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good work @realfast95
Further bonds recovered from the flash crash, stable again.
EGL 002 study completed October 2017, IR mentioned a release within 4Q17 and update within 3Q17 CC.
And, if I am not mistaken, Arymo AD label gets extended 2018?
Last but not least a good double bottom and reversal sign today.
Restructuring Game Over for US Investors
The restructuring filings mentions:
'HUSA Production Play' Blog Entry
Read HUSA Production Play, from my buddy 01. About time somebody deciphers and writes about it in more detail.
He also updated the economics w/ current known data.
O'Brien 3H on 10/13 and Johnson State 1H on 11/6
O'Brien 3H being hydrotested today and should flowing gas by 10/13.
Johnson State 1H has a targeted service date on 11/6.
An email has been posted on ST and 01 and myself have talked with
Sam Arneson of EagleClaw Midstream. Hence this is a double independent confirmation that that the 2 wells will produce very soon and this is not a scam at all. The latter being claimed by some short players.
Further more, the other 2 wells in same area are planned to be connected to the nearby pipes after flowback this year as planned.
Here the email post, see this thread:
Update on revenue model
the build in production flow decline, as widely known and also stated by company via their cumulative MBO in presentation:
(See also this data source)
Knowing the royalty interest about to be 25% and using the low average working interest of 18.6% we end up with around 14% net revenue interest.
Adding above hyperbolic decline bottoming out in the 3rd year and giving 80%+ within the first months we end up with the following conservative estimate.
Note that 2017 has the 2 soon to be connected and producing wells already payed off, hence the remaining new 2 wells for 2017 as mentioned in October presentation are left open.
Note that D&C costs are being payed in three tranches, upfront, at drilling completion and one month afterwards.
The D&C deficit up-until 2018 of around $5M is covered by the remaining cash, ATM and Warrants - used up until end of 2018 at higher stock prices. Cash flow positive is expected 2018 and profits 2019.
Evaluation is usually based on cash flow, BOE production numbers etc, depending on development stage, credibility of projection a multiple of 5-20 shall apply on the gross-sales. This should allow a stock price support of $1.20/sh in early 2018 fully diluted. Surely market needs to give company the credibility executing their plan.
Company is debt free.
Addition bonus: Currently worthless Columbia assets might be monetized as soon as the political environment allows.
Next very short term catalyst: Connection and production of the 2 completed wells.
Company may elaborate on the model of their plans and disclose more details having the 2 wells producing.
KUDOS as usual goes to 01 for mining and preparing the data as well to talking with company officials, incl the CEO
Yes, quite complicated T-1 & T-2 deals.
The analysis posted here still stands and the high priced conversion will take place until next week.
hibernation ...
Good question!
Looking at the chart and the past events, AMRS experienced:
- T-1 offering
- RS 1:15
- T-2 offering
This was quite a triple beating heavily utilized by the market, here the short play of course.
The beating down went so far below any historical Enterprise Value (EV) that even retail longs started to lose faith.
However, it might be simply natural. Even one of above events would have the power to bring a stock 20-30% below offering price for the short term, but usually recovers later on. Now we had even a RS and another subsequent offering.
The nature of the offering is quite different in this case, semantics. Both are being held by long term investors _and_ the new long term partner DSM. DSM also has a BOD seat now and partakes in controlling the company while collaborating.
None of these shares hit the market.
It often is easier to burn down Rome than to rebuild it, hence it needs time to grow confidence in the renewed AMRS.
Another question often arises: Do they have enough funding until 2020? Emphasizing the cash burn and debt payments starting mid 2018 until end of 2019.
This question is surely hard to answer, however, DSM mentioned they had an insider view into company's books and wouldn't have started their investment if financing wouldn't be on solid grounds (-> Investment Day). Further we have the hint in 2Q17's 10-Q 'going concern' filing, where they reduced the warning of not being cash flow positive 'only' into 2018. Indicating that maybe 4Q17 could mark a turnaround.
The best thing to validate the financing capabilities will be 4Q17 ER, with all of DSM's collaboration and maybe product revenues present.
