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I was a little underwhelmed by Upside Foods announcement. This was billed as "Big Big". The facility can do 50,000 lbs per year (22,700kg) with possibility of scaling up to 400,000 lbs per year (181,400kg). I've just checked the chicken in my fridge and it's 1.3kg so they could do about 140,000 chickens per year. Americans eat 25 million chickens per day (9 billion per year). And that took something like $0.25 Billion of investment. Underwhelming, but hey ho.

Oogleflugal - I think I am missing something. Doesn't the cash raise account for the overwhelming majority of the NAV rise?

I see Upside Foods have posted the following on their LinkedIn Feed:

The next big thing in cultivated meat is coming. And we mean BIG big. 11.04.21.

Go on.....what's your best guess?

I've queried this previously because I am not completely clear on how much Jim Mellon gets to syphon off. Jim has an agreement that he gets paid 15% of any increase in NAV. This was agreed a couple of weeks before the fundraise was announced which automatically increases the NAV by that cash amount. What I'm not clear on is whether Jim gets to pocket 15% of that £62M, so £9.3M in which case we don't have £45M left to spend, it's just under £36M? In fact, with the hefty increase in NAV of the original holdings also announced in the few weeks following his daylight robbery - sorry, did I express that in writing - does that mean there's actually a chunk less than £36M less to spend as we need to set aside even more to cover his expenses? I may be being harsh here as I freely admit that I haven't fully studied the terms of the agreement he has - I'm being lazy and hoping someone has done the hard work for me.

I'm in 2 minds about this one. I'm all for saving the planet, but the vast majority of cocoa is produced by poor farmers in poor countries in West Africa (Ivory Coast, Ghana, Nigeria and Cameroon are amongst the top 10 exporters). Now I'm not saying that the existing producers are ethical beacons for the world, but I am not sure that I would be targeting the removal of a source of income from the very poor and transferring it to the very rich in the US and UK.......

Don't you need to do things like feed the gooey mixture some nutrients. Don't you need to buy stuff to build an R&D facility or factory.....The process is also temperature controlled so I think you need oodles of energy. It's not just one cell.

What makes you assume that clean meat is not facing the same supply chain and inflationary pressures?

i couldn't quite tell from the article but i'm assuming the combustion products of any organic material would release some levels of CO2 so when there are alternative carbon free sources available, i don't know why you would not just jump straight to the carbon free source rather than a lower emission middle ground?

i think we will have to agree to disagree about why ANIC should not exclude its 3rd largest shareholder (i.e. part owner) from some of its business activities.

OK, lets address the terms of agreement with Mellon that he gets 15% of rise in NAV. Am i oversimplifying that simply by raising £60m and therefore automatically increasing NAV by said amount that he gets 15% of this? That's £9M and would comfortably put him in the top 10 best paid FTSE 100 CEO category (median for 2020 was £2.69M). ANIC are not a FTSE 100 company. I would freely admit i only skimmed the RNS (then fell off my seat), so I may have this wrong. But then, as a lowly investor through HL, why should I care about the company partly own

Oogleflugal - My point about Hargreaves Lansdown customers being excluded is more one of principle to address the original assertion that this is a well run company. Pi's using the HL platform make up 7.5% of ANIC shareholding and as a matter of principle should not be excluded from the business activities of a company we part own.

Re. your other points, some may be valid, some not. You chose to ignore 3 out of the 1st 4 points I made which are my biggest concerns with regard to how well run this company is.

My main point though is a handful of positive RNS stories does not make a good company.

I'm happy to stick with it as it is the only, or one of the few, shows in town but I am concerned at some point down the line we will be well and truly shafted as the track record points to that being a distinct possibility.

HivedOff - Just 'cos i'm in the mood to spark debate, i would challenge your comments that this is a well run company with its finger on the pulse! Not sure we have much information to draw that conclusion other than a few recent positive RNS's. if you look more long term there are a lot of things to object about.

1 - Botched attempt to take the company private.
2 - Not very convincing commitment to not try the above for at least 3 years (2 years to go.....).
3 - Excluding Hargreaves Lansdown customers (i.e. by far the UK's most popular private investment platform) from participating in the uptake of warrants.
4 - Agreeing to give Jim Mellon 15% cut of any increase in NAV - seems overly generous.
5 - At best, misleading assertions by Mellon that conventional dairy industry will be gone in 10 years.
6 - inability to attract institutional investors at last fundraise, or in any case not attract them enough to do any more than dip their toe in the water (remember, no-one has passed any reportable thresholds since the fundraise).
7- Apparently critical of one of the companies we are invested in (Shiok).
8- Probably lots of other things.....

Just saying.........................

MAZK231 - Thanks for posting. Good to see both sides of the debate as 99% of posts and links on here are simply to unequivocally positive articles which doesn't provide the balance to highlight just how risky this share is. Lots of people on here have said this technology is inevitable. Well, it isn't ! Enormous challenges to overcome and it might not happen at all. But as I keep saying, that's precisely why i am invested because it is so outlandish and speculative that if it did come good (and i do believe there is a sliver of a chance), investment returns could be enormous but it only makes up 1% or so of my portfolio so i can afford to (and half expect to) lose the lot.

