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Getting Hercules loan off is everything imo (next, alignment gained also super key) ... This is huge news for little amda as a result imo ...
Great news all IMO... Just for your info I think this is 100% sound happening before BO for Sonny. The reason is that before the financing, no BO was even possible due to the hercules loan terms. The funds were necessary to make a BO/merger even possible by paying off said loan... as a result in my opinion I am sure it will stand sound (tested or not)...
Thanks SB and all longs here contributing amazingly (even other informative , but not long, posters)....
great post cl...very very well planned indeed. The opposite of "a three dressed up as a nine" and then exaggerated to the nth degree...
I imagine it will be a top case study in how top industry companies, and investors alike, can be so easily striped of their normal common sense... Big company psychology is not much different than individual investor psychology .... over a long period of time you control sentiment and group think to the point where all/most shy away.... and that is when the big move is made ... quickly and under the cover of darkness.
Without amda tech in 4 or 5 years ZB MC could be down to 10 B ....but with amda tech in 4 or 5 years ZB could be 70 B MC ... using this estimate is a 60B difference in market cap comparing with to without...
*assumes company that lands amda tech will gain market share from others due to far superior product
Great dd here guys ... The horizontal merger may have some additional effects, and also more support for this being planned...
1) They can slowly work into the merger informally until they decide to make it formal. This makes sure the suitor is adding value in critical areas as early as possibly.
2) Since the merger is started early and informally, it makes it harder (but not impossible) for a hostile or external bid to interrupt the merger combination.
3) With the terms of the anti M&A clause in the amda loan, this would appear to be a clever work around, of the strict terms allowing essentially the business combination to develop prior to the loan being paid off.
4) Such an arrangement would seem to remove some (or all) of the lenders leverage obtained by holding right to the anti m and a control.
Like CL mentioned "bigger is better" discussing the approval front.... but hugely big is better also in operations. Huge synergies. Transformational. In the past amda has been impeded at every turn in operations. Now you add high end product design, high end sales program to the best material science in ortho and what was impeded in the past becomes a jet stream tail wind .... talk about swing the needle. Also, just as transformational from the Zimmer side.
In general an anti M&A clause is potentially a corrupting feature of a loan. The originator of such a loan finds itself in a position able to decide if, when, where, and how (and to whom benefit will flow) such a loan is modified (such as by early repayment)... If you layer on a crazily low priced underlying security the potential for corrupting forces increases significantly as does who benefits most by a low share price...
College tuition due now .... a piece of the bashing puzzle...
In the June 8 news amda 3 times mentioned R&D (shown below) and I like that they mention R&D "group"...The fact they are indicating this, and pursuing R&D partnerships and external funding, would seem to give more support to Boston's contention that the line item $2.5 million in R&D on ZB statement could have been paid to AMDA IMO...
Here are the three mentions of R&D:
"Since the beginning of 2017, Amedica's R&D group has published 10 peer-reviewed journal articles and 7 scientific proceedings on various aspects of silicon nitride. 7 additional manuscripts are in preparation or are at various stages of submission and peer review."
"The company entered a multi-year agreement with Texas A&M University's School of Dentistry to evaluate silicon nitride in maxillofacial surgery, where osteogenic and antimicrobial properties are highly desirable. This partnership is expected to yield funding from the U.S. National Institute of Health (NIH) and the Small Business Innovative Research (SBIR) programs to continue support for Amedica's R&D efforts."
"Going forward, we are focused on growing spine sales, first and foremost, while pursuing a robust R&D program with academic and industry leaders, to assure leadership in medical ceramic technology," said Dr. Bal, Chairman and CEO of Amedica. "
this is a list of products amda ceramics could be used to manufacture, that is the relevance.