If this is the remaining question based on the big long term short play visible right now, any technology breakthrough disclosure would surely ruin it on such path.
Long term short positions on technology stocks are difficult to say the least.
Conversion until 10/7 @ $5.91/sh avg
This will trigger some quite bullish Form-4 filings next week or the followup week.
As posted earlier, conversion is guaranteed and removing the Note's interest payment of the preferred.
Cash-Warrants now at $5.30/sh, which also is quite a bullish 'ceiling', if you like to see it as headwinds. IMO a conversion would be excellent for the company.
SI has been even increased over the last period, which is quite puzzling knowing the upcoming catalysts: DARPA, DSM collaboration payments for two products as posted and of course 2-3 sweeteners.
Brotas-2 should also be completed next year boosting COGS and volume.
The cosmetic branch, Biossance (sic?), may also increase as planned and add a little to the results.
Looking forward to a finally better 3Q17 (DARPA + DSM) and hopefully healthy 2018-2019.
Last thought about the too high short interest of 3.26M on 9/15, which almost reached the low float of 5M. Those may book on additional financing required in late 2018, which is quite a long stretch for a short position. If above catalysts do play out well, they may have a problem covering later on.
I assumed they already covered during the last run-up, hence the run-up itself proves pure demand.
Compared to sector, EV < $500M and MCAP < $260M is too low for their IP and tech. And magically, this is the price DSM was and is willing to pay > $5/sh.
Good Luck
I realized nobody posted the AS increase and it is my perception that the story changed big time here.
First it was combo trial done 'soon', then buyout.
Time has passed, a lot. Then the uplisting talk on that one conference and hence desired RS, months ago.
Nobody was clear about the uplisting, yes/no - company was fuzzy all about. Earlier this month the renewed proxy version.
You also have to understand that the objection to be a public company is to sell shares to fund operations for a hopeful future success. Sure we all understand that. Futher, if company likes to be uplisted and pays much higher fees for this process, it wants to sell shares on the new exchange after the RS. Look at MTNB for that matter.
This uplisting action here pushes the 'success timeline' further away, otherwise why even bother?
They could simply dingle along and get bought out with their success.
OK, you theory also has merits. Show off as a strong biotech, even though that re-capitalization process will be expensive.
Whichever it will be, little shrimps like us retail will suffer in this process. I took a timeout.
On the other hand MTNB did well in the uplisting process itself, only afterwards they started to show volatility and dived.
Thank you for your reply.
AS 757% increase by 1:15 RS
AS 350M -> 200M = 0.57 reduction, multiplies by 15 (value increase) we end up with an multiple of 8.57 of pre AS.
This increases the AS value of 757%.
Dunno what the RS deal was previously.
NASDAQ uplisting is attractive for company to have a nice secondary later on, yup. Otherwise it makes no sense, since the uplisting is much more expensive!
I agree with others here that uplisting implies no buyout within the next year, hence probably also no great results within that timeframe. JMO
Future Net Oil Sales Update
had a long convo, and the long term F&D costs number seems to be king for accumulated revenue calculation.
The later being used for forward P/S multiple and stock price appreciation.
Note the 500% growth in 2018 and then half each followup year while doubling the well count, ending up in $207M net oil revenue per year with 60 wells!
01 also included a Worst-Case Scenario, resulting in about 54% of the proposed plan - which still is highly profitable.
What would be a fair bottom price today, appreciating the growth?
We think of a 2.5 year fwd accumulated net revenue, here this would result using end of 2019 results and an OS of fully diluted 73M. Around $45M $0.61/sh fair bottom for the projected plan or $25M $0.33/sh fair bottom for the worst case scenario, as a future fair bottom price soon.
The future ceiling should overcome previous spikes, hence we could simply take the 3.5 year range: $127M $1.73/sh top - or $69M $0.95/sh top for the worst case.
Edit: I personally hope it stays at low 50c for a little while, allowing us to accumulate here a little more.
However market appreciates the developing growth, having the first two wells starting producing end of this month, the CEO surely earned investor's trust. They accomplished compliance right on time yesterday AH, as being PR'ed today.
