Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Can you say "no more pipes"?
Companies with offtake agreements are usually able to find outside financing to build their production facilities, allowing them to retain cash for normal operating uses.
Raw, I am slow catching up on posts, but that was CLASSIC and very apropos. The "Straw Man" gets more work than slave labor on this board.
Well BigGreen, we agree on a time frame for expecting more news. As to whether the share price will hold between now and then, I'll leave that forecast to the guys that are watching the trades more closely, but it seems like a month without news results in a drop and I think most of the longs are strapped in looking for buying opportunities till this turns "golden" between now and the middle of next year.
2 & 3?
I would expect that successful processing from either or both would be a material event since it would potentially make the company cash flow positive and since it would represent completion of JBI's stated priority for this year. One would hope the announcement would be accompanied by information about additional fuel sale agreements. I would assume if we haven't seen a PR, they aren't working yet... but soon. One or both this month? Certainly completion in time to generate substantial revenue in the first quarter of next year, hopefully their first profitable quarter.
You might be insanely wrong at your $500,000 estimate. This is just the first answer from a google search and I am sure there are more recent studies out there, but I write Employment Practices Liability Insurance and can assure you your figures are totally wrong:
"In a study that followed 470 wrongful termination cases in California civil court between 1987 and 1994, James Dertouzos, a senior economist at Rand, a public policy research firm based in Santa Monica, Calif., found that 17 percent of the cases were dropped after an initial complaint, costing the employer less than $ 500 on average. An additional 40 percent of the cases were settled before going to trial, at an average cost for the companies of $ 60,000, including attorney's fees. (In the case of a small business, losing $ 60,000 could threaten its entire existence, but relatively few small businesses get sued.) Attorneys handling federal discrimination cases report similar findings. William Ewing, a Philadelphia employment litigation lawyer, says the cost of handling administrative work and fact finding for a client company after a complaint is filed with the EEOC is usually less than $ 5,000. And most such charges, he says, are resolved before they are filed in court."
http://www.manhattan-institute.org/html/_us_news-suppose.htm
Zardiw, great job on that post - really good overview.
And we already know the premelt has been tested. The quote a few days ago that someone posted from RKT said raggertail had been tested at NF. The old process required ground plastic and I don't believe would handle the raggertail. That necessarily means they had the premelt operational for at least that test.
I believe I recall a post that said John mentioned at the ASM an intent to file late because it is more expensive to pay the accountants to file on time when the deadline comes at a premium. He intended to save the difference in accounting costs - a prudent decision IMO when the company is operating at a loss. I believe late filing has nothing to do with whether it is "bad news" or a poor focus on accounting. He told us in advance what to expect as a routine so the follow-through isn't newsworthy as an omen of bad tidings. It just is what is.
And has anyone else mentioned that the RKT gentleman's statement that raggertail had already been processed in a test also necessarily means that the premelt system is working??? To me that is huge. I don't recall confirmation that the premelt is actually functional (though hope that would be part of next week's announcements).
Steve, great post. I totally agree with the analysis. The same view even caused me to trade some of my shares in an attempt to reset the cost basis. Honestly though, with the stock so thinly traded and volatile with any of the announcements you mentioned potentially causing a substantial new floor, I just didn't have the stomach for it. I bought back in with those dollars and am trying to be patient.
Thanks for the correction. I was only aware of a public statement that was non-specific, not statements that communicated the possibility of doing that kind of volume in 2 years. Good stuff. I'd love to see them execute 200 units in 2 years. I might (purely subjectively) be a skeptic that they will accomplish it that fast, but as has been clearly stated in the pasts I am generally optimistic (in the extreme) about the future value of JBII.
My point is that they would target/slow JBI - not that they would target RKT and that any delay in securing permits would harm JBI shareholders so it wouldn't make sense to release the location via releasing the supplement. You can not prove there is no supplement in JBI's file any more than I can prove there is. That information has not been made public.
On your issue of the RKT "CFO", loneranger was kind enough (thanks) to give your (likely) reference. The quote "As stated in information publically disseminated by JBI, Inc., RockTenn did enter into a long-term arrangement with JBI to covert RockTenn’s plastic waste into fuel. Given the size of RockTenn, this agreement is not of a material nature for us to issue any public announcement regarding our business arrangements with JBI, Inc." directly answers your question about why it was not "material". It is for the same reason that the supplement is not an event requiring JBI to release a PR on the supplement. It's the same point I was making in the first place. In scope, neither of the events were big enough to require the respective parties to PR the events (JBI for the supplement and RKT for the entire agreement).
loneranger, you may disagree with me as well and think having no PR about the supplement is a big deal, but thanks for jumping in with the quote to review.
You guys have a good weekend. I will be off-line for a few days.
Re-reading my post, it was poorly worded on that point. Thanks for the clarification. There of course was no limit, only an estimate.
Again, the supplemental agreement is in the company file where it belongs - not on the web where enemies of JBI's success will cause delays.
I haven't a clue how many more than 200 processors over 10 years the deal may warrant, we only have a public estimate of up to 200.
