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.
The first thing I thought was this is a way of spreading risk and not necessarily about concentrating on the one or two markets with the highest margins. Of course it also could be both - that's just conjecture on my part.
I really like the debt advisory service in this partnership. This is an area where management is lacking. Not only have they been operating without a rolodex but they haven't had the experience, time or leverage to pursue capital efficiently.
One of the risks I've been concerned about is that they have been trying to pioneer an extremely complicated aquaculture model and raise huge sums of cash at the same time. If you've ever owned or run a company then you know just how much time and energy the operations side will suck out of you. The days aren't nearly long enough. Not only did the chances of getting better loans just go up, but a bank/agent/broker will allow management to maintain the amount of operational oversight the company needs. A big step in the right direction today, IMO.
I don't think it's concrete. These buildings have a fair amount of sub grade work for the pumps and recirculation between the oxidation ponds. "Ground and infrastructure" could refer to only grading and civil even at 100%. If we turn on the infrared wave bands it looks this way. Doesn't look like concrete to me.
But it also doesn't really matter, IMO. We know they're experiencing a cash crunch until the funding is finalized And we know they can crank these out pretty fast when everything is lined up. Once they have the funding in hand you're going to see the vertical construction go pretty quick. Right now call it whatever you like, the point is that they aren't building, otherwise you'd already see building structure and maybe even a roof.
Also, the Land Viewer portal now has (almost) real time posting of Landsat 7 and Sentinel 2. You used to have to download the individual spectrum bands and compile them in an image editing program. But now anyone can look at the satellite flyovers like you would in google maps.
https://lv.eosda.com
Whatever is driving it certainly doesn't look kosher, that's for sure. But if it were a negative event, I wouldn't have expected the shares to migrate to Merkur so quickly? The only thing I'm fairly certain of is that someone is going to have a massive tax write off.
A minor update from the Landsat-8 satellite. This is a poor image and not intended to be very informative. The Landsat-8 takes the highest resolution photos for google but they're normal flyover is lower quality than the Sentinel-2.
These are basically just blobs of color. But even with the poor resolution, my personal take is that there isn't any concrete being poured or any vertical elements being constructed yet. Sentinel-2 will make a pass in a couple days and if it's a good shot we will know more. But the weather says it will be rainy...
There will be more satellite images available in the next two months I think. The Sentinel covers the earth in 10 day cycles which is great. But the winter and spring near Shenzhen is almost always cloudy so the images don't show anything. I think 7 or the last 9 shots were cloudy (something like that). The last flyover was 4/25 but it was all clouds so on 5/5 there should be another flyover and on 5/6 it will be uploaded to the public database.
It can't stay cloudy forever. I want to see tanks.
Whoa! Ha ha. Yes, that was the SA transcript. Good catch.
I'm very sorry to waste your precious time RD. But he really did say this:
"I haven't seen a bump up in price anytime throughout this whole period, it makes me believe they are rushing back to the market to buy shares so they can return it back to us."
Now it could be just a poor choice of words. I think that's likely. Buts it's all together different as what you're saying. You don't buy shares back from the market unless you've sold them.
Ok. That's what I thought. But I have a slightly different take. It's not exactly "correct" to say that one of your lenders - someone you're still doing business with, is shorting your stock. You'd have to be crazy to come right out and say that in a conference call.
But he basically implied it. He started out saying you'd have to be stupid to do that. Then he said they'd have no way or really knowing. Then he said "I think they're rushing back to market to buy back shares". He totally walked it back.
He's basically saying that nobody's shorting the stock. But that somebody's shorting the stock.
So then why would Dan say they're rushing back to market to purchase shares so they can return them to us?
The cc language is a little cryptic.
Yes, I remember that part. He also said they wouldn't have any way of really knowing if shares were sold short. But then he said this:
So, we have been making several repayments to them and they have returned the shares each time. If they don't have those shares in hand they have five days. Okay, they have five days. I haven't seen a bump up in price anytime throughout this whole period, it makes me believe they are rushing back to the market to buy shares so they can return it back to us.
I can't add bold or italics on my phone app but that last sentence is what I had stuck in my head. I think he's saying they're covering?
Well I'm not asking you to believe me. I'm not totally married to the idea myself. Just weighing the evidence. But I thought maybe you had your own explanation (guess not). And I thought maybe we could talk about the merits of each (guess not).
