I actually invested this years ROTH IRA money in WARM in the last week or so. I decided to do this because
- It would be stupid not to invest yearly ROTH IRA allowance into something.
- The general market seems a bit pricy to me.
- Its a roth so if it pops I can take short term profit without tax concerns.
I decided to pull the trigger on the purchase (I have until April to invest the Roth $$) even though I know its possible the price could dip in the near term if the company decides it needs $$ to complete the demo truck (we still have the mystery of why the 0.06 floor was removed!) But I also think news also could drop at any time that the stock actually reacts to, or that the market has a delayed reaction to the recent news (seen this before, don't understand it, but have seen it). Given that I decided the current price range was a reasonable entry point.
I feel things look brighter and more tangible in terms of revenue for WARM than ever before.
- They have an 8-K documented contract for a major order (Hopefully the recent order will also result in an 8-K filing...but their running out of time for that).
- Their engineering development team is expanding which reflects more support from outside engineering firms and proof of internal dollars going to product not debt payment. I’m referring to the engineering teams in PA and CO that are working on the final product. The expansion of contractors working with them and the decision to spread out resources indicates a business plan is being executed and followed.
- Change from Inverom to Czero. The latter's products looks more sophisticated and they seem better able to handle large orders.
My internal reasoning for lack of domestic orders is up in the air. Is it because there is little interest or because they don’t have a completed product. Until they have a final product I believe its possible its because of the latter. I think having a Tesla would be cool, but I am not so interested that I’m going to make the effort to get on their wait list. But if I could go to a dealer today and test drive one and then buy it next week and take it home then, I might end up doing that. I think it is unusual to have a product that people what to buy before they can see and mess with it in its final, completed state.
I'm also asking myself why did the Mexico customers feel the need to enter a contract before the final product was complete. Barring out collusion to mislead investors (I really don’t think that is the case) to me it means they are so interested in this product and want it quickly that they are willing to commit to getting in line now for a set number of units to ensure they are at the front of the line. That’s the only rationalization I can come up with on why they just wouldn’t wait 60 days, see the final demo and then sign a contract.
Yesterday was one of the first days in a long time I can recall where sellers didn’t push the stock down to unload a bunch in the 0.06s. Lets hope that holds today. I’m not worried about a few shares being sold (MMs have a job to do), but a 400,000+ volume day below 0.07 is someone wanting out or needing $$. I say that because I don't think many investors have stock in hand that they paid less than 0.07 for. Those who bought in last summer below 0.05 are likely already out or long-term investors. While the stock went below 0.05 this year not that many shares were traded there (maybe 1 million, compared to tens of millions last summer)
Near-term news (these should all be announced by Feb) on the horizon that forced me to go ahead and invest the Roth now rather than wait...
- improved 80KVA product completed and ready to deliver
- new 125 kVA design completed and ready to deliver
- deliver of demo truck to first order from farmers union (this won't be real revenue until they approve the truck which could be early Apr)
- deliver of first truck to Craftsmen (this will result in real revenue)
The one bad feeling I have is the 0.06 limit on the BellRidge deal being removed. The explanation provided by Hassett did not address why the limit was removed. There is a reason they went to the trouble to remove it from the agreement, and the reason has to be that Hassett feels (or felt..it could be past tense) it may be necessary for him to decide to use the agreement below 0.06. Sure it will be because he feels its in his (and thus the stockholders) best interest. But it also means the price would drop below 0.06. That possibility existing is not something existing stockholders want to hear, and its a disincentive to new investors. That is the reality whether he likes it or not. But the clock is ticking on that happening before they finish the product. So I decided to go ahead and plop down this year's Roth dollars.
