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It's pretty obvious that the prospectus would hit the stock. Seriously you're still speculating on surprise upside announcements? They already announced the impact of Golden Mills steady state once the last husker is installed. They claim in the prospectus that it will help double Q4 revs (4mm). This is the husker you accused them of already installing though they referenced it in the last call.
40mm run rate? Assuming they have a run rate of 5-10mm EBITDA at those levels? What would you give them. 1.5x sales? 7x EV/EBITDA?
Maybe 1.75 after the raise. No point in asking me though. Clearly I was very wrong, just less enthusiastically so along the way.
1.5 or so would be my guess once it stabilizes. Hard to know where they price the offering, but CG, DG will be participating. We'll see if they are able to build a quality book given the constant missteps and false promises.
They said the last piece would be December (the second husker). That hasn't changed.
The CIO at Continental Grain, Ari Gendason has been on the board since 2016. He bought shares personally although in small amounts recently.
How did they project 20mm from Golden Mills in 2019 when Q1 is 4mm post season-bottlenecking? One of the more confusing situations I’ve seen, but yeah when I read the prospectus it’s hard to spin that positively. You have to think they’ve already shopped the prospectus given the price decline.
Insider activity wildly bullish and execution has been awful
Meaning CG was good with the amount they had. You gotta think/hope that they've been shopping the prospectus for the last few weeks, which has caused the sell off down to $2. Would guess it's already placed at $2. If not and CG doesn't add then no bueno.
Pretty crazy that they were adding as recently as September (insiders and CG).
Why wouldn't they just have done another private placement vs. issuing the prospectus? At this point it wouldn't take much to just take it private between Dillon, DG, and Continental Grain.
Nobody will buy shares based on speculation that the new partner is a hot property. A few months ago you both speculated Beyond Meat/Impossible. That clearly didn't help. Suggesting the partner is Chewy and then posting articles on Chewy won't help either.
But they bought the revenue. It's not like they created it organically. They shouldn't be rewarded for that unless they purchased it cheap (they didn't considering the issues integrating), or they improve the value of the property with smart capex. The jury's still out on that one. Still seems oversold, but every time I think I see signs of bottoming it gets hit again.
Can speculate non-stop about who the new customer is and what the application is. What's important is that they execute and start delivering on the numbers they've promised. If they can get to a positive EBITDA run rate after the second husker is installed in December (Q4 will still be a loss), I think the investment community will respond positively.
They've pushed out the goal posts a few times, but they've been making progress. People are just losing patience at this point.
not short sellers - there's essentially zero short interest in the name. Yesterday could have been the end of the unwind. We'll see.
Looks like a decent sized exit now. Some of the larger holders have had tough years, so it could be redemption related. Will see if a buyer comes in at these levels.
CG has added every quarter (December 1st week, March first week, end of may/beginning of June, end of August/beginning of September. Would expect them to be adding this week or next unless they have material insider information or have lost some enthusiasm for the investment. Really it wouldn't take much for them to take it private.
Lot of potential with poor execution in the last year.
was thinking the same. Lot of effort to get sign off on 20%+ ownership to stop buying here. Last quarter's cc was frustrating but not unexpected.
You're right - I went over the transcript again. Could eventually exceed 100mm lbs in the prepared remarks. In Q&A clarified it could get to between 200m and 300mm lbs for them.
That's a pretty big range from prepared remarks to Q&A. You'd think they'd have a better handle on estimates of market size, but I agree that implies 100mm is not the ceiling at least.
Here's an example of why I've said your comments are unrealistic.
Re: 100,000,000 product - Yes he stated EVENTUAL market demand could reach that level. Could reach implies high end of estimates, second eventual implies it will take time to build the market, third you're assuming they own the entire market. If they are keeping it quiet to avoid competition then you can't assume they will own the market.
Re: 75mm in 2020. Street estimates are at 27mm for 2020 and you're getting 75mm? Are street estimates wrong all the time? Yes. Is 27mm low, also yes. Are they low by a factor of 3. Probably not.
