until the bankruptcy is declared.
That's the really only unreasonable statement IMO.
As long as they can issue shares to bring in cash they won't go BK. They've demonstrated much more competency at that than at managing costs to fit revenue and cash flow, which was one of the stated goals when Jamison et al came aboard in ... 2007?
Keep in mind the cyclical nature of the headwinds you listed. As the cycle begins to turn, they will produce tailwinds for CPST. With a leaned-down overhead as revenues rise the increased margin should start to flow to the bottom line. Of course, I still think they could do more, especially regarding having too much unused floorspace and using only one shift. I have trouble imagining this sort of product for the markets it addresses would ever become mass-produced and so they should have scaled into larger facilities as needed instead of starting with what they did.
Regardless, the tactical move, IMO, is for CPST to stay in operation and make the best of the situation to be fully prepared for when the headwinds become tailwinds.
When the C-250 is finally ready for roll-out, a nice margin improvement should occur as 4 units produce a C-1000 instead of 5 units. The new less expensive recuperator (austinetic alloy) with less creep and higher temperature tolerance and reduced corrosion and crack formation will help as well.
You might consider doing one of what I've been doing - keep a small core position so if the upside materializes you can get some of what you're down back. For a little more risk, trade small blocks, which is what I've been doing.
I do the former to limit my risk, which took me a long time (for me anyway) to learn was important. I do the latter to both take advantage of what I think I've learned about how the "mechanics" in and of the market operate and to continue learning.
Being able to scarf a steak dinner (or sandwich) makes me feel I'm not totally helpless, which is important to me. Being patient helps as sometimes I have to wait a bit longer to pay for the meal than I anticipated.
And there's always the entertainment value. Seeing the trading and price action Friday and then connecting the dots to the release of the prospectus, 8-K and Cowan gives me plenty of TFH material.
One example is Cowan gets their fees from making the deal and I think they want the market to be attractive for CPST to issue shares. At current prices Cowan can trade a wee bit of their capital to drive price up and CPST will (eventually?) see a price they can't resist - SELL! SELL! SELL!
It also helps Cowan if they want to instead do a private placement of the shares. They likely make money trading the shares they use to move the market too.
Momo traders will appear, if not already here, and help push it up. Saw this very recently with a stock much worse than this one. Through it all will be the normal "waves" that lead traditional TA folks to get all giggly about what a great stock this is and how much they make on it.
I suspect we'll see some behavior like seen in Plug Power recently.
With pps +10.78% (close) and volume +253.03% Friday, folks who don't follow that closely will probably see a long up trend beginning (of course, more than one day is needed) and guess it was a huge positive response to the AGM and voting results. The up-trend assessment is likely correct, due to forces we (I?) can not but guess at, while the causation assessment is more suspect in my mind.
The voting percentages that approved everything weren't "all that", IMO, so I have a hard time accepting the action was all a result of overwhelming enthusiasm to grab the last 15% of stock not already held by retail investors.
All this also dovetails nicely with what I said about the Russell Indexes ejection - CPST would outperform and sell-side folks were likely grabbing shares hand-over-fist knowing how the game would go.
We no longer have a fundamentals-based market, just a sheep-shearing market operated by expert shearers.
Oh well, that's enough fantasizing (or "nightmaring") I guess.
MHO,
Bill
AI
