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.
FCEL has:
(i) Natural monopoly due to patents. Check.
(ii) Need for patented technology. Check.
(iii) Draconian terms on financing. Check.
I need good information about probabilities for financial success. Have been burned bad by having i, ii, and iii. That doesn't mean that will happen again. Example: ESLR due to (I think) Lehmann financing before 2007 crash.
Best success and best experience have been when a company had i and ii with more decent financials. Example: AMAVF
Would like an example of a company's success while dealing with i, ii, and iii.
Re: Open-source EBM
Interesting. I'll try and keep up with this.
re: GE reset
I would say that 2019 and 2020 are reset years. They have 25 billion in debt that matures in 2019 and 2020. There's a deal in the books to sell GE's Biopharma group for at least 20 billion, so that evens the balance sheets up a bit. I'm sure there's more that they are doing to steer GE into a more profitable structure, but I'm short on details there.
Opening oneself to large rewards or failures defines risk and distributing the risk reduces the chance of catastrophe, so, I say, if you like the reward of having found that 10 bagger, invest in several companies like GE that have something disruptive for the future. GE, BB, ATI, CLNE, and WPRT come to mind right now. GE's aerospace, BB's software, ATI's energy saving titanium processing and special metals offerings, CLNE's net zero natural gas, and WPRT's natural gas diesel engine technology.
I'm still not invested in GE because I'm not sure this is the time to invest in them. I am invested in the other companies listed.
Yes, I got the cash. Thank you for everything you've done, Charlie!
I got $38.8695 a share but paid a $38.00 reorganization fee. ?
I've learned my lesson about discount brokers, in this case, Scottrade swallowed by Ameritrade. They're fine for U.S. stocks but not pinksheet and so on. I missed out earlier on AMAVF's stock enhancement (forgot the details) due to, at that time, Scottrade's lack of a foreign desk.
Re: Is there anyone who still hasn't been cashed-out?
I have not been cashed out.
RE: Ameritrade, same problem.
Thank you!
Ameritrade, same problem. They are a discount broker and do not have an "international desk." I would like to have any information you may have about contacting the relevant personnel.
Motivations for selling at 28ish.
Let's say you're over-invested in Arcam, meaning, you don't have a revenue stream that's large enough to pay the bills. If cornered in such a way, wouldn't anyone sell? Profound ignorance of the situation at hand could be a reason shares have sold at such a low price too.
The bid spread is enormous for AMAVF, $28 for the bid, $38 for the ask price, so I wouldn't put too much importance on the recent low priced sells.
That's the sorting that I'm talking about. I think it's best to wait.
I confess that in the blush of the new year I had some money in them, but the $6 billion write off was cause for me selling all.
re: value of additive to GE
I'll add that I'll know that GE's end is imminent if they decide to sell their additive division.
I'm not invested yet but I'm thinking of GE as an investment. I'm not especially worried about cost basis and timing. I believe that additive manufacturing will grow at an exponential rate and the added value from that should dwarf any perceived losses due to bad timing, but I am waiting until management sorts things more.
I just wish I knew what "computer, aboutir" meant.
re: reasons for holding out
I would say you did have evidence that GE might consider a greater price. Arcam's technology is truly disruptive to engineering, and to productivity. There hasn't been a profound gain, nor promise of a profound productivity gain for some decades now unless you count computers. Anyway, I believe the benefits from the technology are huge.
I found this board in the nether regions of Motley Fool discussion boards after a long night of frustrations trying to find out anything about Arcam. So, I'm beginning to think you're right, they're selling out of fear because they know little. What is it someone said? Buy into fear, sell into greed? One side is doing the opposite, and I feel sorry for them. It looks to me that there are single trade volumes around 800 shares or so.
A reminder, Magnus Rene said that the offer price will most likely be in the neighborhood of 345 Sek. I'm not confident that GE is in such a generous mood these days so although Arcam shares are worth more I wouldn't be surprised to see GE take a hardline approach to that price. The scattered shares being sold here in US boards should not matter during negotiations.
re: Arcam buyout
I wrote to Magnus Rene a couple of months ago and he responded that the redemption process will begin after January 26, that it will take 6 to 12 months, and that the buyout price will most likely be 345 Sek, or $42.61 at today's exchange rate.
So, I'm amazed that Arcam shares are trading at these recent prices. Even if you factor in the market correction and GE's not so comfortable situation, it doesn't make sense.