Company also only utilized dilution in a very disciplined manner, only used up the ATM as required - saving SH value. I personally wouldn't mind if they raise more money to accelerate the 60+ well goal much quicker - but that doesn't matter here.
Projection: 60 wells total by end of 2021
01 pointed out that HUSA, according to their September 10th presentation, targets 60 (or more) wells until (end of) 2021.
They emphasized additional 56+ well from 2018-2021 on page 16, while having 2 producing wells end of September and start drilling 2 more wells end of 2017 - a total of 60+ wells.
Assuming only $48 per BOE and 1000 BOE per day (HUSA's plan uses $50/BOE and production is higher), the plan could look as follows
Knowing company has about $2.61M cash, the company could indeed self-fund this explosive growth, see fundamentals below.
The chart looks promising and exposes higher lows over the whole last year. The upcoming two catalysts might be essential to strengthen trust in the company:
- Actual start of production end of September
- Listing compliance (equity) notice issued by NYSE MKT (AMEX)
Both events should happen any day now, especially since company announced the production start 9/14 and SEC filed an equity compliant pro-forma on 9/11.
EDIT: NYSE MKT notified company on 3/21 that they need to be compliant by 9/18, hence a decision based on the equity compliant pro-forma data is expected any day now. CEO desired to achieve compliance this week, if not today.
Looks like a very interesting oil growth stock with almost no debt.
$2.75 rights offering ceiling up until 10/2 5pm EST
Answering myself: FDA Meeting and Trial Data Change positive
And now, let's see whether pearsby09 is selling,
putting his money where his mouth is.
Yes, once the BO min multiple was 5, let it be 4 by now. Who cares from here on? Hope they sell soon.
2nd day tape showing 95% buys, slapping the ask.
Bids below getting quite crowded.
Seems like the selling pressure resided and reversal is in play.
Needs a bit more volume here.
so .. we are still on track?
Recognized last 2 days has more selling than buying, stock still moving up. As if the bids were dip buyers supporting the move up.
Asset Management Sector Agreement / JV
JV deal moves $8.5M+ (55% 100M RMB) to Zhonglian Hengxin, working assets now. Another step forward in the Fintech direction.
Little update regarding fundamentals from 01
Quite cheap below $4 per share, and only like $35M intangible assets on the balance sheet.
PS/Edit: Orange prices are up due to the expected storm Irma in Florida. Well, while this may happen, hopefully they all get properly evacuated until then.
Overall volume was just 2.216M, VWAP $0.0958, equal to $212k
traded value +75.44%.
269k traded at the gong 4pm for $0.0924, -7.57% down.
01 probably missed a '0' lol, should have checked. (o8>
Re: Changes to NCT02483078, FDA Meetings & Delays
.. meaning this could either mean next month primary data readout and 'soon' publishing some results with the BLA application post FDA meeting - or - the FDA is not happy with the trial changes.
Yes, I would love to read your comments on my previous post.
In case of the former, this would be very positive of course.
Congratulations / Status
I missed it, but 01 got some (sold on the RIP though).
Some edited notes from 01:
Warrants Done & Financing 200% Premium 10c -> 30c
Warrants Incentive Program @ 20c should have be done on 8/31.
The Milost Financing initial draw being kicked off until 20 biz days since 6/29 -> 7/28. Now we are 27 sessions thereafter.
121d after issuance of the Notes (1st drawdown) the stock shall reach the 200% premium for conversion?
I am a bit puzzled, so 30c is the target price from here?
Company needs to send an update for sure.
Changes to NCT02483078, FDA Meetings & Delays
2017_08_30 Changes:
- Recruiting 2016-11 -> 2017-08
- last_follow_up_date 2018-08 -> 2019-08
- primary_compl_date 2017-08 -> 2018-08
- dropped <design>Safety/Efficacy Study</design> tag
- dropped <safety_issue>Yes</safety_issue> tag
- dropped <regulatory_authority>FDA...</regulatory_authority>
- added empty <fda_regulated_drug>..
