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The pattern of a speculative rise in the PPS as the quarterly report approaches was typical in the past. Also typical in the past was an immediate fall in the PPS following the release of the report.
Last quarter reversed that trend. The jump in PPS followed the release of the report. I expect the same thing will happen this quarter.
I also expect to hear new news, either this quarter or next. Things are heating up in the old Crucible.
Two thumbs up!
The time it takes from the inception of a new device until it hits the market is variable. With new technology, it takes considerably more than 1.75 years. E.g., CoNextions began working on their devices over five years ago and it wasn’t until this past March that they received FDA approval... and it was just this month that saw the device used in a patient. Once a new technology has gained acceptance, the time from inception to market decreases. But you already knew this.
I know the answer to your last question, but you’ll have to wait until the Q3 comes out for your answer. The good news, for you, is that you won’t have to wait another 1.75 years.
“More concrete evidence of growth” is coming. It’s just a few weeks away.
As PayMEmf has pointed out, by quoting from published remarks from 2018 and comparing them to the info they recently provided in the last Q2 report, their message has been consistent and their activity is just now starting to bear fruit.
Thanks, buddy. I appreciate the info.
Go for it, Andy!!!
CoNextions wins FDA 510(k) nod for tenodesis product. https://www.biospace.com/article/releases/conextions-inc-announces-first-patient-treated-with-coronet-soft-tissue-fixation-system-a-revolutionary-tenodesis-product/
That was back in March of this year. The first patient use was this month (as pointed out by Gamesc). This is looking good. I wonder why CoNextions hasn't updated their website? It still notes that their devices are not for sale because they are uncleared.
BTW, it's possible that Covidien’s Tri-Staple device is the volume recurring order. Just guessing.
Thanks for digging deeper, JoTu. I appreciate your effort, but I'm not certain you are correct. The CoNextions website does not mention liquidmetal at all, and none of the links you provided mentions the anvil or the method of manufacturing via molding the grooves vs CNC. Please provide a link to that info. (I'm not challenging you. I just like to keep up on medical advancements.)
The CoNextionsTR device, according to the CoNextions website, is made of stainless steel. In any case, it's not likely to be the device that LQMT is making in "volume" and on a recurring basis because at the bottom of the CoNextions website it states "Uncleared Device. Not for Sale."
I do not remember a CoNextions device having a part being described as an anvil. (But my memory is probably not as good as yours.) I do remember that Covidien’s Tri-Staple device had an anvil, and that anvil was made of Liquidmetal. https://www.liquidmetal.com/anvils/ Is it possible you have conflated the CoNextions device with the stapling product Covidien was/is making?
Rick and John were college roommates. Birds of a feather.
I like the way you think. The biodegradable magnesium pins, nails, screws and staples are going to revolutionize some orthopedic procedures, like attaching ligaments to bone, and stabilizing bone fractures, so the new CoNextions device may be replaced by Li’s magnesium. But the main product of CoNextions - the one that was once made with a very small liquidmetal part - is used to repair small torn tendons. It’s a totally different procedure, requiring stabilization of the torn ends followed by suturing... not metallic clamping.
I hate being the bearer of bad news, but that device was not the one CoNextions developed using liquidmetal. The device that was made from liquidmetal (CoNextionsTR) was used to connect tendons that were torn due to trauma. It was not a device that aided in attaching tendons to bone. What's worse, is that the device CoNextions and LQMT worked on (CoNextionsTR) is currently made of stainless steel
The management statement last quarter specifically mentioned that they were working with Yihao: not Eutectix. The prediction that Eutectix was the manufacturer for LQMT's recurring order told me more about what was in the juice he was drinking than about the accuracy of the prediction.
You make it sound so easy to “reverse engineer.” If it were that easy, no corporation or business entity would employ trade secrets. And yet many do.
This discussion began with your assertion that LQMT received next to nothing from Eontec in exchange for Eontec’s acquisition of rights to LQMT’s IP. Yet when confronted with evidence to the contrary (e.g., LQMT’s acquisition of rights to Eontec’s trade secrets, and LQMT’s rights to a trove of Eontec patents that you underestimated because you searched only one of many patent offices), you ignore the facts and go to great lengths to defend what you said, instead of just admitting you were wrong.
A more cogent approach would have been to assert that the mere entitlement to patent rights and trade secrets is no guarantee that LQMT will be able to turn said acquisition into revenues for itself. Had that been your assertion, I would have had no argument with it.
Patents are not the only means of protecting intellectual property. Both Eontec and LQMT have trade secrets as well as patents. Trade secrets are often kept as proprietary information and are not patented because a patent would reveal the formula, or process, that is being held secret. (You won't find a patent for the formula of CocaCola, but no one else has the formula or could use it if they had it.) Patents have a 20 year life. Trade secrets have no time limits.
Neither the optimism nor the pessimism will change much following the release of the Q3 data. For many, the basis for beliefs runs deeper than the “facts” that each side proudly holds up to prove their point. But in the end, we don’t need no stinkin’ facts.
I was just kidding about your Mensa membership card. In fact, I hope to become a member of Mensa (as soon as I finish the third grade, which I’ve been in for the past 65 years).
Apple was responsible for the legal fees in the prosecution of Kang. (see below)
You need to trade in your Mensa membership card for a calculator.
Everything you say is valid... many good points. The reason I think we will see $1 before the end of 2021 is because this stock is very immature. Speculation will be a large part of the stock price for several more years to come. Pricing will not follow a more rational approach, such as P:E, as the basis of its share price. Not for some time to come.
