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There is a point in the evolution of an enterprise where the founder/Inventor lacks the expertise or interest to manage the company long term. The entrepreneur has the vision that becomes a plan but implementation is “boring” and details begin to fall by the wayside as “not on the critical path”.
Not saying that we are there yet BUT can anyone tell me the name of the #2 man (or woman) in Li’s world?
Even Warren Buffett has Charlie Munger.
I’m not Joshua but I plan to share some thoughts on the topic anyway...Currently we are playing by “penny stock rules” meaning there are no rules...the price pops on rumors, stagnates on lack of information, falls on a whisper etc. As the company matures (hopefully), the criteria for stock valuation will transition to the more conventional measures like revenue, profitability, growth and stuff like that....our problem....Or maybe our situation is..
Our situation is that we are a royalty company and our royalty is 6% of sales. Many companies would love to be a 6% company. A royalty company has no manufacturing risk, no unions, no supply chains to manage and their cut comes before the profit for the actual manufacturing company ...Because of these features, generally 80-85% of the royalty falls directly to the bottom line. I’m going to digress for a minute.
Anybody remember Robert Schiller, the evangelist from the “Cathedral of Tomorrow” this is his church and he needed $6 million (a long time ago) to build a new cathedral. His thought process went like this...I need one person to give me $6 million or 2 for $3 million or 6,000000 for $1. We are sort of in this situation
$100,000,000 in sales revenues generates $6 million in royalties and that is about 2/3 of a penny per share which perhaps supports a stock price of 10-15 cents using conventional reasoning
Sooo..we need considerably more than $100,000,000 and maybe $500,000,000 or even a billion to support a stock price of $1. Back to Schiller’s problem...how to get the money!
Consumer Electronics is a “chunky” business...lots of pieces parts and all alike...it’s an ideal target but there are legal issues that may or may not have a resolution...this is a big question...if all the other approaches to 5G bomb out, it could really help. Short term manufacturing capacity is a question 90 machines may be an order of magnitude short...
In the automotive area, a couple hundreds thousand door latches a year is nice but at $20/each (a guess) , it’s tough to get to $10 million...I like the tire pressure sensor 4/car at $10 each times 15 million cars is $60 million. Don’t know what happened to the tire pressure sensors. I don’t see volume in trim/logo and it’s non-essential. I don’t see any other obvious short term opportunities here
The medical area is really fragmented and difficult to get multi-million dollar opportunities off the ground. These are smaller opportunities that require long development times for approval and are basically niche products. They are nice but they won’t get us to $500,000,000 of product sales. This really looks like it should be in the US so close-in support and hand holding can be provided. Perhaps this is an opportunity to partner with a broad range supplier (ConMed?) who already has the sales/support staff in place. In Schiller’s world, these are the $50 donations.
To me, it looks like three businesses, each with a different marketing approach...I see CE (if there is one) in China, automotive in the US/Midwest and Medical on one of the coasts.
90 machines sounds like a lot but I have concerns real capacity since long run/lower margin business will crowd out short run opportunities in spite of higher margin percents. From a manufacturing standpoint, they need dual strategies.
Enough for today...I’m sure there are many alternate opinions but the dialog is good.
I recently saw a reference to BMG molds being made from copper or copper alloy. This was surprising since I was expecting it to be something like tool steel. I looked up the melting point of pure copper and it’s a lightly higher than 1900 degrees Fahrenheit ....Liquidmetal alloys are processed at something like 900 degrees so it sounds plausible. Copper is also an excellent conductor of heat, so it facilitates the rapid heating/cooling to decrease cycle time. Copper is much easier to fabricate than tool steel.
This is the first time, I’ve seen copper mentioned....has anyone else seen this?
Original reference from PayMe...193200
Two million shares is only $150k so I doubt that there was serious speculation taking place. If a deal is in the near future, the speculators aren’t close to the action (they get to go to jail)...perhaps a mid to lower level person on the edge, who gave a tip to his brother-in-law. Too small for Bond....Maybe a lower level person at Eutectix or one of Li’s cronies. Or maybe an employee from Eontec???
Why are they scheduling another board meeting on July 1st....only 2 weeks away. This was an unplanned meeting???
Eontec has appreciated 14% since the stock split.
