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My apologies if my reply was perceived as disrespectful. There are many here who are willing to just throw around numbers without any basis in reality. I appreciate your opinion, just wanted to make sure it was actually a realistic #. Thank you again for your insight.
Out of curiosity, how did you determine the $0.265 multiplier on the net assets?
Thanks for pulling a number out of the air. Care to show your work?
Well, if the company is being bought out, it should be valued on the company's balance sheet, not on the current share price. Although the company has a lot of debt, they also have a lot of assets. Is anyone able to do a quick calc on what one would expect the $ per share that would be possible for a complete buyout of the company?
Agreed. Technically the end of mid-april would be April 20th, however I think most people associate the 15th of the month when someone states mid-april. That could be another possibility for the drop at opening today is that people expected the news to come out last Friday AH.
It's bounced back pretty well so far. I'm wondering if it's just a little touch of manipulation to allow someone to get in 80 cents cheaper before the FDA announcement.
WHOA! Anyone have an explanation for the huge drop this morning at opening bell?
This is so ridiculous, just like 95% of stories about ECIG's blowing up. If you actually dug into the details, the vast majority of these cases are because some dummy mods their vape unit with a battery that is not suited to the application and/or using the wrong battery charger. The latest one in the news was because a lady was using her iphone charger for her vape pen. wrong charger for the wrong application... you can't fix stupid.
Despite all that, from a pure statistical view what's worse? A couple dozen people getting minor 1st degree burns from a malfunctioning ecig/vape pen? Or the millions that die from complications due to sucking in all the toxins and carcinogens in traditional cigarettes?
Bottom line is that the act of smoking ecigs, is significantly better for a person than smoking cigarettes. See Public Health England's report suggesting they are 95% safer than traditional cigs.
Based on the fact that this was run down from $2 to its current price on the rumor of bankruptcy, if SUNE releases news that this is untrue, and instead they have the backing of their creditors and are restructuring debt, I do think this could jump back up to the $2 range. It might even spike as high as $5 if there is a short squeeze, before falling back down.
I think anyone expecting this to jump up to double digit dollar value and hold there is huffing paint.
If SUNE pulls through this, it will still take time to rebuild investor confidence, and if it does start a steady climb back up towards previous highs, the stock will be fighting flippers the entire way. It will take a long time to return to a "fair value" based on the company's assets.
All IMHO
I can agree with that. I'm a fairly novice investor, but I've already learned my lesson with a couple other stocks about holding through the news.
I know its all speculation, but where do you think the SP could run up to in the short term if we get FDA approval by end of week?
Personally my expectations are tempered by the fact that sales will be a long and tough road following the approval. I fully expect this to spike on FDA news, and then fall back to current levels or slightly above that for the long term until significant sales can be proven.
nobody knows what is going to happen with this stock in a week or two, nevermind a year or two!
Yeah, I don't blame you. There's gotta be a pretty big upside to justify that large of an upfront payout.
Out of curiosity, did your $2k payment give you anything more than just the name of the stock?
I can't answer for them, but like I said before, I suspect they were A) too lazy to change all the marketing material, or B) left it like that on purpose, as "tiny $2 stock" sounds much more enticing than "tiny $4 stock".
The biggest issue with their "pro services" business model, is that you have to pay them upfront. They have no incentive to care how well the stock actually performs, because they have been paid their $2k per subscriber upfront.
Their ongoing regular subscription service however has to be performance based, otherwise people will unsubscribe and the money will dry up.
Aside from the above, the only other thing I can think of, (and it's unlikely) is that stock gumshoe got their analysis wrong, and the "tiny $2 stock" they are pumping is actually a company other than TRXC.
Originally expecting a final decision by March 31st, then company issued a release saying it was delayed but expected a decision by April 15th.
To my knowledge, there has not been another delay to the FDA decision, but we're still a week away so I guess anything could happen!