Medical Devices and Equipment in medical field , excluding orthopedics, Ceramatec is offering products:
Assembled Sensors and Transducers
Catalyst Carriers
Dental Ceramics
Dipping Formers
Dipping Formers for Gloves
Distance Sensors
Electro Ceramics
Endoscopy
Flow Rate Measurement
Glass-ceramic PERLUCOR
Grinding Media (Balls, Beads, Lining Bricks)
Inhalers
Laboratory Ceramics (Porcelain)
Level Sensors (Immersed Transducers)
Level Sensors (Propagation Time)
Linings
Lithotripters
Material Testing (Non-destructive)
Medical Atomizers
Medical Sensors
Passive Piezo Sensors
PERLUCOR
Piezo-ceramics
Plaque Removal
Power Transducers, Piezo-ceramic
Pressure Sensors
Sensor Components
Sensor Components, Piezo-ceramic
Sensors and Transducers
Setter Plates
Sintering Trays
Sonar Transducers (Sonar Systems)
SONOX®
Sound Pick-ups
Transducers and Sensors
Transparent Ceramics
Ultrasonic Air Transducers
Ultrasonic Cleaning
Ultrasonic Sensors
Ultrasonic Transducers
Valves, Components for
Zirconium Oxide in Dental Applications
Arbitrage BO websites should be made aware of amda... there is a lot of money that focuses on BOs... even Buffet invests up to 10% of his capital on arbitraging BO's...
Yes... it looks reasonable... As long as they do not drop the ball on valuation?
"1.like in japan & others ...they can ask diff. entities to use the donations disguises instead of loan. "
Ceramatec from Germany may be able to stick handle around some of the restrictive M&A provisions.
Quantification of BO probability is an interesting concept. If you could make a specialized BO screening software tool it would be potentially valuable... Thanks Bos....
Good questions MBD...
Nontypical things happen to nontypical companies...
IMO the last two year take down of amda share price presents circumstances that are highly unusual (non-typical). There was a combination of "crazy" equity financings in 14/15 (a high school student could have done far better for amda), and the dreaded (and extremely damaging) financing with Hercules with the "crazy" restrictive M&A terms. Layer on a a huge established industry scared to death of their sales being disrupted (and willing to bash), and then layer on again umpteen short and distort groups seeing this combination of characteristics as a licence to print money... This was *extremely* nontypical.... even in the wild and wooly world of start ups and venture capital. All this happening while amda holds the holy grail of medical material for ortho implants...
Well now the financings have normalized and very critically the Hercules loan is nearing maturity. IMO this signals the unwinding of all that has happened in the last several years. An analogy is the more you compress a spring the harder the recoil. Right now the share price has no relation at all to the underlying value of the tech at amda.... All the bears can say is "look at the trend down" or so and so is incompetent or overpaid etc... They never talk about the tech or the history of "compressing the spring"... So in light of the nontypical history I am expecting a nontypical response...BTW this is another reason I expect a deal done soon, is that they do not want the spring to blast loose beforehand. Seems like a perfect chance (surreal actually) for a competitor to get in cheep, or at least ensure fair market price paid .. AMDA is a fully compressed spring right now and the hercules loan is about to come off (if not already)....
Thanks Boston, and CL ... very accurate and deep as usual ... Next weeks to months will be very interesting... Lets hope both patients and shareholders are treated fairly with however things eventually unfold....
"all shares will be role calling":
Yes and so if you wanted to accumulate 10% to 15% this would give you the liquidity to get it done... and then at BO let others worry about squaring their books...
A big (and amazing) incentive for a smart company ....
Also keeping price low is part of the illusion and bamboozling to keep ortho industry companies (other than the one running the show?) thinking amda must be a POS.... Its human psychology even in big companies ... and they are willing to short (legal or otherwise?) to achieve it... Its like a wolf marking his territory by urinating... Of course a company can figure this out (sometimes) and use their will to short against them.... i.e. accumulate...
I think SB would be a great head of Spine ....and the fact Zimmer Spine head just stepped down is very suggestive of the BO. You mentioned this earlier today and I never got back on it; but it is very very suggestive of the BO... Thanks for mentioning it...
German Ceramtec (group) a circling vulture?
With the independent femoral head tests showing AMDA superiority over well funded Ceramtec (tested side by side) ..... I think it is pretty obvious they are watching amda closely ... knowing the amda share price is ridiculously low (maybe x 50,000 up to fair value) relative to the market potential....
Knowing in medical grade material there is no future for being #2 ......... what are they doing right now in Germany? Probably at times reading this board maybe, as bizarre as that might sound..... Being from Europe, where things are different in business (they do not allow shorting for example in Germany) I think they might try to use their geographic location to their advantage...and accumulate in the limited time remaining... I wonder if they also have hired a full time basher .....
More reasons a deal likely:
IMO Hercules holds all the cards on a deal getting done (and I doubt this is by accident). First of all, it is possible that Hercules has already been paid off....