If you're interested in buying more, I would check out any "own by date" issues that there might be. I would also look over Swedish and U.S. laws concerning the buyout. So far, it seems share owners are protected by comments I've seen here but when you're invested I think it pays to look over things yourself.
re: trading Arcam
Wild guess, they're desperate to sell during this correction so they can take advantage of discounted stocks. I myself chose to sell my shares in Arcam after the 90% announcement from GE because I'm not confident GE is in a very generous mood right now. Don't get me wrong, if you have shares at this point, I would not sell and wait for the arbitration!
All the same, if trading is suspended on the Nordic Nasdaq, I don't know how it would be allowed anywhere.
re: 41% drop
Don't understand that. Trading in Arcam was supposed to stop on January 26, right?!
Delisting and compulsory buyout
re: buyout notification
Have you contacted Magnus Rene? One would think he wouldn't have time for it, but he's responded to emails and phone calls in regard to the share offering and the buyout.
Buy SLM Solutions?
I wasn't able to find much about this quickly. It appears some of the 2017 sales were moved to 2018. Seems I remember that although sales are good that profits aren't so good yet, but promising.
SLM Solutions cuts FY 2017 outlook
SLM Solutions Sees 2018 Sales Rising To 125 Mln Euros
Maybe this is best for the 3D/Additive board that Charlie moderates? Also, for comparison, see Charlie's post #48 from last year on that board. SLM is clearly growing but I don't think they are profitable yet.
Could GE be dropped from the Dow? I want to invest in them but I'm waiting for all of this to be sorted, this is, when their 3D division going in full stride without the uncertainties posed from dissolution and SEC investigations.
Could G.E. Be Dropped From the Dow?
Arcam's developments will fundamentally change manufacturing due to design freedom, quality, control of microstructure even site specific microstructure (see post 6333), and productivity. To say more about productivity, major changes in productivity came with the industrial revolution, electricity, and computers. Now a major change is arriving with 3D manufacturing in high margin areas. So, with Arcam's technology GE has a leg up on everyone, protected by a technological moat, and the most meaningful boost to productivity since at least computers.
GE is huge, their problems seem huge (we'll see soon), but their AM manufacturing potential is larger than all of this in the long run. Since they ended up with Arcam, I'm glad they are really putting a priority on developing this.
I suspect, if nothing crazy happens in the world, that GE will come to be recognized as a kind of, what can I say, cigar-butt growth company(?) kind of like Corning (GLW) except GE is more than 5 times larger than GLW. Like a growth company, they're doing something revolutionary; like a cigar butt, it's been smoked and thrown out into the street. GE- metal additive manufacturing, GLW- Gorilla glass and much more.
Still wish Arcam was able to stand on their own. Oh well.
Thanks Charlie, but now the wilderness.
Charlie Colton, thanks for a most enjoyable journey into this investment, but now it seems I'm cast out into the wilderness. I kinda like investments with little downside like Arcam.
As much as I like GE's investment in 3D, so much so that I am invested, this will be a year of restructuring for them. I'm invested because I believe so much in the technology they now own, but I prefer to wait before going "all in" until they submit their quarterly report. As much as I like Immelt, it appears that under his guidance, financial reports appeared to be on the creative side. Flannery has clearly put a priority on 3D, good, but I'm expecting a bit of a hitch in their financial report. Anyone know more?
On the other hand, there's companies like Honeywell (HO), and Allegheny Technologies Incorporated (ATI). Honeywell may not own the 3D technology that GE does, but they are involved and their finances are in far better shape. Allegheny appears to have gone through much of it's metamorphosis this year, from primarily sheet metal production to now, including advanced metallurgical powders. In regard to the latter, they are currently in a joint venture with GE.
3d-printing-plane-parts-it-s-happening-today
Metal 3D Advances with Darpa, Sigma Labs, and Honeywell
Why is nobody talking about ATI
re: GE's 95% ownership
I'm not too keen on gaming this situation. They will have, by Swedish law, what it takes to complete a squeeze out. It's not clear to me what percentage ownership allows a squeeze out in the states. In Delaware it appears to be 90%. GE's headquarters are in Boston.
I doubt it will be a freeze out but with GE cornered a bit on covering dividends I'm betting they're not in such a generous mood. They are expected to request that Arcam shares be delisted.
Why General Electric Company Stock Slumped 9.3% in November
GE-Arcam, a more complete story.