From the DD I've done, It sounds like everyone would be really shocked if the FDA denies it, so I imagine it's only a matter of when, not if it gets passed.
You're referring to Money Map Press's non stop pumping of this stock. When they first started running this marketing campaign, the stock was around $2. Less even. In an effort to try and cash in on more suckers before April 15th, they got lazy and just started rehashing the same spiel, without updating it to reflect current share price.
For their part, I like the money map guys, but every time they go bananas like this, I shake my head. I don't understand why anyone would pay them $2000 just for the privilege of being handed the name of this stock, when stock gumshoe will expose their 'secret' stock, lay it out for free, and also provide a more honest and unbiased analysis!
Any legitimate investor is going to do their own due diligence before hand anyways. The only people I can see that would be drawn in to this marketing are those looking for get-rich-quick scenarios, without having to put any effort in themselves.
just more hype around the FDA approval. Watch it tank back to $4 if the FDA delays again. lol
At this point, TRXC has already made over 100% gains in just the last 2 months. Assuming the FDA approval will happen by April 15th, that will further boost the share price in the short term.
The reality is that just because TRXC has 2 (almost) devices already approved for sale, does not mean much without actual sales. The company has stated recently that this is their focus moving forward, and they have expanded their sales force appropriately.
Anyone who has invested in the medical space before can tell you that sales do not happen overnight, and in terms of revenue, the FDA approval means sweet f*ck all in the short term. They still have to convince hospitals and medical centres to buy in. This is possible due to the lower price tag compared to the da vinci, but sales are not by any means guaranteed at this point.
In full disclosure, I am long on TRXC in the short term, but if we see a pop in share price in the next couple weeks due to the FDA approval, I will most likely take my money and run. Significant sales are likely still at least a year or two away IMO. Without those sales, the company will most certainly have to raise more money for operations in 2017 and beyond, which means dilution.
I refuse to compare TRXC and Titan at this point because although they are in the same industry, they are on two completely different time lines. One has approvals but no sales, the other has more hype regarding possible stronger sales (when it happens) but no approvals. Everything else is just noise.
All IMHO.
Thanks for the clarification. So if I'm getting this right:
Settlement: Should show up in Q1 report as a separate line item for a one time cost.
Royalties: Paid out on sale of e-cig and vaping devices (not liquids). Should show up in Q1 report as a reduction in bottom line profit.
My point is, whoever was using the settlement/royalties to argue for Q1 showing a lower revenue is mistaken, because no matter which way you cut it, these payments are not going to affect the revenue value shown, it will just affect the bottom dollar profitability. The way I see it, it's entirely possible to see a larger rev (potentially $17M?), but our profit margin on that revenue will show as lower due to the royalties paid moving forward.
So either way, it shouldn't impact the Q1 revenue #, it should just show up on the EBITDA. Right?
Someone correct me if i'm wrong, but my understanding was the patent settlement was concluded with a royalty (5%?), not any lump sum payment. Wouldn't the royalty come out of the net profits, rather than affect the reported revenue?
Discounting the recreational use of marijuana, there is a large community that is accepting of marijuana for genuine medicinal purposes. To that point, the same relationship applies between tobacco use and vaping as it does with marijuana.
Any regular marijuana user (medicinal or recreational) who legitimately cares about their health, will search out safer options such as vaping, or even go as far as edibles.
The turn around from Kent is somewhat surprising. He has been incredibly bullish on SUNE up to now, but I guess the latest SEC filing scared him to the point where he thought it would be too irresponsible to his subscribers to keep hanging on.
I wish I knew the real story, because it does seem somewhat fishy that it wasn't SUNE itself that released that SEC filing. It was Terraform. And knowing how at odds they have been of late, coupled with the fact that the SEC almost never announces that it is currently investigating anything, something just doesn't feel right about the current rumors.
