re: Interim report
Having just read through the report it's my opinion that GE's investment in Arcam is positive in that GE is able to support the industrialization of Arcam's technology during a challenging period.
Although Arcam has the only technology that can produce parts for low pressure TiAl turbine blades with the unique microstructure, and the resulting mechanical properties needed for that task, and they appear to have the only technology that can generate objects with site specific microstructure (the Holy Grail of 3D printing), that technology moat doesn't necessarily mean success. Promoting the technology, and research on the technology, on the scale that GE and Avio Areo have, while proving that the technology is practical, is just what Arcam needs.
Anyone still hesitant about the rights issue with regard to us little ones losing percentages should consider the following example that illustrates how percentages will behave before and after shares have been sold. Assume, for the sake of simplicity, that GE owns 75% of outstanding shares, that Elliot and us little ones own the remaining 25%, and that the number of outstanding shares is 1000 (I know, the number is much greater but this scales up and I'm too lazy for those calculations now.)
So assuming that case, before the rights issue GE owns 750 shares, and we own 250. After the rights issue GE would own 750 + (.2)(750) = 900 shares and we would own 250 + (.2)(250) = 300 shares. So then the total number of outstanding shares is 900 + 300 = 1200.
Then, after the share issue GE would own (900/1200) * 100 = 75% and Elliot and the little ones would own (300/1200)*100 = 25%, so the percentages remain the same.
You can generalize this using variables like x, y, and z to show it works for any number of shares outstanding.
This works as long as all of us take full advantage of the share issue, so, to me, this is not so much gambling as it is the prisoner's dilemma. I'm assuming that we're all rational individuals that understand that participating in the share issue is beneficial. That doesn't mean that we will all cooperate. I just hope we all do. After all, the "prison" of holding a good investment for awhile for good returns isn't as bad as putting our gains to risk.