That answer can vary considerably....I’m old so if it is $5 and I’m 80, I should grab the money and run...maybe only 50%. Then again being over 70 1/2 and having the LQMT in a taxable IRA means I have to take 5-6% out each year so the question becomes liquidate the LQMT or the other stuff....hmmm!
This would be a good dilemma to have.
There is a polymer chemistry analog to “short range ordered, long range disordered”. shell created a line of thermoplastic styrene butadiene block polymers (Kratons) that use a similar thought process. One in particular was composed of SBR portions connected by isoprene chains. In this case, the styrene is analogous to the crystalline portion and the isoprene is the amorphous portion. These polymers were very strong and could be melted and even injection molded.
I do remember references 3-4 years ago about developing the ability to control the degree of crystalinity in a BMG and thought at the time...why? The reason could be to try and get the best properties of both structures, but from personal experience, you usually get a good mix of the properties you are trying to eliminate.
By the way, this illustrates why the process technology is far more important than the composition. The process technology is rarely published and almost impossible to replicate
This reference implies “short range ordered, long range disordered” sounds like several of the alloying components are allowed the form a ordered (crystallized) structure which itself is arranged in a disorganized longer range structure (amorphous). This would allow the generation of very unique physical properties that NOTHING in this world can match.
Sort of like the movie “Independence Day” when they have the alien ship and couldn’t begin to comprehend the level of the science involved.
Just don’t understand...the die design and the process know-how is more important. Any competent technical person can create an alloy by understanding the concept of atomic radii and calculating the mix ratios necessary to prevent crystal formation. The alloy composition is necessary but it’s the process that allows you to make a product. Developing the process is where you flush the millions $.
Maybe a heartbeat!
Added 50k at below $0.07.
Did I miss something but their reference is to tantalum based amorphous alloys....I haven’t seen tantalum mentioned as a component....it this a replacement for zirconium or a modifier?... If it’s a modifier, what attributes does it bring to the table? Don’t think it could possibly be less expensive so it must impart some unique characteristic.
Reverse splits....conventional wisdom says they are detrimental to long term stock price since it allows a higher price from which to fall. Soooo I’ve owned Aurora Cannabis (ACB) which just announced a 1/12 reverse split resulting in a new price of about $6...the stock fell for a day or two and took off like a ruptured duck. It’s gone to $18 in the last 3 days.
Since I think a reverse split is somewhere in our future, and I’m not particularly familiar with them the question becomes ....Are they always bad.? Especially if the move is part of a plan to become listed on the NASDAQ.
If LQMT goes to $0.50/share and effects a 1/10 reverse split it removes one hurdle to being listed.
Never met the man...just pointing out the possibilities.
This is a big deal....brings several diverse technologies together pointing to future product direction
Remember that Materion’s original name was Brush Beryllium and when we moved away from beryllium as an alloy component (because it’s toxic) they lost interest. Their main mission was to capitalize on the element beryllium with little interest in deviating.
My native language is English but I’m fluent in French....but I THINK in English and turn the results into French. It slows you down and narrows your answers. Not the same.
A few thoughts....we keep beating up professor Li for his lack of communication but apparently he communicates very well in Chinese. Perhaps he isn’t confident in his English and is concerned with getting “tripped up” in our attorney filled society. How would you feel if you had to meet aggressive shareholders in Portuguese?
Second thought...we get all ga-ga about all these companies in the maze...when an announcement says 20 million yuan, translate it to $3 million which isn’t exactly huge....Ditto with 3000 square meters which is 30,000 square feet or about 3/4 the size of the LF building. Some of these enterprises are very small. Remember LF’s 41,000 square feet isn’t even ONE acre.
Yes the PLA expires in 2021 but there is no rational reason for it not to be extended. LQMT is a presence in NA and provides a toehold into a huge market. To top it off, it costs Eontec/Yihou nothing if there are no NA sales. Why would they want to prove viability of the technology and abdicate any opportunity to capitalize on it?
Five years for a term is much better than the Apple arrangement with one year.
People who “lay their money down” can be classified as investors, gamblers or speculators and personally I prefer being a speculator. Let me speculate a bit on the licensing fee from the 10Q....
We have a very well defined and published revenue sharing agreement with Euctrix which says LQMT gets 6% or 12% licensing fee for any product sales depending upon who initiates the sale...
If we assume that agreement didn’t materialize from thin air, I’ll propose that it was modeled after the less publicized agreement with Eontec/Yihou. If that is the case, the $25k licensing represents our piece of attributable sales in the $200k-$400k range. It could be parts for Tesla or various other small applications destined for North America or Europe.