See below for Kent Moors @ Money Morning latest update. Regarding cash on hand, I'm not sure where Kent got his numbers from (maybe directly from the wall street journal article), but he's issued a sell recommendation, and expressed his disappointment in management of this company.
March 29, 2016
Action to Take: Sell SunEdison Inc. (SUNE) at market.
Urgent Update Re: SunEdison
By Dr. Kent Moors
This morning, I woke to the disturbing news that SunEdison Inc. (SUNE) is under SEC investigation for having mislead investors about how much cash it had on hand.
I'm furious, as I'm sure many of you are.
I first added this company to the Energy Advantage Portfolio on the basis of its phenomenal potential, and I recommended that you stay in through all its temporary volatility because the company - according to its filings - appeared to have enough liquidity to weather this crisis.
But now it seems that SunEdison's management may have in fact been misleading investors about its liquidity. The Wall Street Journal reports that the SEC is investigating whether SUNE's reported $1.4 billion in cash was actually much smaller than that, potentially as small as $56 million.
This, if true, is dangerously misleading, if not outright criminal.
But even more than anger, I feel disappointment. SunEdison assembled some of the best solar power assets in the world, becoming the world's largest solar power developer. The company was perfectly positioned to profit off the explosive growth of solar power - estimated to reach 80% in the U.S. in 2016 alone.
If the SEC is correct, and SUNE executives did indeed mislead investors (including us), then they managed to waste all of this wonderful potential, and - worse - shareholders' money.
And even if that turns out not to be true down the line, the markets will still react as if it is. The only thing that's certain now is that this will play out in the courts, potentially for years. And I don't believe it will be worth riding the inevitable ups and downs.
Sadly, it's time to let this go.
If you followed along on this trade, the prudent thing to do now is to leave and retrieve your remaining capital. The risk is just too high now, and this latest news suggests that SUNE's management has no clear way out of this.
As much as I would like to see the potential of this company bear fruit, with this morning's news, there's just no sound case for hanging on. When there is this much speculation and rumors surrounding a company and its management, the full damage is difficult to measure.
That means it could get worse from here. And I don't say that lightly: this is the most disappointing situation I've ever witnessed.
I'll continue to follow SunEdison even though it will no longer be in the Energy Advantage Portfolio, and I promise to let you know of any developments.
This is such a shame, given the months of research and resources we've devoted to our coverage of SUNE. And - worst of all - the extraordinary trust that shareholders placed with management.
There's more to follow on this story.
In the meantime, here's what we suggest:
Action to Take: Sell SunEdison Inc. (SUNE) at market.
Sincerely,
Kent
P.S. I'll also be looking for opportunities involving SunEdison's physical assets - which are still significant in their own right - whether the company itself weathers the storm or not.
Honeycomb,
I appreciate your positivity on this board, however it seems that you are just really bitter about this QoQ / YoY revenue thing. It seems to me that people were just repeating what they wanted to hear from the Roth conference, and not what was actually stated.
In any case, if you made an investing decision based on opinions of other ihub board members, you have nobody to blame but yourself for the outcome. You could have just as easily confirmed the info yourself. And that goes for anyone else who shares the same opinion about this as you.
If, however, your investing strategy was set in stone regardless of the 20% rev growth being QoQ or YoY, then this makes no difference, and you are just making a big stink over nothing.
Bottom line... do your own DD, and don't treat other's opinions as gospel just because you *think* they are reliable.
Keep up the posting! It's great to know there are regular board members such as yourself that are dedicated to providing honest and insightful discussion into the future of this company.
Dan did NOT confirm manipulation. He mentioned that they launched an investigation, but refused to comment on whether or not there was illegal manipulation taking place.
ECIG launched investigation last year to determine if there is in fact illegal stock manipulation. Dan has no comment on specifics (request by legal to not comment).
Dan states one real solution to this situation. Company performance coupled with solid investor base.
It's in Dan's hands to make improvements, and dedicate time to convey those improvements more frequently to investors.