GE looks to complete acquisition of Swedish 3D-printing company
I'm getting different prices out there, so look around before selling if that's what you're going to do.
I don't know if this is the end, really. They can buy out the rest at $41.44, or another price. They have complete control.
If this is the end, I'll also really miss this group.
GE's valuation comes mostly from their aviation and healthcare divisions, according to Ben Levisohn-
GE: Do the Math.
I'm sure GE is aware of their own valuation and which divisions contribute the most. That means that, with their majority ownership of Arcam, they really are evaluating Arcam's performance closely.
I don't know the mechanisms by which GE might be manipulating Arcam's management or board. I think it's possible they want a CEO that has communication skills that appeal to a broader base. Magnus Rene has a Master's of Science degree in electrical engineering, and having personally spoken to him (about the share debacle and a little technology), he spoke like a member of the EE "tribe," not a member of the CEO tribe; he seemed immersed in the company and technology but not especially eager to articulate much that would appeal to a broader base.
I don't mean that in a negative sense because the results under his guidance have been stellar, especially research-wise, meaning, I'm not at all confident that anyone else would have been able guide the development of EBM as well as Rene has, at Arcam's stage of development under Rene, when research was so important.
My wild, low confidence, guess is that GE will want a manager from inside that comes from aviation or healthcare.
Looks like I'm part of the 1.8%.
re: 2011 - 2015 multi-year trend
Just did a quadratic regression on the data for net sales and operating profit for the years 2011-2015. My simplifying assumption is that data from 2011-2015 will lead to a half decent model for predicting what lies ahead, but I'm not making that assumption with the most confidence because of the data from 2016 and 2017. Maybe we could say that with my assumption we can reasonably predict Arcam's future net sales and operating profit trends after the GE-Arcam transition has matured.
Net sales = 96.5 * 1.53 ^ x , where x is in years. Use x = 0 for 2011, x = 1 for 2012, etc. The correlation coefficient was r = 0.989, about as close as you can get to the ideal number, 1. Note that you will not get initial sales of 107.7 when you calculate this with x = 0 since we're fitting 5 data points to an exponential curve. The same will go for the equation for operating profit.
Operating profit = 5.68 * 1.68 ^ x. Use x as you did above to represent years. The correlation coefficient was r = 0.95 which is pretty damn good for a fit.
You might ask questions about doubling time, i.e., from any point in time how much time will elapse before net sales or operating profit double.
For net sales doubling time is about 1.6 years. For operating profit doubling time is about 1.3 years. That's a quick calculation, but ya gotta know a little about logarithms, done by solving the following equations for x-
2NS = NS * 1.53 ^ x , where 2NS represents a doubling of net sales.
and
2OP = OP * 1.68 ^ x , where 2OP represents a doubling of operating profit.
re: Can Arcam meet demand?
Good point, and I think it's very likely that we're seeing a share offering to fund an expansion for that very reason, however, I haven't looked at nor analyzed their production numbers.
re: Why are manufacturers still hesitant to buy Arcam machines?
I've read about bulk buys of 70 SLM Solutions machines so I'm asking the same question, but maybe we should ask, does laser additive have an advantage in regard to producing interchangeable parts, or is there an automation advantage?
Laser does not have the capabilities that powder EBM has in terms of microstructure, mechanical properties, and dimensional stability after leaving the build chamber. On the other hand, (sit down, I'm going to use that word again), how much of what is involved in an EBM build is art? That is, two individuals with the same training can get different results in a build. This comes from somewhere way back in my reading, from chasing down about every video and every paper written by Jack Beuth, and others, where it was said that about 6 months of training was required to run an Arcam machine, and at that time there was concern about how to document an EBM or LBM manufactured part especially for aviation authorities. An example given of the range of outcomes from machine operators was that there was one individual (of legend?) that could take an Arcam machine and print a part with a smooth surface.
Industrializing EBM is about the automated manufacture of interchangeable parts, parts with standardized dimensions and properties guided by computer algorithm. That's pretty clear from looking at GE's website.
That's not so easy. It took about a century of work, and war, to generate interchangeable parts on a large scale starting with Jean-Baptiste Vaquette de Gribeauval around 1760 pretty much suggesting it. In 1801, Eli Whitney demonstrated interchangeable parts by disassembling 10 guns, mixing the parts, then assembling them in front of congress. In my opinion, real proof that it was practical came with the manufacture of interchangeable parts for rail transportation. Source: Wikipedia
So, my guess at this point is, how does one justify a machine that costs a half million to a million and takes 6 months to train the individuals to run it? Think of taking that idea to a board meeting and arguing for many machines, a manufacturing facility, and maybe a campus.