I look at it as a significant starting point that confirms the existence of a mechanism to compensate LQMT in the future. As the Eontec/Yihou slice gets larger, so will ours...I am encouraged.
Not much activity.....this is the 12th post today and stock volume was 222,000 shares...just over $15,000. How slow can you get!
Forgive my ignorance...what is the part in the right picture under “mold straight and flat”. ???
Looks like transfer pricing from China to LQMT and we will resell it to the final customer or it’s a commission/ royalty/licensing fee. In any case it’s $50k and recognition that funds can/will flow to LQMT. It’s a number that will grow each quarter and I like that.
Bloomberg’s says that Eontec’s net income for Q3-2019 was ¥23.72 million so I would say ¥23 million for the technology license is significant.
I see opportunities in the medical area as well as sporting goods (high end bait casting and fly fishing reels). Basically any application where lots of small parts can be combined into a single BMG moulded part to take advantage of accuracy/finish/light weight/strength etc. These are niche applications consistent with Euctrix capabilities.
Just read the article about GM planning to manufacture ventilators for the current crisis. It mentioned that they would be working with Ventec (Seattle area) to goose their production. Ventec current capacity is 250/month with plans to expand to 2000/mo.within 6 months. They said they purchase components overseas (Germany) and expanding quickly a problem because Germany is ramping up ventilator production themselves. I assume the pieces in question are precision machined parts and as such could be an application for Euctrix/LQMT. These are $50k machines so price is irrelevant. Worth some follow-up whoever is reading this.
When they have to “mark to market” the value of their $11 million in Short/Long Term bonds at the end of Q1, I see an appreciation that could top $1 million....paper profits but will have to be reported....and could be harvested.
The royalty/commission conditions in the Euctrix agreement states that the fees were payable 30 days after the end of the quarter in which they are earned. It means that there will be an additional 90 days before LQMT gets to include it as income in their quarterly report.
I bet our arrangement with Eontec was the framework for the Euctrix agreement. it’s a long pipeline.
With $11 million in credit instruments coupled with steeply falling interest rates (and the accompanying appreciation of the instruments) it s possible that LQMT can achieve profitability without selling anything in Q1. we will get $83k upfront on the rental and only one month rent (March) but that amounts to another $32k. Then again there is the real estate commission to come out of the $83k.
Asset write offs should be behind us. And our tenant will be picking up $7k//month building expenses
Read the 10Q.... they invested a big slug in credit instruments. They just parked it in a different pocket instead of money market accounts.
Remember bond income comes from two sources...the coupon rate and the bond underlying price movement. The interest rates have fallen like a rock in Q1 so there will be very significant upward price movement in the bonds. We can see 10% return in a very short time. The income will be recognized when we “Mark to market” at the end of the quarter.
Wish we had bought more
Rumors on Bloomberg that Tesla is looking for a US site to manufacture the Cybertruck.... just maybe????
If Professor Li wanted to sell out and get $.15, he would have to start at $.40 because 400 million shares isn’t marketable. The first share sells at $.40 and the last share is under $.05.
Works for me!
Works for me!
I’m not sure that a press release would be sufficient and there are concerns about too much info. They can’t Telegraph Eon’s results by acknowledging LQMT’s royalty.
Is there a “blackout period” in China regarding communications?
Would be simpler if they were on the same fiscal calendar.
Question related to earnings.....LQMT is due to report earnings before 3/12/2020 and some of us are expecting at least a mention of potential cash from royalties AND Eontec is scheduled to report earnings on 4/27/2020 (according to Bloomberg). I see a potential conflict whereby the disclosure by LQMT creates a premature release of pertinent information affecting Eontec stock and raising the interest of the Shenzen (?) regulators.
If there are royalties and LQMT chooses to delay reporting, they run afoul of the SEC.
Is there a way to walk this tightrope (a la Walenda)?
Would they be able to award the royalties on 4/27/2020 as part of the Eontec earnings release?
Eontec’s volatility has been through the roof...traded 82 million verses a public float of152 million. Raised a few flags
I can give you a list of ingredients to make a cake and even the quantities of each and I bet you can’t make an acceptable cake. The trade secrets are in the process...in the “how to” which is much more difficult to reverse engineer.