Additional 250 stores for Vapestick in the US planned for the next month or so. Goal of 750 stores by EOY.
This stock is being recommended heavily by Kent Moors over at Money Morning. Just thought I would share his latest update on SUNE. I certainly don't rely on these guys like gospel, but they tend to have a decent track record. I just can't figure out if this article was written simply to justify a poor recommendation, or if he genuinely expects this to pop out of it's current undervalued territory. (Originally recommended to purchase in the $3.30 area.)
March 24, 2016
The Latest on SUNE - the Next Few Days Will Be Critical
By Dr. Kent Moors
SunEdison Inc. (SUNE) has taken a beating lately, on the back of rumors (from a single source - Debtwire) that it's looking for emergency financing.
Now, we originally added SunEdison to the Energy Advantage Portfolio because, as the world's largest developer of renewable energy, as well as the U.S. market leader in the design, installation, and financing of solar power, it is at the center of the rapidly growing - 39% in 2015 - global solar revolution.
SunEdison's assets and global presence are simply unbeatable. For example, the company built the largest military solar plant ever (16.4 MW of power on 170 acres of land) at the Davis-Monthan Air Force Base in California. SunEdison's portfolio also includes several other military projects, as well as solar power plants in Chile, Italy, South Africa, India, and many other countries.
Of course, this rapid international expansion requires leverage - taking out loans to finance further development.
That's not a bad thing. The oil industry, for example, has operated like this for decades. But high leverage does make companies vulnerable to external "shocks."
For the oil industry, that was the collapse in oil prices since late 2014. For SunEdison, it was the unintended side-effects of the company's pioneering "yieldco" structure.
SUNE's yieldco subsidiaries, as you've seen here in Energy Advantage before, are daughter-companies to which SunEdison sells revenue-producing assets (finished solar power projects). In return, SUNE gets up-front cash that it can use to develop even more solar power plants.
Unfortunately, SunEdison's management failed to anticipate how the complex financing relationships between SUNE and the yieldcos might create investors with very different interests.
Shareholders in the yieldcos, for example, might well try to use their influence to lower the price SunEdison gets for selling assets to its subsidiaries. This is what David Tepper's Appaloosa Management, a hedge fund with a 9.5% holding in one of the yieldcos, tried to do earlier this year.
This put SUNE under financial pressure, driving down its share price.
These investors, of course, failed to realize that by driving down SUNE, they would eventually hit the yieldcos hard too. After all, the value of SUNE depends in part on its ability to sell assets to its yieldcos, while the value of the yieldcos depends on increasing their revenue flow by buying more assets from SunEdison. Both sides need the other to do well.
The end result is that the investors that pushed SUNE down also overextended themselves, and ended up putting both SunEdison and the yieldcos into massively oversold territory.
Now, let me be clear: it is in no one's interest that SUNE go bankrupt. SunEdison shareholders would lose money, of course. But so would the company's creditors, as their debt (and their ability to turn SUNE's very valuable assets into cash) would be stuck in courts for years.
Neither would yieldco shareholders or creditors benefit, as the value of those companies is so tightly linked to SunEdison itself. In addition, yieldcos are new and legally untested - were SUNE to find itself in bankruptcy court, the value (and ownership) of yieldco assets would also come under legal scrutiny.
That could take years to clear up.
In short, if SunEdison goes bankrupt, no one gets paid. So it's in everybody's interest to resolve this amicably.
Which brings us to the current situation.
Everyone's Waiting for March 30
Rumors have been swirling that SunEdison is in talks with creditors for additional "debtor-in-possession" financing - a kind of credit usually restricted to companies in need of short-term cash.
First, note that these rumors remain unconfirmed.
Second, with the company this undervalued, this is just the kind of situation where new, outside money could come in and scoop up both equity and debt at prices significantly below the true value of these assets.