Assuming they have not been paid off yet though my thinking is that up until such time as loan is paid off Hercules can give conditions on early repayment. The extent of possible conditions is up to debate.
Can Hercules negotiate with an industry player, who is a suitor, on the one hand and AMDA on the other hand? In other words allow a sale (by clearing their loan M&A restriction) but only to a certain suitor (directing the sale to a party).
You can see that Hercules looses all this control in 5 months, if they do not negotiate something beforehand. Also with 5 months on the clock, and how long deals take to negotiate the clock is running out...Also a suitor sitting quietly on the sidelines knows that after 5 months it will be world wide competition for AMDA ... including Japan, China , Europe and offshore all entering the fray...
I doubt any ortho industry companies, who know about amda tech, wants amda to be free of the Hercules restrictive M&A terms....there is too much uncertainty then for them... IMO all this points to a deal being done soon IMO...
JMHO but a R/S or even OTC downgrade means zero fundamentally with amda... other than the shorts will take advantage to shake investors hard...
They are trying so hard to show red: simply only way to shake college/social media investors (who will not sell on green) who were targeted here IMO...
Thanks for all the sincere factual posts here as usual ..... on what has become, by far, the best location to exchange ideas and info on AMDA.
I think the BO thesis will prove out to be correct in the coming weeks. The radio silence , and other factors, however indicate to me that there is an effort to sell to a particular suitor. As a result I am hoping the ortho industry wakes up to this imminent reality and starts to move quickly. Accumulate AMDA votes (common shares) directly would be the most obvious as it also has the added benefit of raising share price to levels ideally reflecting the IP's industry wide value.... while building up vote counts and getting a voice on where the tech is deployed... Just guessing but likely there is still time to accumulate 10% if some more aggressive accumulation (buying from the ask) is employed... IMO sitting idle will be a fools game for industry players...
Yes but likely only if they receive a bonus, and further as long as they do not have any political affiliation to a industry player other than the suitor.... But after weighing things I think they probably would allow 7.5 removed and they will get a bonus as a result IMO...
Great deep discussion here as usual: just my opinion but I doubt any industry player that wants AMDA tech (after doing their own vetting and in-house dd) would sit back and wait for approvals (from a company with lack of funding and potentially have others get it first) before purchasing amda or its tech... I have heard this reported many times though, but it does not make sense...IMO it all about the Hercules loan terms as to why no serious moves have been made.
However now that the loan is nearing maturity, there is likely an incentive for Hercules to allow early repayment ..... why wait until the very end of the loan and just get the amount owed when I am sure they will get a bonus now, just 6 months before maturity, and also knowing they have no chance to get their hands on the tech...
Just guessing but if I was Sonny I would have cut back until Hercules loan was well under control since the terms were so dangerous ....I am guessing this was guiding his cut to r and d (as well as the general cost reductions company wide) , until perhaps he saw the Hercules loan well under control...
Japanese interest rates are basically zero:
So I guess Kyocera must have a very low cost of capital that can be piggy backed on by amda post acquisition...
It is quite common for contract manufacturers to require a lot of costs covered externally ---- even tooling... Do you know what costs are to be carried by Kyocera? and in which markets? I assumed china would be manufactured by a different source.... I doubt a contract manufacturer would carry inventory for them....
Funds required to ramp sales large:
Great DD again by all here. Just wanted to mention the funds needed to ramp SiNi sales is likely way larger than you would think .... not including trials and licensing..just thinking about manufacturing, marketing and financing inventory...If a suitor plans to fulfill the Weigo deal alone the financing for inventory and factory tooling will be huge there and then add every other market and product ... I have not crunched numbers but I would not be surprised to hear they use up $500 million of working capital just to ramp the manufacturing and marketing of the range of products across the initial 5 or 6 global markets.., especially if they plan to do it reasonably quickly. Then you add in acquisition costs and trials and licensing...In a nutshell, to capitalize on the vastly superior tech with a serious ramp up a suitor would need a substantial investment ... which IMO they would be richly rewarded.
The apparent positioning of Jana should be an alarm for all industry participants and IMO will not go unnoticed by competitors.
