is... a buy and hold investor of dividend US and Canadian stocks
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I am surprised that point is not obvious. Has it not struck you that all of this talk about processors and productivity, throughput, feedstock, etc, is a bit of a waste of time? It really does not matter what Processor #3 does. Production would have to increase tenfold in order to offset the massive SG&A expenses.
Do investors simply look at the SG&A and accept it without question? Don't you think that is a bit narrow minded? Do you assume it is not a controllable cost? just askin'.
Have you looked at similar companies to see what their SG&A is? Go to investing,businessweek.com and take a quick look. Look at a refiner, which is closest to what JBI is. You will see that SG&A varies from 2 to 10% of Sales. Max.
JBI's SG&A costs are completely unexplained and way out of line. Investors should be up in arms about it, demanding an explanation. I did not see it in the financials... took a look. All it says is See Note 2. Looked at Note 2. Nada.
Have you ever been in a company that went through a downsizing?
First thing that happens (as happened at the industrial gases company I worked at in 2008 when everything crashed) is that all of the receptionists and secretaries get let go. That, and Customer Service people. That is the "A". A = Administrative. Response time is a bit slower in Customer Service, there is no smiling face in the morning and maybe no one answering the phone personally, but no real impact on Production or Operations.
Then, professionals start getting let go in all areas The second round were various people, mostly weak players (varying levels of incompetence), but what you might call "good cuts". A stronger team resulted... lean and mean....
The third round was painful. All good people. Really hurt.
Point is, SG&A was gone in the first round. First thing you cut. what is JBI doing with SGA that is about 1000% of Sales?? Get rid of it. Fire 'em all. If the financials are accurate... JBI would be profitable tomorrow.
S = Salesman. The Sales force and all support staff for sales. That is really a strategic decision. Software companies rely on Salesman. Manufacturing companies don't for the most part.
G = general. everything not related to product. Xmas parties? Nada. Stationary. I have seen both of those cut.
How big is the SG&A for JBI? Should it be 2.7 Million a quarter?
What is wrong with this picture?
I think perhaps that some product cost is being misreported in SG&A to make the machines look profitable.
How big are the SGA components for JBI? Not very big. They do not have a large sales force. A few secretaries... Not much G.
Have I made my points?
'Bout time someone mentioned the SG&A.[B]
What about the 2.7 Million in SG&A???
Does anybody want to talk about the SG&A?? 2.7 Million last quarter. Does any investor see something wrong with that? Wonder where it is going?
Ever look at a similar business like a refiner and take a look at their SG&A? It is anywhere from 2 to 5%. Look on investing.businessweek.com.
All of this talk about processors doe snot matter. They won't make money anyway even if they increase production tenfold.
Do you think perhaps that there is Product cost buried in the SG&A to make things look more profitable than they actually are??
Why don't you ask IR about the SG&A and what is being done to reduce it? You post that you talk to them a lot. Last quarter they spent 2.7 Million in this area.
Really it does not matter whether they use Processor #3, processor #2, or whatever. Increases in production will not matter at all. They need to reduce the SG&A.
Sales would have to increase tenfold in order for this company to have a snowball's chance of success. That is why the stock price tanked today.
So if you talk to IR on a regular basis, you would be doing them all a favor if you simply asked what is up with the SG&A.
If you take a look at similar companies (refiners, etc) SG&A varies from 2 to 5%. Take a look. One would almost think that product costs are being buried in the SG&A to mislead investors and give a false impression of machine profitability.
mm, I didn't read that.... Obviously the business cannot continue in it's present form. I would guess that a major shakeup and downsizing is next. If they are going to try to make machine sales, then the "flagship" P3 machine becomes nothing more than a showpiece. Costs would go down with the reduced workforce. It could become nothing but a skeleton crew.
If I were an investor I wold be upset about the massive SG&A. There is not much explanation of it, from what I can see. It is less than before, but still overwhelming. The specific results from P3 don't really matter.
They are basically running on fumes as we speak. They are not paying their A/P. That, plus their accrued expenses would eat up any cash they had. If they had to liquidate tomorrow, they would have to sell the P&E just to pay their bills. Basically, they are almost insolvent.
I would not touch a PIPE at all. You would not be able to get access to your shares before the company went bankrupt.
I don't agree that they are not near R/S territory... add another 1.5 months of cash burn to those numbers and you have where they are now.
You are correct... P1, P2, and P3 are all different. Which means that the initial promises made on P1 were false promises. P1 basically did not work. The picture that was presented to investors and discussed on tis board of something that was to be profitable within weeks was not to be.
And yes things just work. That is what professional engineering is all about. They are responsible for things like safety, and for that to happen, things need to just work. They do calculations... simulations, all so that things work. No screwing around...
If that were true, then P1 and P2 simply were not what they were purported to be, magic catalyst or not. They were supposed to be economically viable. Maybe this could happen with 1 processor, but the third? You wait, P4 and P5 will require the same thing. Of course, they will be out of money by that time...