Remember, the company's problems are short-term. The larger picture remains overwhelmingly positive. Solar power is growing and will continue to grow - estimates put U.S. solar power's 2016 growth at 80% - and SunEdison remains perfectly position to profit.
Unfortunately, there is a roadblock to both additional financing: SunEdison's annual report.
The company has now delayed filing this report with the SEC twice, citing first an internal audit and then faulty IT controls on their internal reporting. This means that creditors, shareholders, and anyone thinking about going in is in the dark.
Now, March 30 is effectively the company's final deadline for filing this report. That's when, as Bloomberg reports, $1.4 billion in debt could be called into technical default.
I say "could," because while failure to file by that date gives SUNE's creditors the right to call a default, it's not in their interests to do so. As you saw above, that would tie their debt up in courts for years, with little hope of getting much back.
They would be much better off extending the credit lines instead.
Of course, nothing's guaranteed. Even successful financial firms have been known to shoot themselves in the foot before.
High Risk - But Potentially High Reward
So that's where we are now. The severely underpriced SunEdison presents an opportunity for existing or new money to scoop up equity and debt on the cheap, giving the company the chance to move past recent events.
Were this to happen, you would see an immediate pop in share prices - a double or more in days.
Of course, that depends on the company filing their annual report by March 30 - which is what we're waiting for now.
Now, if you're uncomfortable with that level of risk, you may want to take moves to preserve your equity. But if you have the risk-capital, and SunEdison succeeds in securing new financing, this could ultimately deliver life-changing gains.
I'm following this intently, and will keep you up-to-date as we approach this deadline.
Sincerely,
Kent
I thought it was interesting that as per Vapestick's affiliate program, the one thing you are not allowed to do, is advertise the product as a cessation device. You are allowed to explain that it is safer and healthier alternative to smoking, but that's it.
https://www.vapestick.co.uk/become-an-affiliate.html
"Here are the current Golden Rules!
VAPESTICK® products should never be marketed to, or sold to, anyone under the age of 18. Nicotine is addictive and classified as toxic, particularly when in direct contact with skin. VAPESTICK® products should therefore always be kept out of the reach of children and pets.
VAPESTICK® products should never be described as ‘quit smoking’ devices or as being ‘healthy'. You can market the product as a ‘healthier alternative to tobacco smoking’ which ‘avoids the smoking ban' and you can also state that it ‘contains no tar, no smell, no ash and no second-hand smoke’ If ever in any doubt, please check our website for our updated disclaimers and phrasing. If we haven’t said something that you’d like to, it’s a fair guess that its because we not allowed to, or we probably would have done!"
Dan made it clear that there is an exit strategy. very likely a buyout scenario. As has been said multiple times, if the company is bought out, it is valued on fundamentals, not on current share price. Meaning that there is no immediate need to be uplisted, and it can happen naturally if it happens at all.
yerboss also had a great point that anyone at the Roth conference who was shown the 10k numbers are embargoed from purchasing until the 10k goes public. That alone could be the reason no big buying has resulted from the Roth conference yet.
I think one of the driving factors going forward might be liability.
Is it possible that given the affordability of the unit, and negligible per procedure cost difference between traditional laproscopy and surgibot, that hospitals might start pushing their surgeons to using these devices in an effort to reduce the human error factor?
Is it possible that using these devices gives the perception (regardless of whether its true or not) of providing safer surgeries, and could positively impact insurance rates? That alone could be a catalyst.
Plus, surgeons are no different than anyone else. People resist change. But the culture can easily change if mandated from the top down.
Not all that unbelievable IMHO. As had been stated by yerboss, they have yet to pick another IR firm. I personally don't quite understand what's taking them so long to select one firm and roll with it, but I do get how they wouldn't make any IR push until the new IR firm is locked down.
If they are doing any roadshow work, why bother announcing it before any alleged manipulation is dealt with? The company openly acknowledged the manipulation in a conference call, and past evidence has shown that any positive news without true fundamental improvement is met with more downward pressure on the share price.