When the technology really takes off and growth approaches exponential proportions, demand could very likely outstrip supply (temporarily), because manufacturers will need time to increase capacity in relation to demand. IIRC, Lugee mentioned that Eon won’t increase capacity any more until demand warrants it.
For that reason, once we get into the burst phase (the explosion, as I referred to it), I expect rapid growth will be biphasic: an initial rocketing up during the first year or so, followed by a relatively short “stall” period as manufacturing capacity ramps up, followed by another boom cycle for a few years. By then, LQMT will have matured and rational metrics, such as the P:E, will be used as a price guideline. But that’s a few years in the future... as I see it, anyway.
Peter Lynch wrote (in Up The Street, maybe?) that you should invest in a company because you like what it’s doing and sell its stock when you no longer like what it’s doing. Sounds simple, but his advice is far from being simplistic. — Right now, I like what LQMT is doing.
Thanks for your well reasoned post. I agree with your P:E assessment, but not with your timeline. I think your timeline would be accurate if the technology grows gradually. But the technology is about to explode across many different markets, so I am expecting an initial period of very rapid growth - close to exponential growth - over the next few years, followed by a slower, sustained and more gradual growth phase thereafter. So I think we will see $1 before the end of 2021, and $2-$3 in just 2-3 years.
The technology is just now catching on in several industries. It hasn’t entered the explosive phase yet, but it’s close to it.
Thank you for posting the entire agreement. Very enlightening indeed.
Dell, you raise an interesting point about the tensions between China and the USA over the Corona virus, and how that might effect sales from China into the US.
Keep in mind that LQMT is an American company: not a Chinese company (even though its largest shareholder, CEO/Chairman is a Chinese citizen). LQMT is just one of hundreds, if not thousands, of American companies that have their products or components manufactured and/or assembled and/or packaged in China.
When Apple runs into trouble selling their made in China products here in the USA, I'll start to worry about LQMT having similar difficulties. Until then, I see no reason why the US Government would single out tiny little LQMT as a target of the USA's wrath with China over the Corona virus.
Rock on, Jrs5. You da man! (Thank you.)
Ha ha. When that slot machine pays off, you are going to be viewed as the smartest person amongst your friends and family.
Hey man, thank you for your service. SEMPER FI.
You are correct. November will be tell all.
Nice work, JoTu. AAP makes metal parts. Leader does not. AAP could be the customer. It depends on the parts in question. E.g., the shafts and ball heads referred to in your post are too large to be made out of amorphous alloys. The smaller braces that stabilize fractures and mal-alignments are not too large. But I still doubt that AAP is the customer.
Instead of looking at AAP (and Leader), if small metallic stabilization plates are the parts that LQMT is making, I'd put my money on Arthrex. Remember that Arthrex almost signed a deal with Kang, so they were interested in amorphous alloy parts. In addition, Arthrex, is a huge company compared to AAP, so Arthrex is much more likely to be in position of requiring a volume recurring order with monthly shipping. AAP? Not so much.
LQMT can use Eon's patents!!! Damn! Of course. You are correct, once more. I honestly just read that not two days ago, yet it had already slipped my mind. Thank you so much for reminding me. (And please bear with me if I forget it again in the future. There have been so many positive changes effecting LQMT that I can't keep them all straight.)
How lucky are we to have Lugee as CEO!?
Still, I'd be very surprised if Leader is the current customer. Once the Magnesium alloy pins, nails and screws have gained global acceptance, those products will be huge sellers. And I do mean HUGE! But right now, very small numbers are being used... mainly in trials. I find it difficult to believe that Leader would open a recurrent volume order with monthly shipping based on future sales... especially when they cannot know, at this time, when the Magnesium screws and nails will gain acceptance in countries other than Georgia.
Question? Given that EON and LQMT can use each other's patents, do you envision any conflicts between the two companies, in spite of the royalty arrangements that are in place. I ask because several years ago, Lugee got some flack from Eon shareholders over his acquisition of LQMT. That's when he said he would turn over his LQMT shares to Eon after LQMT was re-listed on the NASDAQ.
The question I was addressing was about Leader being the customer that has given the recurring volume order to LQMT. And that answer is NO. They are not the customer.
Like you, I also do not base my decision on one single earning report. But that is a completely different topic and has nothing to do with my posts about Leader Biomedical.
Quotes from the Eontec Q&A's:
Good info. But the Magnesium Biodegradable nails and screws are not a product of LQMT. Those are Eontec's products. Besides, as you know from the exhaustive reports you were so kind to provide us with, the Magnesium nails and screws are still in clinical trials and are now just being used in Georgia. They would hardly constitute a product that would need a recurring volume order filled every month. So, again, whatever Leader is doing at the moment, they do not fit as being LQMT's customer.
I doubt that Leader Biomedical is the customer. They are known for producing a variety of biomedical gels, putty, fillers, cements, etc.. While some of their products are useful in joint replacement surgery, as best as I can tell, Leader does not actually provide the metal components. I've asked for a copy of their latest brochure. If I'm wrong, I will report back here.
Thank you Joshuaeyu. You are a gem!
You lost me Yama. Eon/Yihao splits have nothing to do with how much revenue LQMT gets from their customer. Yihao is the main contract manufacturer for LQMT. Nothing more. Take Yihao out of the equation and substitute Eutectix. Either way, LQMT has to pay their contract manufacturer for filling the order. That expense, along with the cost of the alloy, shipping costs, etc., is passed on to the customer PLUS the profit margin charged by LQMT. None of that profit goes to Yihao or to Eontec.
Like you, I know that royalties have nothing to do with the recurring volume order. I don't know how royalties even got into this conversation. It's a totally different subject.