Only 5% ish of amda product/market combinations are available now in the market. Therefore current rev can not be relevant in valuation. Add to this that in the 5% ish in channel now they were impeded... Lastly, the CEO IMO did great for reasons I have mentioned, but to really optimize ramping sales the co needs a high level medical marketing team ... maybe partially led by a more marketing focused co-ceo (maybe SB being the tech dev side co-ceo).... A BO suitor will look at the tech and try to figure out what its management team can do in sales with the tech ... not what incumbent can.... For these reasons, current sales should be close to being irrelevant to valuation IMO...
This forum now a valuable dd asset:
Have been on holidays and just caught up on reading all the back posts. Thanks to those who have provided their time to contribute sincerely and very meaningfully here.... several months ago there was maybe one post a week here..what an improvement.
There has been a **MASTER** game of illusion played here ... this is a multi **BILLION** dollar priceless asset. IMO the industry will not allow a cheesy take over of the amda IP .... any take over must be realistic (and the manipulated share price and the manipulated last quarter revenue are meaningless in the valuation)....A suitor risks being exposed and shown the exit otherwise...
full time mid level staff on grants needed:
After thinking more on the financing I think amda staff recently has not had a chance to stand back and take a look at things from 30,000 feet, especially on financing...IMO they should get a midlevel staff person on grants (world wide) with probably 50% of that persons time ... it would pay huge dividends. The technology is so obviously valuable that it would successfully attract grants .... which are incredible smart focused money. The fact there is no dilution is an obvious benefit as well. Extracting some additional funds by selling area marketing rights could take up that staff persons other 50% of available time...and again no dilution.
Many options for financing ... co close to break-even... The nonsense talk of financing issues is targeting investors, purposely placed in the stock, who rely on two sentence tweets for their DD...
Since amda is close to amda it is not known if or to what extent financing would be desired (not needed). You see it depends on growth initiatives. If they try to expand quickly then yes they will likely require financing. If they try to stabilize, and achieve brake even they may not need additional financing. AMDA , if it chooses, can source many basic and some creative forms of financing...other than the usual share dilution. Sonny needs to focus on optimizing in this important area going forward.. Things have improved but more work can be done..
--traditional basic bank financing: Yes walk into any large bank and receive traditional financing.
--medical specialty financing funds: There are several hundred specialty medical funds out there that have various strategies. Find the ones that fit well.. they can do much better here than Hercules...believe me...
--factor receivables (speed up recover of money receivable):
--sell marketing rights (geographically): this does not mean handing over any manufacturing or central control but companies pay to have exclusive sales/distributor rights for their local markets.
--Grant money: They could likely get many millions if they focused on this , and getting the apps out. Austraillia is well known as a country that supports good new tech and will pay up. Note this is free money...
--seek out big thinkers, with deep pockets , of disruptive tech: Google, Gates, Musk etc...
Proposed new logo for peek boys: dodo bird
first they can all merge and then together adopt the dodo bird as a logo ... and they can hire the past staff of Kodak to do counselling of employees being laid off in mass... Graphic but accurate. Note the dodo bird was "slow to act", "dumb" and became "extinct"...
$0.05 price up on $50 plus value stock?
Nice for traders and for longs to see buying but in terms of price matching value, keep it in perspective IMO....
Look see the left hand move, and a white dove appears in the right hand.
Ortho Industry: remember Kodak? Xerox?
If you were Kodak, back in the day, would you think it smart to align yourself with entities bashing digital cameras? ..... Ortho industry (top to bottom) needs to wake up and buy the best new tech ... the other option does not work... do not be fooled into the wrong choice...
I think amda can provide correct sizes for asia... my point is that Japan is very knowledgable in the asian market. They would think they can add value by marketing there ... it might only be special packaging as an example .. but they would study it endlessly looking, where others might not, to try to add value for asian markets...and if they see some big product dev ideas with amda tech this would nudge them to think about purchasing the tech outright maybe... yes 3d printing will be exciting...
You know that powerful entities want this stock when you see them knock it down so much , and so aggressively, after approval .... Obviously it was pre-planed.. Its a no brainer...who else would would want to crush the optimism in the company so urgently, and at the most critical time....... The epi pen will have less uses with other meds also,,,,, the Sym pen, smaller , sleeker, future uses will be endless... could see it become the gold standard of home injections... IMO the float has been played big time,,, and the real deal begins... Castor is a genius...
interesting did not know that about Sonny. BTW the Japanese will think that their bodies are slightly smaller than European (thinking implants may need tweaking to optimize) , but exactly the same as Chinese, and so this is partly why they will be eyeing china...