Proof of concept was the Islechem study. The rest is just good professional engineering work. There may be a few new components, but Startup should be a relatively painless 2 weeks.
It is called "startup".Two weeks. Simple. They should have finished prototyping and experimenting about 2 processors and $50 Million ago. They should not need to figure it out anyway, what with the magic catalyst. Btw, I do not recall seeing it in the report. Did they mention it?
What about a Reverse Split? That is how management usually solves their problems in these situations.. Existing shareholders get screwed!
Well, that is OK then. That's different.
Excellent post!!!!
I think you need to reconsider your investing strategy in JBI. They will not get money forever. 55 million and counting is more than enough.
Companies worth investing in don't require money to keep going. They make it.
3 Million is a little more than a quarter of losses. So, as an investor he is accepting a short-term loss in the hope of a long-term gain, or maybe blending it into his business. Btw, I bet he announces the sale of the blending site soon. I should pay it another visit to see if there is any activity. I remember seeing a car on the lot. I think they would make more money as a winter storage facility. And maybe I will stop in for a burger or 'dog on the barbeque.
You can't term it an "investment" when the funds are keeping the company afloat. They are spending money at the rate of maybe 800k per month. A little less than before Heddle, but not by much. There should be plans in the CC about future funding.
Yes, Straw is more or less correct. I am not an accountant, but an asset ie worth the lesser of it's cost or market value. Unless P2O can be shown to be profitable, the processors are worth peanuta. Anytime equipent is customized for an industrial application, it is only of vale for the purpose it was designed for in the system it was a part of. Othwise, it is basically scrap. The only value above scrap value for Proc #3 is if someone wanted to coNtinue testing. They would understand it is a money-losing proposition, so the value is minimal.
So I take it that you expect the coming financial report on Nov 12 to be quite poor then, eh? Not Cash Flow Positive?
What do you expect the company's source of funds to be over the several years between now and when they start making money? Just curious... the Heddle money must have run out.
Thanks.
Enlighten me... and I am not a lvl 2 trader...
how does anybody maintain Control by being best on the Bid and Ask?
If I want shares I beat the Bid... or go somewhere in between... and that moves the bid up.
If the MM snaps up my new Bid to maintain Control, that would imply that they take all the shares at that price, and hence the Bid remains where it was (at the lower price, before I put my bid in).
So they have Control, but they just lost money. The same argument can be nmade at the other end of the spread.
Last time I looked, most MMs were doing OK.
This is not even a complicated arbitrage argument, it is just common sense.
does that mean that it will not make money for decades? That is the sense of what you are saying.
and what is your definition of "proof of concept" exactly. I thought they had that years ago.
"speaking strictly for myself .. i can't afford to bid sit every day
hence my strategically placed bids based on what i see *done* and
when able to buy .. as i've always noted .. it's my CB (cost basis)
that i focus on hence my propensity for DCA'ing JBII shares
my OCD focuses on tax lots and when they roll over :)
"
Speaking of which, do you ever do strategically placed sells? It would bring down your Average Cost. Like selling those few times it has popped up into the .40's.
No, let's just say that sometime there is no clear proof to a point, it is really a matter of opinion. Whether or not JBI's use of PIPE offerings constitutes toxic financing does not rely on their use of the Binomial Pricing model in doing so...
Personally, I think that if JBI put a statement like that in their financial statements, it must have been a joke.
The binomial pricing model and Black Scholes formula are theoretical constructs that I doubt are practised anywhere outside of Bay Street (that is the equivalent of your Wall Street).
I think the only people who would use them are ones that program large computers that provide an answer that is all based on theory, but has little to do with day-to-day practise.
It is like trying to teach a chess computer Qp => Qp4. Or is it Kp => Kp 4? I would have to get my board out. Point is, the human mind can see the logic of that move without doing millions of calculations.
I find it hard to believe that a company like JBI used an advanced model like that to figure out the proper price for a PIPE offering. And I doubt that an accountant would know or care.
But, the 'Bake does have his facts straight, or so it would appear.
One thing I question is the assumptions listed. I had a quick look at the binomial pricing model. The assumptions listed do not cut it. Do not fit the model.
Regardless, it neither proves or disproves what 'Bake is saying.
I bought some today. On the TSX though. Not the OTC. No need to go to the OTC. I actually did not realize there was a security outside of the OTC until I did a symbol search.
Well I have a numbers-driven method of finding stocks. Normally, I get nothing on the OTC. I relaxed the filter a bit and 4 came up. Of these, this one seems like the only one that is buyable. You are correct, it pays a good dividend, and seems to have fallen on hard times due to the drop in the price of gold, like all of the other metals mining companies. Well, that is a good reason to buy... when everyone else is afraid.
Hey.. this came up on my search on the OTC for some decent stocks... question: what happened the last couple quarters?? Something...