I thought Dan's comments, if I understood correctly, made sense. And it dovetails with what others who have good insight have said. So it's not like I'm by myself here.
Yes. I think it's very likely. We just saw the highest average daily volume in years the week before the cc. What happened? The price was taken down to ~3.10 x 3.20. Then hundreds of thousands of shares were traded inside the spread. Then the price went...up.
How is this different? How could that be short volume? Give me a reason challe.
Give me a good reason to forget it.
No. That's already pretty clear. Whoever the buyer/seller is has the ability to name their price.
Yeah. I don't really know and I don't have a strong opinion one way or the other.
I'm just thinking back to the cc and what I thought I heard Dan say was that they were making payments to a lender and requesting their collateral shares. So it's possible (likely?) those shares were sold short and are now getting called.
I see it more as a positive that a big short could be getting unwound prior to pre-IPO financing.
Sure but you're going to want a lower price regardless of whether you're selling or covering. It's the same difference.
Why do you guys presume this is selling and not covering?
They aren't going to wait for corporate management to be complete. The roadshow will kick off next month with first pre-IPO commitments possibly in June. The corporate management and investors relations are targeted to be up and running in Q3.
They have interested parties. Strike while the iron is hot.
The color fidelity on some of these files is pretty bad so it could be concrete but I don't think so. A huge amount of time and materials are in placement of the rebar. I don't think the could have gone from a patch of sand to pouring concrete so quickly.
I will be very interested to see how quickly the contractor can scale up when they have the funding situation resolved.
A couple satellite shots from the Sentinel-2. Nothing much to comment on. The only thing I take from this is that they're continuing to prepare the site for building #3 but without the funding it's moving along at a snail's pace.
The area where building #3 goes is now a dark rectangle. Without better resolution I'm not sure what that means but I think its showing the soil freshly leveled and still wet. But that's a guess. Another thing to note is that the oxidation ponds directly below are full which means that building #1 & #2 are producing waste water. That's a good thing but also not surprising.
I'll continue to post satellite images as they become available but I suspect we won't see anything exciting until they've secured additional funding.
April 4, 2017
February, 13, 2017
I don't think it's fake but it's not all legitimate buying or selling either. It looks to me like a large hedge with multiple accounts is being used to draw the spread to certain price zones and a position is being opened up or wound down within those price zones. So it's hard to tell what's real and what's not.
Financing and contractor deal are linked to the pre-IPO. And the pre-IPO is a major step to transferring value out of this OTC cesspool. So to that extent Swede is right.
Sorry dude, the volume is not marginal. It's the second highest one week total since the dual listing. And its occurring on no news. It's also organized and consistent, i.e, not retail.
Go convince someone else.
I'm pretty sure there's some covering. I've been thinking this for a while every time price gets sticky but hearing the rumors the last couple days makes me believe the manipulation theory is true. Similar sized blocks spread over multiple days, volume coming at end of day, volume concentrated at bottoms instead of tops. That's what I would expect to see if a sophisticated investor was repeatedly taking and covering an outsized position.
Question for me is: If Mr. Danielson really is playing it both ways, how much more can squeeze out of this? He can abuse the stock forever as long as it's restricted to the OTC. But I wouldn't want to be short if the company announces a successful pre-IPO.
Yes, that's what they are.
We broke the mammoth 21 month downtrend line today so I'll book this as a good development. But yeah, need some follow through to get excited. Will post a chart tonight.
Well the demo farms aren't carbon copies of the mega farm. There's the RAS system which has been validated but it needs to be adapted to every installation. But based on the hydrology and microclimate of the area that you're building, the systems are going to need to be calibrated differently - there is a trial and error period for this that is a lot more complicated than adjusting the thermostat in your house. And then of course changes to the size and configuration of the tanks themselves introduce another variable. During the process of taking a building online there is a "commissioning" phase. For complex buildings this can take 6-12 months to get the systems dialed in and working the way you want them.
Then there's the testing of how responsive and flexible those systems can be for different species (which they recently completed) given the interplay between facility configuration and environmental variables.
