I got quite a reaction from folks when I said a few days ago QMC is a safe investment (despite the OTC optics). For what it’s worth, I thought I would elaborate on what I meant, how I see the moving parts fitting together. This is based on my experience building a university institute, several private companies, and creating and managing government laboratory programs.
I find myself focusing on three sets of variables that figure prominently in whether a company prospers or fails:
Management — vision, quality, honesty, capability, and ability to attract capable and talented staff
Structural framework — science and technology, IP, organization, product/services, market/clients, price-point/profit margin
Process and context — revenue and cash flow, sufficient to preclude bankruptcy, pay bills, sustain workforce; legal challenges, assaults and threats; favorable regulatory environment; competitive advantage.
Of the above, by far the greatest variability, risk and unknown is management — its skills, integrity and capacity (short of a fundamental shift in market). If something is going to upend a company, at least near term during start-up, it is probably in this set of variables. Everything else is more or less pre-set as a design parameter or can be effectively managed.
I am sure there are other variables people can point to at varying degrees of refinement. The point is when I look at key variables pertaining to QMC, I don’t see anything that is going to leap up and grab us. We know the structural framework is remarkable, like once in a generation. With Sri gone (specifically his evident greed) management may be considered a strength, specifically the integrity, quality, ability and honesty of Stephen Squires. He holds shareholders in high regard, he wants to do right by us and is not going to dilute our shares. He has attracted first class scientific and technical talent. We are well on the way to putting the predatory lenders behind us, and they probably were not an existential threat, though potentially serious.
If you are going to point to a QMC vulnerability, it is probably cash flow and whether we have sufficient funds to stay afloat while we capitalize on delivery of quantum dots to markets. I think we are well beyond the point (if there ever was one in Steve’s mind) where Steve would sacrifice our future for sake of cash flow. If we are short of operating capital he will find it without giving away the store. By now this is probably not even be an issue.
I personally don’t see anything to worry about. All I see is incredible upside, sufficient to continue to be patient, however difficult that is.