Dropped Exclusion:
- Prior use of maraviroc or any other CCR5 co-receptor antagonist
2017_09_05 Changes:
- Recruiting 2017-08 -> 2017-09
- last_follow_up_date 2019-08 -> 2018-04
- primary_compl_date 2018-08 -> 2017-10
Effective Date Change:
- Recruiting 2016-11 -> 2017-09
- last_follow_up_date 2018-08 -> 2018-04
- primary_compl_date 2017-08 -> 2017-10
Now, can we assume they have changed this data in conjunction with the FDA face to face meeting, assuming an October primary read out based on the dropped exclusion criteria?
I hope the other changed (dropped FDA ..) are just changed XML protocol, not working without FDA consent. But if so, the face to face meeting could also have been triggered by the latest changes? Making FDA questioning WTF is going on here?
Puzzled ..
yes - DNDN pattern makes most sense here (and with some other stocks)
Good work for pointing this out, notable others on my WL in this regards: AMRS, XGTI, .. but their balance sheet is much worse than the 'new DRYS'.
Putting some pieces together here ..
- GE holds down SP vs Early SC 13D filed promoting his ownership
- GE is long in the end, owning majority in common shares
- MS is constantly increasing their stake
- Company is healthy now, no BK nor further dilution required
- Company is mostly untouchable in the US
- SEC action is late and does little to nothing, just temporarily harming some longs. Heck, even helping the buyers now.
'Wake Up' .. well, IF GE shorts down his own stock, then this is only temporarily to keep the rights offering 100% open for his backstop bid. This is long term bullish and he would also not exaggerate this action. I am unsure about this 'thesis' and even if so, puts all shorts at risk.
The only safe haven short thesis here would be SEC suspension and/or huge fines for The Company (Not GE nor Kalani individually) putting her at BK risk. Well, this is a quite far fetched thesis - despite the all the whining about the poor 'US $$' of the so 'poor and innocent US investors'. Reality is, that tons of other companies utilized the 'dilution into non-existence' stock market method as intended. This is normal course of business for biotech and developing stage companies.
I analyzed a few like XGTI and AMRS and both even will dilute in the future or at least couldn't exclude this risk even after killing 90% of value. Bottom line: Nothing to see here, but some little technicalities.
So whats left? A little short gamble on GE's moves for his backstop bid @ $2.75/sh, basically re-owning most if the company. Maybe buyers even short this down to accumulate below this offer, kicking out all remaining retails. The huge short interest in itself might be proof of the big bull case, which stands due to the fact that company is fully restructured and has an even healthier balance sheet than SB.
Add the sector's projected recovery here and you know where this is going towards EOY.
However .. pls bash and short ahead, I am happy trading this and loading even lower. If you have a realistic long-term short thesis, I am all ears and eyes. But again, besides the usual panic 'get out' calls, I failed to see any.
Happy trading and keep an eye on the turnaround at the end of the tunnel.
Edit: Adding the projected balance sheet done by '01'.
Today Column is as posted for 8/30 via 6-K
Tomorrow Column adds the $100M backstop proceeds as debt payment, doesn't matter for equity if used for cash otherwise.
Just watch equity and value shift towards MCAP in EV rebalancing.
Yeah, so if GE likes to strengthen his Company, he will close the rights offering on time - and if not, sabotaging himself, he would extend it .. which doesn't really makes much sense here.
The extension phrase reflects on the timing not the purchase price IMO.
Whatever, this seems to be playing with fire more and more on the shorts side the lower this gets. Fancy algos triggered the SLs after failing the breakout.
At lunch, around 1M were traded on the 12:47pm minute flash crash.
Today was the 3rd down day post 2Q17 ER and $1.99 represnts a 27.6% discount to $2.75. Recovering to offering price would give 38% gains.
yup, but there are other sources to borrow as well of course
IB shorts available for DRYS https://www.interactivebrokers.com/en/index.php?key=drys&cntry=usa&tag=&ib_entity=llc&ln=&asset=&f=4587&conf=am&amref=1
yes, shorting par excellence - GE is long on common
to perform this flash crash they had to borrow those shares on the alt-market to flush today on SSR.