Reading your comments as a third party, they just come off extremely biased. If anything constant pumping probably keeps informed investors away. Measured commentary is much more helpful. I'm bullish despite their missteps because I think they're doing the right things for one year out. They did botch the Golden Mills acquisition through weak due diligence and probably didn't have the expertise in grain operations that they needed. Happy they now have it.
Please stop the incessant pumping and the calls for .50c. The $5 calls and .50c calls are not realistic currently.
This is a 2.50-3.00 stock until they execute. If they can get back to 10mm a quarter and 2mm EBITDA they are fairly priced at 10x EV/EBITDA. That's just the steady state of Golden Mills/MGI and existing operations.
With any actual growth they've been citing, revenues should be able to get to 15mm a quarter fairly easily with a larger percentage dropping to the bottom line.
I would say that's probably 3 quarters out, so assuming they don't keep sh1tting the bed I do think we trend toward the $5/share value. I would guess profitability at end of Q1, with some ramp in Q2. Q4 will likely be a smaller loss, and hopefully they can finally provide some encouraging guidance.
Could have been issues as part of Golden Mills acquisition. Shares in escrow were retired as part of the settlement.
That's way higher than your 50c estimate. So things improved?
So they didn't actually sustain revenue. Luckily I think Continental Grain is still buying. They no longer have the 20% cap, and I think they'll just continue to buy (after the quiet period) under $3.
Why should you get credit for buying revenue? When purchased their pr said should add 20mm in revenue in 2019. 3 quarters in they are at 17mm. 2018 pre-acquisition they did 13mm or so. It's added 8mm or so in 3 quarters. Sure they've had a hiccup with integrating and a bad contract, but that's on them. They should get zero credit for Golden Mills to date. Long term I think it works, short term not good.
It's not organic revenue. They bought that revenue. Once they use the stable supply to create new revenue and leverage existing clients for new products, then they deserve recognition.
But to be clear you called 50c a month ago at 2.41. It's 15% higher in a month from your "I'll be back in a year" comment.
Has it been a year? Are you the I told you so guy? You're a hit at parties.
Over promised and under delivered. Yes, you're supposed to look 6 months ahead, but when they kick the can 6/12 months people lose faith in the 6 months. Here's the thing... IF they can make it work it's a multi-bagger. It's got great skew with management that hasn't executed. Size appropriately.
The top line miss was expected, but there's no excuse for increasing SG&A to the extent they did. Also thought they planned to complete the bad contract from Golden Mills acquisition in September. Even if they waited until October post de-bottlenecking why isn't it fully complete?
10k shares at the ask taken out (2.74/2.75). Poised to move, doesn't need mich
Rule #2 - Load the boat when the random guy calls for down 75%... actually that’s rule #1
2.5546 is the official closing price. The last trade doesn't print because it was < 100 shares.
20% ownership cap on Continental Grain removed. They are now free to buy and are purchasing again in the open market.
Somebody is taking out blocks at the ask and seems impatient. 6k at 2.64 and 8k at 2.84. Consistently sweeping asks.
they can allow Continental to go above 20% with board approval. I think that's the most likely scenario. DG Capital is large here as well. It would likely be via convertible debt (dilution at some point).
I actually think he was pushed out. He didn't have the experience and either botched his forecasts or was involved in the Golden Mills debacle. If he saw it coming he wouldn't have exercised all his options on 6/27. Unless he wanted to pay higher taxes vs. waiting for the imminent collapse he saw coming.
Thank you - hadn't seen that. Wasn't picked up by Bloomberg for some reason.
Backlog still decreasing which is concerning. This is screaming for a leveraged buyout even after last quarter though. Check out their real estate too. The Spitz building is worth 5mm and they have a mortgage balance of 1.5mm. Lot of things you can do here. They are not using capital efficiently.
sure - price it for a zero, but it has that skew. It makes sense if you size it appropriately.
Thanks for putting in the time to share your thoughts - much appreciated
Last conference call didn't make it look good: "As it relates to our pending HMA legal matters, there's been no material change for several quarters. We continue to revalue the estimated liabilities covered by the CVRs on a quarterly basis. Our current estimate, including probable legal fees, continues to reflect that there will be no payment to the CVR holders."