Super excited RKT is responding relative to the current revenue from the transaction. Positive forward thinking statements on a forum tied to their recycling interest.
Their CFO saying "JBI is not material to us" is one I haven't seen. Please provide a link if you don't mind, but with a company that large where dealing with their trash is not their main business, I don't find it discouraging that one of the highest officers of a very large company would be largely unfamiliar with a side-interest agreement. Their job is making boxes.
There are great answers to all of our questions, we just don't know what all those answers are and in this case, I think the most plausible guess does not raise even the slightest concern. In my opinion, the more valid questions where the answers may be disappointing relate to how fast they can execute their business plan of building and placing the processors that are already on order and whether the company has the expertise to manage further massive growth. I'm putting money on a favorable answer, because even slower than desired execution will result in a huge, obscene ROI. The supplemental agreement in perspective is a non-issue.
Was a master agreement for up to 200 processors material and not detrimental to announce? Ya think?
A first supplement to the massive agreement naming only the first location when it has already been announced there will be many processors at multiple sites material? Naaaa. Detrimental if it means possible opposition in permitting? Yes. Should JBI act in the interest of their stockholders by not advertising that location? Yes, and why would RKT be "super excited about it" as evidenced by their facebook posts if a site hasn't been agreed? Why would they even enter into the agreement with JBI if they had no intention of selecting a first location? Why would JBI put equipment on order if there was no place to put it? Your assumption that there wasn't a first location agreed from the start if it can't be proved seems far less plausible.
It is interesting to me how we can see the same facts and find logic to draw the opposite conclusion, but there it is.
Kezzek, I think you misunderstand the point. I maintain that there is a site in preparation mode. The order for fabrication of the processors is public information as is the contract revealing the intent to complete them, therefore no further PR is required and it would in fact be detrimental to announce it. It is not material to the stock value where the site is and there are great reasons not to announce the location so there is NOTHING strange about not announcing it. Complaints about no supplemental agreement are empty if no announcement is necessary and if doing so would be destructive.
Who cares about the "supplemental agreement". I don't think RKT would sign on the deal without selecting the first site at inception. They have already made public an agreement that could warrant up to 200 processors. The actual selection of the first site location isn't really material IMO because the big agreement has already been announced, much like progress reports on the stage of construction of incomplete processors is not material. Would we like to know? Sure, but would it make sense for the company to announce it and face unnecessary opposition in permitting? That would be bad for JBI and their investors - thus not announced! The whole "supplemental agreement" concern is simply noise. It's simply information that will come out in good time.
Thanks Commando
Commando, when you drive by the facility, can you see any progress like increase in building size, etc?
Pepper, I think we know that they've sold some fuel. Other than that, I agree with what you are saying about things that are confirmed. I'm still optomistic about JBII's "blow the f up" at some point, but agree that seeing revenue is what means seeing gold. Other than that, longs (me included) are trading on hope and projections based on the tested pilot machine and contract in hand. Afterall, although a very promising investment, we can't really call this a value stock... yet.
I couldn't get him (her) to say that. I didn't get a response from him (her) at all - private or otherwise. In my book, a cryptic message that the sender won't even confirm doesn't quite sound like Due Diligence. Not trying to be critical. I appreciate your posts and information ...just saying on that point...
not quite the rocket burners some of the skeptics were talking about, huh.
Agreed, but I hate for "hints" to fall under the heading "summary DD".
Zardiw, I couldn't get that poster (tk11) to confirm if his cryptic message was hopeful thinking or confirmation. In spite if IW's classically melodious inquiries, I don't think we have anything about the tour on the board that looks solid.
tk11, please clarify. are you saying you got info from someone on the tour and 2 & 3 are confirmed ready to go?
I couldn't agree more. Does JBII really want a PR about the RockTenn site "supplimental agreement" when it could invite permit problems? Does he really want to be releasing PR's that may not be "material" when the SEC is checking everything with a microscope? I hate not knowing, but appreciate his caution. Your timelines for frustration are perfect. In the meantime, it is a buy opportunity that won't last (probably past late Nov when the filing extension for the 3rd quarter ends as I believe JB will save CPA expense by filing late).
Zardiw, on the optomistic side I think you will be low, even on the $10.
Look at this post:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=68088240
Then just assume 20 processors by the end of 2012. That is $100,000,000 in Net Rev.
Try a conservative multiple of $25 and divide that against 68,000,000 shares and you are already north of $35 per share.
Once we have a few quarters of multiple processor revenue to calculate profitability, I think the market will give JBI a lot more credit for projections. We will know how long it takes to set up a RKT location and we will have NF revenue to project the value.
As a "keeping it real" comment, I also think we may not see much news till mid-late Nov and the stock might drop again before then for want of credible information. JMHO
ditto that... we grow up speaking to humans, not a little glass lens. I can't think how many takes it took when I did a business video.
Yep, that's the way I see it. Now admittedly, Waste Management casts a big shadow because of their "supply side" control and because of the number of locations they would have for a processor, but... who needs them? JBI has proven with only one big contract (and how many more are out there?) that in 5 years it is possible for JBI to generate more net revenue than the "big" trash guy. Now extend the credibility that WM has because of their size to JBI and think of the following 5 years in market influence and shareholder value! OOPS, I think I just soiled my shorts!