But Avio Areo has proven the concept of using Arcam machines. Why aren't we hearing about several others engaging the technology on this scale?
Is it easier to run a SLM Solutions or Concept Laser machine than an Arcam? So, it's easier to suggest buying 70 SLM Solutions machines than 70 Arcams?
Or, does one not need as many Arcam machines. Are Arcams more productive? Does one Arcam do the job of 10 SLMs?
They are not letting me sell the subscription rights, nor buying shares in the latest offering. Are you saying that etrade will allow that?
No? Yes. Trading in subscription rights is from 25 October till 7 November.
re: Schwab, Scottrade
At least Schwab entertains a transaction. The fee might be $100, but you're paying for someone or a group to read, understand, and carry through with protocol.
The individual I spoke with at Scottrade, a discount broker, used Yahoo as a reference! I guffawed. He deserved it. I then gave my discourse on referring to original sources, please, me with emails and prospectus at hand. He then called for assistance. A half hour later, still no progress and likely never will be.
Suggestions? Trading in Arcam rights
Just got off the phone with Scottrade armed with letters from both Carnegie Bank in Sweden with the actual 72 page prospectus attached, and, yes, Magnus Renee's email. (He is the contact listed on the Nordic Nasdaq site. I would've thought the CFO would be.) Scottrade has no mechanism by which one can trade in rights issues, and it doesn't look like they're going to create one. There is no way to buy shares in the rights issue.
AMAVF is an ORD listing at Scottrade. Their link to International Investing has the following-
re: little ones in the US
I just received a reply straight from Carnegie Bank in Sweden, the ones that underwrote the share offering and should be most familiar with the legal in's and out's. Little people of US citizenship can participate if and only if a narrow set of conditions are satisfied. Everyone from Sweden uses the word "bank" in a way that seems to include our use of "broker," so far. I know little about how these institutions work, even less about translations between Swedish and English.
Still following leads. Nothing so far but I'll continue to update. If what Aef says is true, I might be out of luck as I'm working with Scottrade. We'll see.
re: those in the US cannot exercise the subscription?
Not necessarily. It means that the shares won't be publicly offered in the United States. It is strongly suggested that anyone interested in pursuing the "Rights Issue" should contact the bank that is underwriting the share offering. That appears to be Carnegie bank in Sweden, Carnegie. A link for contacting them is at the bottom of the page.
Subscription rights
I have it on good authority that one should contact the bank that's underwriting the Rights Issue. I'm barely into this now so I know little.
Carnegie
re: The Link
Somebody at Schwab is off their rocker. Said individual's head is so far up a dark space that they are in need of a proctologist and a good scrubbing if they're to be accepted in the company of friends ever again. Said head would roll except congress is protecting financial institutions.
Let's see, the link-
Arcam resolves on a preferential rights issue of approximately MSEK 986
I experimented with buying said shares. No go. The symbol that showed up at Scottrade was AABRT9# but no activity is allowed. Like you, I have the same number of AABRT9# as I have of AMAVF.
The language of the prospectus is sobering, a bit like reading the Mason's book that warns that anyone reading their secrets will have their hearts and liver's plucked out by ravens, or something of the sort.
See my post # 6184 for a link to the prospectus, but I've asked Charlie to erase it (I can't see how I can) because I'm unsure that it's legal for me to provide a link!
Most curious, all of this. The math says that ALL of us have to elect to buy to use up all of the 4 million + shares. The underwriter should want all shares to be sold.
I'm not to the point of accusing GE and others of conspiring to lock out so many because I've seen, from the inside, how board intent and actions can be thwarted by legal problems that weren't foreseen.
A reminder, even if GE were somehow able to manipulate the rights issue and buy all 4 + million, they end up owning somewhat less than 80% of shares outstanding. The question is, does that mean that Elliot ends up with less than 10%? The uncomfortable answer seems to be yes but I'm not certain. I don't know precisely what proportion Elliot owns.
re: subscription rights, Schwab
You read Schwab right but Schwab got it wrong. Also, Arcam's language is consistent with offering a total of 4,109,286 ordinary shares when they say that 5 subscription rights allows one to buy 1 new ordinary share. The original notice reads-
re: Arcam prospectus