Finally, i'm sure there are things Dan & Co. could do to address share price in the short term, but again, it won't have any lasting effect until the underlying issues are addressed. I can see how traders/flippers may be unhappy with the share price at the moment, but any true long *investor* should just be happy about the opportunity to load up on cheap shares now before it does pop.
Just a little more patience, and you will begin to see real improvements in this company all around. As it stands, Dan has done a phenomenal job digging this company out of the pit it was in, in only the last 12 months! Not many other CEO's can claim that feat. Patience, and a little faith that we have the right person in charge.
This is just the novice in me coming out, but can someone explain how the stock drops $0.013 on a sale of 4000 shares, but only climbs by $0.005 on the purchase of 16000 shares, and then falls that same $0.005 with a small sale of around 1000 shares?
I understand that the sale and purchase of shares is not a linear relationship to share price, however the reason behind this is not quite clicking for me.
Don't get me wrong, I'm very appreciative for Nate's regular charting analysis of the stock. He's doing something that i'm admittedly not well versed in and I admire the time and effort he has spent on learning and applying his knowledge of charts, but even a blind squirrel finds a nut once in awhile! haha
I certainly haven't been tracking it, but it feels like Nate's been batting under 0.050 on his predictions with this stock.
I feel like this is pretty obvious for anyone who has been following the sector for any amount of time.
E-cigarettes represent a technology shift, and if Big T just outright opposed e-cigs, they would do nothing other than slowly watch their profits shrink into oblivion as more and more people switched from combustibles to e-cigs, or even just outright quit.
It seems obvious to me that Big T is lobbying hard, and pushing for the FDA regulation of e-cigs because they know, without a doubt, that it will eliminate 95% of their competition, and clear the way for Big T to monopolize e-cigs and vaping.
At an estimated $5M cost per SKU to go through the FDA's regulatory process, and each different juice flavour being considered a different SKU, it guarantees that the only companies that can afford to subject their product to this process will be the companies with billions of $ in their pocket already... AKA Big Tobacco.
Unless the policy makers in the US can "see the light" so to speak regarding the safety of ecigs, and the massive negative impact to free market competition by enforcing such strict regulations, the US may be a lost cause for any company other than Big Tobacco. ECIG may pull through and survive in North America due to their significant existing revenues, but I'm more excited to watch ECIG's growth in the rest of the world.
No deception to my knowledge. Aside from not having as many news releases as some people prefer, Dan has done a terrific job so far. The member FreezeThese has been great about keeping everyone here up to date on ECIG's legal battles. There is still a little of that to deal with early in 2016, but otherwise we seem to be golden, with consistently increasing revs.
My personal opinion is that despite what some people say, the FDA regs are not going to hurt us all that much. Most of ECIG rev is from UK anyways, and the company just keeps continuing to grow. On top of that the FDA regs wont come into effect for 2 years, and anything can happen in that time including MENA possibly loosening their grip on ecigs, and the Mansour avenue pushing forward at full speed. Worst case scenario, ECIG grows to more than $100M revs per year by the time FDA comes into effect, and we are big enough not to be swallowed up by said regs.
Take a look at the quarterly reports over the last 9 months. Company fundamentals have vastly improved, faster than most people expected. General consensus on this board seems to be that the share price is still being held down by manipulation, and lack of buying due to uncertainty around FDA regulations.
As has been mentioned by others, i wouldn't be surprised to find out that most investors are sitting on their hands until the whole FDA regulation thing smooths out. That being said, it doesn't benefit the company or investors in any way to release PR without any real news.
Example ECIG PR:
"Hey guys, I know you all want to see a higher share price, but between the looming FDA regulations and the stock manipulation that we publicly admitted, nobody wants to buy. I can't imagine why!!"
Give the company time to work behind the scenes. It's only been a few weeks since the Q3 fins for cripes sake! Do you need them to hold your hand each week with a new BS release?