Just doing a "back of the napkin" calculation isn't it plausable for JBI to match WM's $1 billion from the RKT deal alone?
Bought first shares almost a year ago, but have been quiet on the board. Thanks for the welcome, Zardiw - and for your DD posts. I think we are going to be in this for a long time.
Insane? I am good with insane. I am just guessing few weeks faster on 2 & 3 and perhaps about the same on RKT but it's just speculation. I'll be patient past those dates. Insane will still happen. Thanks for the reply.
Raw, You've been following this much longer and in greater detail than I and I am no less optomistic about where things are going. I am just a little more sceptical about the amount of information JB seems to be releasing. At present, he does't seem to want to release any information he isn't legally required to release. your point about 2 more machines making JBI profitable may well make that definition of material information. I am also guessing that if we are able to get information about next week's tour, #2 won't be running yet and we could see another buying opportunity in the shadow of the disappointment. I don't buy the premise that JB wouldn't allow a tour unless he had the new machines running and place some credence to the poster a few weeks ago who said he's been in the fabrication business for 30 years and would consider a 4 month turn on making a machine amazingly quick. Add to that the testing that may have gone into getting the premelt going? Well, getting them online next month would be really great, but production of a disruptive technology gizmo that can generate cash like the Fed? It may not happen as quickly as I'd like and I am prepared to be patient.
Counterpoint? IMO i am thinking #2 & #3 show obvious progress at dinner tour next week - stuff there to see, but neither finished. My hope is for at least one (if not both) of them running before December so we can see a month of production in the year end financial data. I also question whether flipping the switch on a machine that has already been anounced must be considered a material event. Inquiring minds want to know (me included), but I don't think JB is negligent if he doesn't PR that information since it is already public knowledge. I'd love to be hearing PR's about new fuel sale contracts, status of construction, the much vaunted RKT "supplemental agreement", and other things that they are apparently working on, but JB seems to be very cautious about releasing information at this time - perhaps due to the Wells notice. JMHO With the massive potential I am prepared to be patient like many other longs.
grantg2, thanks for your PM (and the one from underdog). Please excuse no PM reply as I havent upgraded so can't PM (yea I know, cheap newbie). By the way, I am JBII long (at least till we get year end financials)and increased shares after the last AGM. I didn't go, but know someone who did and who also had the opportunity to tour the facility at that time. Apparently watching the conveyor load with plastic and see it gurgle out fuel at the other end made quite an impression. It would sure be great to hear from someone how the premelt is doing and the status of other construction at NF. I hope someone will be able to offer some input after next week's tour, but it looked like the shareholders that signed up got dumped for not being members. I am still comfortable thinking that we won't be able to get any real news till mid Nov and may not really get a revenue and profitability picture till Feb.
4kids, thanks so much for taking so much time to coach a new kid (and Paula for your reply on the JBI board.) Fascinating. I will watch your posts with interest and try and keep learning. I was expecting a run on JBII before the 4.00, but not with specifics and was suprised about the decline going so low. Likewise, this last little run didn't seem to be based on any credible info and I don't think much info will be available till mid Nov financials. My bet is that JB is going to be cautious about releasing information and that it wouldn't be prudent for him to release a RKT location that could invite resistance on permits that might slow them down. That means, purely based on credible info, (not trading data) I assume anything that happens between now and new info will be unstable/may not hold and even substantial revenue growth revealed in nov will be met with scepticism.
Regarding your forecast of events to uplist, I agree, but was thinking the Wells notice could also hold them back and would be slow (but not large) to resolve. You don't think that is a likely event to hold back uplisting?
Like many, I assume explosive growth will not really hit until/uless the year end financials show solid revenue proving consistent production for a month on more than the "pilot production" machine... then buying at $4 will be considered the good old days and your uplisting scenario will put some investors in "high cotton".
Thanks again
4kids,
So which figure were you discussing that when moving to 90% can potentially reveal some shorts covering?
4kids or Paula,
Mind offering just a little more analysis to a neophite? What was the observation on your data post. Which figure relates to shorts? Was the percentage there and was it near 90%? Are you running the percentage of trades at the ask to define the shorts looking for shares?
Sorry, I am uninformed, but want to learn if you don't mind.
Here's hoping you can get a read on the premelt, #2 and #3. Please post some comments...
Also just thinking about material events...
Would JB have to disclose an addendum to a well disclosed master agreement?
Would JB have to disclose the status of construction of additional units in NF that have already been announced?
Would JB have to disclose the status of construction of the first RockTenn location before completion?
Many here (I am not presuming you) would say Yes. I would maintain that caution about disclosures, while uncomfortable to the shareholders, is necessary. IMO, as an example, JB wouldn't want to disclose a location which could result in interference in securing permits to operate. Likewise, with the SEC watching closely, they also wouldn't want to take measures which could be perceived by SEC to be pumping the stock.
Personally, I hate the silence but appreciate the caution. It seems prudent. Financial results will tell the story well enough for longs and shorts alike.