Need to check tape later on, how much they actually bought up from 1.84, I assume everything up until $2.12.
Needs nerves of steel :)
PS/Edit: IB had 1.6M shorts available, now reduced to 900k
no reports about ship damage by Irma, called a local navigator w/ access to data - good.
2M flash crash to 1.84 is not just SL raid IMO
where do we get ship data, re Atlantic storm Irma?
MS adding and even doubling position is filed
and we all assume they continue to do so until they have a sizable position. The latter might be the rumor, but shy should they even bother here otherwise?
Multiple theories about them buying in early with losses exists, yes. IMO this is due to simply show that they buy regardless of news, hence avoiding insider trading suspicions.
MS is very bullish regarding shipping.
Unofficial rumor (google it) that MS sold out Heidmar, since DRYS at least partially owns Heidmar now - reason of their constant increase might be related. At least, they do increase their stake regularly here. I mumbled about this earlier in this thread.
PS/Edit: Since Heidmar is private, nobody can tell for sure.
So GE + MS + .. moving this ship up now,
GE moved from preferred all the way to common shares, also filed officially today via SC 13D and MS moves its Heidmar stake to DRYS. Fascinating. The latter probably due to politics, oil etc.
Trickling in ownership filings next days and weeks.
Morgan Stanley constantly adding, if not doubling down.
They went from 79k (RS 1:7 adjusted) on 7/10 to 158k filed 8/10, constantly adding - still a little stake.
Why would they do that, assuming they know the right timing?
Because they don't like to be scrutinized of insider trading probably, hence increasing or even doubling their stake regularly on the run-up.
Now that Kalani is dilution is done, Heidmar and GE aligned into common shares .. this should be it. Thanks to the sweet short attack we highly likely got a good entry, still have.
Popcorn.
Bipolar Share Structure and EV
As stated multiple times, current EV valuation is ridiculous low, missing the $480M EV @ $5+. How come?
Thanks to 01, he posted some statements from IR, see snippet below. Not actually news here, but the lack of company being able to confidently state they can and are willing to avoid future debt conversions might the the cause of depressed trades here in this low channel $2 - $2.50 (ignoring the $1.60 line).
So the game seems to be early investor for cheap with another risk of dilution versus buying safe post all major dilutions and risks in 2019.
It is a bipolar situation for sure and would love to read more opinions about this situation here for a proper debate.
up to challenge $3-3.15
yes, $3.10 is the next post Ichimoko support cloud after the break through, as shown in the daily chart.
$3.28/sh (see P/S Today multiples) would be a first step towards EV recovery to $389M P/S 1.5 EV/R 4 - still far below company's value. $4.26 should be minimum today @ EV $433M P/S 2 EV/R 4.5.
Of course, such recovery may not happen in just one day, but usually fundamentals have the upper hand in the end.
Mind that $143M has already been payed in via T-1/2 and up to $241M will be invested, all Cash Warrants converted at $5.30.
As of today, $2.66/sh is $119M MCAP below already invested cash and far below the total. See previously posted fundamental sheet. This is now traded below new re-capitalization, a joke!
Just to match the full re-capitalization of $240M and 63.37M OS, stock should be traded at $3.80. Since this is only for 67.24% of the company, 100% would be $5.64 per share. And look, that is roughly about the average being payed in T-1/2 offering!
Here the T-1 and T-2 investment overview again
Accumulation, Coiling Indicators ..
Obviously manipulated down on relative low volume.
Dilution is handled via recent premium offering.
Reply to one request to company is pending, whether they project this shall cover the 2019 debt payments as well. It is very much possible so.
In the latter case, there is no reason why the EV value shall not recover as projected, i.e. share price moving back to $4 - $5 range. This has been calculated earlier, taking EV value's debt to equity swap into account and so forth.
Might be the reason why DSM + Vivo went 'all in' here, at least in regards to their AMRS position.
Forgot: Ongoing BIRTV in Bejing, China ..
.. knowing China brings a constant revenue stream for Vislink.
- BIRTV, a must attend-event
- BIRTV: Booth
- BIRTV: 1.5m Newswift antenna