Then there's the training of staff to understand the management of these systems. I'm talking about temperature and circulation of water that feed through large geothermal loops underground. They are typically fully automated systems. I don't know what SIAF is using but the ones I'm familiar with are a nightmare to program. The performance of these systems will often change from location to location and, to some extent, the time of year depending on how robust the ground loop is. The tolerance for error is lower compared to a human occupied building since going outside your set points can shock or kill your stock. We humans just put on jackets or leave the building.
Then, you have to tailor your bio security measures not just to each tank but to where it fits in the internal supply chain and the proximity to other tanks. The other company I was referring to is called "Global Blue" in Texas. They have a very large farm but they half assed the rollout and lost everything - despite the fact that it wasn't the first time they had done this. Every installation is a little unique.
And then there's the fact that SIAF is doing this during the backdrop of the Pre-IPO which is probably the single most important thing they have to get right. So I can understand if their appetite for risk seems a little low.
I'm not an expert on this stuff but I know a little. Just because you have the technology doesn't mean it just "goes". There's a lot of work that it takes to bring the operation online and to keep it running optimally.
He does but the characterization seems to be different. I don't want to belabor the point since it's not a big deal. I read it as a procedural change in how they perform RAS and I read your post as a design related problem. Maybe this is just semantics.
The reason I bring this up is that there is another company doing RAS at scale in the US - very similar to SIAF in size and technology but inferior in a few key areas. They tried to scale very quickly and due to short changing multiple steps in the transition to the new buildings, they lost their broodstock and all the shrimp in their grow out. They had to start over (which they successfully did) but it was a painful process. As far as I can tell, their problems were exactly the ones Tony just mentioned: going too fast before the training, procedure and biosecurity were fully in place.
I guess I don't understand how you go from the things that Tony mention to "tank size" as the primary issue.
Maybe. But the issues that Tony is raising: staff training, viability of the new RAS system, biosecurity - those are all legitimate issues. If you watch other companies transition to large scale RAS you'll see these exact same issues come up. Some in the United States have been disastrous. Can you imagine how bad it would be if Triway had to temporarily shut down operations at AF4? I expect that these types of risks will go down as they scale up. But right now when they're so dependent on validating operations of two buildings, the risks are magnified.
They also need to get their breeding program up and running which factors into the same operational risk equation.
Yup. I'm traveling with phone today so can't really chart anything. But eyeballing it, the down trend sits very close to $4 - close enough that price can cross over and still not be overbought.
SIAF is a trending stock. It likes to move in one direction or another for long periods of time. So by definition it responds well to traditional TA which is mostly focused on trend identification and analysis. It might not seem that way because it's so boring and thinly traded that there's often nothing to make out in the short timeframes. But trending is a good thing when you're on the right side.
Patience Individual technical indicators become a lot more interesting after a reversal, or at the very least, when the downtrend is broken. Neither of those have happened - yet.
I'll post updates when there is something to see. Most of the flyovers this time of year are overcast. Ironically, it's the rainy season that actually gets more clear days.
Ahh yes. Cognitive dissonance. The most natural folly of the investor. You could easily apply that to every third post on ihub.
Might be getting close to a short term tradable bottom. Last week ended with a firmer bid on four consecutive days. Today would make it 5.
Correct. This is site work - no possible chance that they're building vertical elements yet.
The satellite photos from Dec. 2016 still show it as a vegetated pit. Almost identical to the Google maps which are from Dec. 2015. So in the last two months they've brought heavy equipment back to the site.
There's a couple broad conclusions I'm willing to make but a lot of things that are still to be verified with the next satellite photo:
1. Usually when you bring the earth moving equipment out, that means you're committed to building the foundation because the graded earth will quickly erode if you don't get the concrete in place and you'll have to regrade. The exception is with site clearing where you're simply just removing vegetation in anticipation of trenching. But given the contours of the ponds, I don't think that's what's going on here. I think they would only bring out the equipment if they were committed to building the form work and pouring.
2. Since the foundation work is far and away the largest cost component of these buildings (they're basically giant foundation systems with a roof), they are likely confident that they have the funds to build this unit out.
I'm about 70% confident of this. Still in "wait and see" mode but it's nice to see some visual progress. The good news is that Sentinel-2 averages one flyover every 2 months. So we should get at least one satellite update before the Q1 report.
Yes, Google relies of Landsat-8 for all their high resolution maps. But there are many more satellites out there. Finding them can be a pain because data access generally isn't user friendly. But the Sentinel-2 is available on several map services and refreshes reasonably often.