Blue Sphere Corp (BLSP)

[Tomix]

Some selling is expected in the coming 1-2 months

There is an israeli site managed by Dr. Yinon Arieli,
Who display his portfolio so other can track it (he mainly focus on spin-off stocks)

His english site is https://longrunplan.com/author/yinon/page/9/
(it is a different portfolio)

Any way , in the hebrew version he notify all subscribers that he is going to sell BLSP . I translated the hebrew article using google translate.

I also asked CO about what Yinon wrote ,
and the answer was that he is WRONG

I think he have around 200 subscribes , I guess the total BLSP stock are around
500-2000...but it is just an eductaed guess

Any way this it the article:



I decided to sell all the holdings in the BLUESPHERE (not much left of it unfortunately ...). Because the stock is a low-negotiable one and I do not want the group's sales pressure to affect the share, I will actually carry out the sale in only two months (during the last week of August). This will be the case for anyone of you who wants to sell the position a time to close it gradually, without pressure. In two months, when the stock is actually sold, I will update the site (until then it will appear in the "strong" rating).

Why sell now?

In fact, it may be a bad timing - the company is raising money for a Nasdaq rally, and the major projects in the US are already going to start generating cash. The share is also at a low. On the other hand, the numbers in the company's reports simply do not reflect an improvement in activity. Where are the profits from facilities in Italy? Why are there so many delays in connecting the US facilities to electricity? If the situation improves, why does the company continue to issue shares on a quarterly basis and dilute investors at prices below market prices? continue?…

Moreover, even in the current financing round, which was supposed to be $ 15 million, the company is going to raise only $ 4.5 million (according to the published prospectus) at a share price of $ 3. In addition, the investors will receive an option with an exercise price of $ 3.30, exercisable over the next five years, a real gift. These are not recruitment terms that a company with growth potential issues. This indicates that there was no real demand for the company's shares (and the signing of the offering is a recognized underwriter).

True, such a move takes time, but in view of the continued decline in the share price, it is already close to not meeting the floor price that allows trading on the main stock exchange. Capital consolidation can always be done to raise the price artificially, but it will not increase the company's market value, which will remain below the lower limit, and then it will fail in this criterion. In short, if the share does not rise significantly in the foreseeable future, it will not be able to hold on to Nasdaq for a long time.

Is there an upside in pricing?

Following the current issue, the company will have 5.1 million shares (fully diluted). At a price of $ 3 per share, this reflects a market value of $ 15.3 million, and if we add another $ 10 million of debt, we will receive an Enterprise Value of $ 25.3 million. On paper, the company is expected to generate an EBITDA of at least $ 8 million a year in the next few years. This means EV / EBITDA multiplier of 2.5. Even if we take only the EBITDA of facilities in Italy - about $ 4.5 million a year - we get a multiple of 5.6. Cheap for a company with growth potential like that of Belseper.

But, which is the main thing, this EBITDA is probably on paper right now. The factories in Italy are already supposed to generate operating profit, but it does not appear in the reports. This is explained by Belposer's accounting method, which requires it to present profit only in the bottom line of the profit and loss statement, not in operating profit. Even if this is true (and I do not understand why it is reported in such a way), how exactly did new investors know about it? You guessed it, they do not (unless they read the board report in depth, but few do it), so it probably will not be reflected in the stock price in the foreseeable future.

Bottom line: The main problem of the blue sphere is the lack of credibility and inefficiency of management. It's not a one-time thing but an amateurish behavior over a long period of time. At the moment, at least, I do not see the company getting better and ending its erroneous practice of taking high interest rates, raising more shares at lower market prices, and diluting investors. In this case, I do not think it is logical to keep the share (of course you can think otherwise). Despite the unfortunate loss of the share, you have to know how to part.

I've already had investments that have suffered losses and probably will, but at least it's my worst investment ever. I apologize that I introduced you to society. Its field of activity is very promising, but its management simply does not work for the benefit of investors. That's why the stock has lost most of its value since it was acquired, and that is the main reason I sell (as mentioned, the actual sale will be in about two months, to allow time for a leisurely sale of any of you who wants to sell)