.
If the tender is under-subscribed it doesn't seem unreasonable to expect the shares to start trading at around 24p. If fully subscribed, there might be an immediate drop to reflect the the new cash value (although who will be selling in volume) but I suspect the real changes in SP are going to happen when it emerges which way the big holders (basically LOAM) have gone. Rightly or wrongly, I think their participation/non-participation in the tender will be interpreted as no-confidence/confidence in future potential and the SP will adjust accordingly. If they have participated (and quite possibly at much more than 38.5% of holding if PIs have been put off by the low tender offer / recent campaign of "good news") the next guess will be whether they are genuinely trying to exit or simply drive the price down to buy back in later.
Unfortunately, I don't think we will find out much tomorrow other than the level of uptake. It isn't clear to me whether major holders are required to issue TR-1 notices in connection with the tender, particularly if their percentage holding doesn't change.
What's happened has happened, but for me this was the most negative aspect of the way the tender was structured - it seemed almost designed to create uncertainty for PIs that can be exploited by large holders.
25th April. Circular, p.16:
https://wp-nanoco-2020.s3.eu-west-2.amazonaws.com/media/2024/03/Circular-final.pdf
Fairly blatant advertorial from QS that doesn't really tell us anything new, but the timing is interesting given NANO interims and GM tomorrow...
https://www.laserfocusworld.com/lasers-sources/article/14310593/quantum-materials-are-revolutionizing-imaging-and-sensing
(This is a fairly widely read trade publication covering optics + photonics with content variable from really quite useful and informative articles to self-promoting filler like this).
TG2D: "Now how about this as a conspiracy theory 'Stitch up 2'...."
Yes, precisely the scenario that leaves me most concerned. It's been acknowledged that the tender terms were worked out in consultation with significant investors so the 24p price must suit their objectives and doesn't suggest that they wanted to encourage large-scale participation in the tender. You don't need to necessarily assume that they have any sort of "inside" access - they may have just decided they want to get out and that 24p is an acceptable price at which to do so given that they can't normally sell at scale on the open market without influencing the price. It would be ironic if it does play out this way and, after the dust settles, we end with a SP similar to that we would have got following a dividend payout.
I guess there is still the remote chance that the tender motion doesn't pass at the GM, but this seems pretty unlikely if the major holders are behind it.
Kooba: "..they could tender their whole holding. Certainly there will have been thought in where the tender is pitched perhaps at a level where many of the pi’s holding are not tempted"
Exactly the scenario that has been worrying me about this situation particularly given that, as you say, the tender offer has been priced at a level that seems to have left a lot of PIs ambivalent, to say the least. LOAM and the other big holders could easily exit completely if take-up among PIs is low. A simple dividend wasn't without downsides but would have been so much more transparent than this.
It's a very difficult one to call. In my view, the post-tender changes to valuation that matter are going to take place once the participation, or not, of the major investors and IIs in the tender is known. If the likes of LOAM hold on to what they've got it'll be seen as a vote of confidence. If they've treated the tender as a rare liquidity event that allows them to substantially reduce their holding the SP could tank. Problem is, I don't think we'll know either way until the dust settles on 25th when payments are made.
It's frustrating that what could have been a simple distribution with fairly predictable consequences (albeit including a drop in share price) via a dividend has become a guessing game for PIs trying to figure out how they might get stiffed.
"I find it hard to envisage they're going to be able to buy £30m worth at 24p. We'll see I guess."
If I let my imagination run riot, I do wonder whether this is a play to force a revaluation of the SP. If they offer 24p and get few or no takers, wouldn't that become the new bottom of the trading range (at least until capital is returned by some other route)? The counter to this is that it would undermine confidence in the BoD because they couldn't get a simple tender offer right!
"In my view a tender a 40p would be far more appealing..."
Agreed - they could still have cancelled 23-27% (depending on whether 10p or 12p per share was returned) of the shares in issue. The current offer leaves anyone who bought into the placing with the choice of realising losses or getting nothing out of the Samsung settlement which, arguably, they played a significant part in by supporting the fund raise at a critical moment.
"What they have done us pitch the tender price way too low where there is little incentive to accept it."
It's almost as if they don't want PIs to participate, isn't it? The major investors, who were consulted, clearly see some benefit for themselves in this approach. It's never particularly helpful to try to second-guess their motives but there aren't many plausible scenarios that leave me particularly optimistic here.
(dammit!)
...sort of sub-10p price we might have ended up at post-dividend or the 17p we seem likely to reach post-tender. If sitting tight and waiting for good news either way, I think I'd rather have just received the 10-12p per share originally suggested.
"The only thing that will lead to a rerating of the EV ii believe is demonstrating meaningful progress in commercialising materials and seeing a build up in recurring and sustainable revenue levels…not mechanisms around returning cash to holders. "
Agreed, this is what most of us seem to be sitting tight, waiting and hoping for. Given the sort of significant (dare I say transformative) rise in SP that would hopefully result, I don't feel it would matter too much whether this starts from the sort of
"And what happened to the once-off payment per share that was mooted last year, then bumped to early this year, and then..? It was supposed to be around 10-12p per share iirc. Please tell me this isn't in place of that!"
Yep. This is it, I'm afraid!