I have semi-criticized posters on here for being over-optimistic in the definiteness of their predictions that this will be inevitable and transformative within the next few years. However, i would be equally critical of this report. Trying to make any definitive prediction of technology and markets in 10 years time is a fools game so this somewhat negative report is just as likely to be nonsense. We can't know which side is correct. i think it will all be clearer within the next 5-10 years, but that's miles away from saying that the technology will be commonplace within that timescale. i simply mean we should have a decent chance of knowing if it will gain a foothold e.g. if we have multiple successful IPO's where there is significant institutional investor uptake would be a good pointer. I suspect ii's aren't overly interested right now as there is no company they can take a big enough position in to make a meaningful difference to their overall returns.

wgg58 - you have chosen to be take a pessimistic view on the alternatives to suit a biased view of this share. The DSM product I referenced reduces methane emissions from beef cattle by up to 90% - not 55%. This is on the DSM website. I don't know where you get your figure of 55% or where you get your figure that cow burps make up 1/3 of livestock emissions or exactly what you mean by this (e.g. Bovaer can be used for any ruminant). In any case, even if correct, emissions from beef cattle be reduced by 30%. Overnight. Now. What's not to like? This and similar products will be a serious challenge.

idg69 - you've been selective in your reference to the IPhone and how this can be interpreted to the benefit of ANIC. Firstly, an equally valid interpretation is that it simply demonstrates that todays frontrunners (i.e. the Nokia's of Cell-Ag) may very quickly fall by the wayside. This may include BlueNalu, VitroLabs and Formo. Secondly, your comment about underestimating the speed of technological change misrepresents observations made by Roy Amara. What he actually noted was that we have a tendency to overestimate the short term benefits of technological change but underestimate the long term benefits. I think that is what you are doing here.

idg69 - we've had this back and forth a few times but I think your 5 - 10 year assessment is way out. Clearly you highly value animal welfare which is all very laudable and I don't disagree with it, but the animal welfare issue has been around for decades and from what I see has gained limited traction. It seems far more likely the change to agriculture being banded about now has far more to do with the climate change agenda and there are lots of other developments in the pipeline which may make conventional meat hang on for a lot longer than you think. So DSM are currently developing (in fact I think they have already developed) a product called Bovaer which is an additive for cow feed which reduces methane emissions by up to 30% for dairy cows and 90% for beef cows (i.e. immediate CH4 reduction) - don't ask me why the difference as I'm neither a chemist or a farmer. This looks like an oven ready immediate means of reducing emissions. There will be other similarish threats. If cell-ag doesn't hold the climate change trump card then development may slow down. This is not to dismiss the animal welfare etc. concerns, but this aspect clearly doesn't have the same impact on the public mood as climate change does.

Do you not think that given a couple of prominent frontrunners have chosen to rebrand (Memphis Meats change to Upside Foods and Legendairy to Formo) and remove the words "meat" and "dairy" from their name may actually be a deliberate move to distance themselves from what could become unpopular products? So even if they were barred from using meaty terminology, then possibly big whoop, if this distances themselves from the building negativity surrounding meat?

You could look at the potential IPO value of BlueNalu another way then. So right now Beyond Meat has market cap of about $7 billion. Given how much further they are in their market development with $400 million of revenue last year, do you not think a market cap of about 10% of this right now for BlueNalu "feels" about right given their stage of development? So this gives about $700 million dollars for BlueNalu were they to IPO tomorrow and given ANIC's 5% holding this broadly fits in with the range I previously guesstimated. So once again, I think this shows that sort of valuation is already accounted for in ANIC's price.

Flundra - I think a BlueNalu IPO could be soonish i.e. months not years. I'm sure this was touted about previously. However, as I've stated on here before, I don't think this will be the immediate payout you have in mind. My logic is as follows:

1 - Everyone who cares to look can easily find out that ANIC have about 5% holding in BlueNalu.
2 - If you want to gain pre-IPO exposure to BlueNalu, the easiest way is via buying ANIC.
3 - ANIC have stated their holding is worth about £13.5 Million
4 - Given ANIC trades on a 2 x premium to NAV, clearly the high profile assets are being valued at more than book value.
5 - BlueNalu is probably the highest profile investment, so probably is being assigned more than 2x book value. Could easily be 3 or 4 times (it doesn't really matter for the purposes of what I am trying to show).
6 - So real value currently being assigned to BlueNalu is probably somewhere between £27M to £40M which equates to about 5% of total BlueNalu value.
7 - Investors are therefore currently assigning a value of £0.5 - £0.8 billion to BlueNalu right now.

So investors are currently probably saying that right now BlueNalu are around a billion dollar company with no sales and no product on the market but with lots of potential. That sounds like a believable IPO number and that is already baked into ANIC's share price. Now that number might be plus or minus 50% but in any case it's probably already baked into ANIC's price.

Ha Ha. Take it back - they have just told us via an RNS

I find this all a bit weird. Why do we get an RNS in July to give an update on Shiok raising new funds which ANIC did not participate in, but we get no RNS (so far) about the Formo fundraise which apparently ANIC did participate in? Why would they want to officially tell us where they haven't spent money rather than where they have. I'm sure the management are really competent though.

Grinchyface - Lets not get all high and mighty about where government subsidy goes. So you want it removed from the landed aristocracy to instead fund the like of Jim Mellon (i.e. the same Jim Mellon who has been a major Tory donor, who part-funded Brexit, whose father is "Sir" James Mellon and who is related to the Mellon banking dynasty). This is better because?????? Government subsidy has already (hugely) benefited the renewables industry and if this can jump on the same bandwagon then great. Don't be too quick to do your own country down - we're actually not that bad and on the competency scale i'm not sure that UK leadership is any worse than most of the rest of the developed world. You'd rather have sleepy Joe Biden (did a great job on Afghanistan) or Merkel (did a great job on migrant crisis) or Macron (did a great job on almost anything!)? Relax - we're not that bad. if this technology is good enough it should ultimately stand on its own 2 feet and succeed, and if its not it will fail with or without subsidy. Simples!