Hello everyone. I got into some mining stocks this summer. Noticed the correlation with the fall in the price of metals. Just took a look at the OTC and found this.
Seems like it is out of the ordinary for the OTC. Pays a good dividend, and making money with a decent PE. Any help/ assistance welcome.
Hi. Can i get some definition of what this statement means??
"SOS DD done by those who can manipulate OTC stox with impunity "
Thanks.
Well....
I have not seen the Fox News piece. The fact that JBI got their name in the news does not make an iota of difference to me. They probably paid for it.
I think that the Crayola thing is a joke. I can't imagine Crayola proding enough feedstock, and I ad not head that shipping was paid for until you mentioned it.
Most of the large busines partners, like RKT, etc, have nto come through with anything, so for the most part they are just meaningless.
I don't believe that the DEC pushed through the permits quickly. If I remember correctly, JBI was very late with their applications.
As or the ramping up of revenue and lowering of COGS, they ahve such a long way to go I can't imagine they would ever get ahead of the game. The question of basic profitability remains unanswered.
Any other questions? Good luck with it.
I find the information put out by the company to be generally erroneous and misleading, so I stopped reading a long time ago. Most of it is put out via channels where the company cannot be held accountable (the SAIC report jumping to mind as a good example). The only real information that the company can be held accountable for is in financial statements, which are overwhelmingly negative.
Link or.... um... LINK?
I call Bullshit!!! Link???????????????
Oh Jeez, thanks for cluing me in.
The reason why the evidence is ignored is because it is flimsy. That is like saying JBI can make fuel for 10$/barrel and 1000% profit margins, then losing $50 million dollars.
There is no hard evidence that JBI is selling to US Steel.
Link? or you know what...
Just looking at it, it looks not half bad. Don't kid yourself, Wall Street would construct something much more complicated, but for someone trying to justify investing in a stock it is not half bad.
Looks like you are mixing several Lines of Business though. Selling Machines vs running machines. I would do each on separate abs, then have a Summary tab which combines the business results from each. Your cost numbers look not half bad. I can't tell how your calcs work, because of my previously-asked question on the use of labels. I can kind of tell what cells they are, but that is about it. In what I am looking at, it looks like you are just doing calcs on fuel sales. Try splitting out the different lines of business on different tabs.
Another thing, you are mixing up building processors vs running them. That is a huge distinction that should be made. In practise, capital equipment like these processors gets built by dedicated groups. When they are complete and running they get handed off to Operations. At that point the invested cost goes on the books as P&E.
So, the first question is, can they make money from their existing fleet of processors (that is one tab in your spreadsheet). The business case to build further processors is another tab. I contend that processor #3 is not yet a stable commercial design. If that were the case they would not be waiting for clues on it's performance to build #4 and 5. It is were stable, they could document and build hundreds of them confidently without waiting to see how #3 worked out.
So, I don't think that JBI is ready for that tab which answers the question.. "can JBI build processors that get a superior ROI to the cost of capital borrowed to build them". That is the essential question to be asked. But, if you wanted to attempt that, you could move those calcs onto that tab and try to answer that question. While you are at it... where would they get the money to build them? Unless you know that... there is no start point. From previous posts, we know that they have perhaps 2 Million invested in parts waiting for final design input, based on the performance of #3. That means that the processor cost for 4 and 5 will end up in the 6-7 Million range. Where do they get that money? To combine the 2 analysis confuses the issue.
Yet a third tab would be the business of selling processors. What is the cost to build... what will they command in the market.. ?
Given where JBI is at, this spreadsheet should focus on the immediate profitability of the existing fleet. But, build out the 3 tabs, then build a Summary tab to combine the results..
Just my observations..
The closest thing to it is that statement from what I think is that paper written by JB, which still does not prove it. Not that it matter much in the whole scheme of things.
Anyway, the link does not work...
LINK... or BULLSHIT!!!
Not bad... at first blush. Looks like you have tried to consider everything. btw, what are:
PROXUPTIME
INPUT
HTFRATIO
ETC.
did you use macros??
also
"If one link doesn't work for you, try the other one!"
sounds like JBI's business planning.. LOLOL
so for example.. "P2OSOWNED" is obviously 3. I can see the field. But, where do you define that label P2OSOWNED??
just trying to understand it...
I would love to have a look at it. Unfortunately, your links do not work.
Link? or Bullshit!!!!
(sorry had to throw it in)
Well maybe she feels she has a valid claim. I don't think that all of the claimants will get paid before JBI goes bankrupt or runs out of cash. I am not sure where these lawsuits sit on the pecking order in the event of liquidation, but it is always best to get these things going earlier. There are lienholders, debtors, shareholders, and shareholders with liquidation privileges. I have no idea where the legal claimants sit on that list.
doesn't mean it is going to make money... not at all.
Jiminy Crickets!!!
Bullshit!!! Link???