The rational is super simple, that i used to invest in bioneutral.
This company has been valued at multiple dollars at its inceptions. The implications of its product lead o that valuation. However the market was overly optimistic as at the time they were quite a few years away from commercialization.
Now, they are the beginning of their ascent to widespread commercialization. They have signed their first distributors and gone from zero revenue when it was multiple dollars, to revenue growth of 12 times in one year.
Inversely to the growth of their company from a startup with a product with years of testing and talking to distributors ahead of them, to a company getting their product out in the marketplace and actually selling it, the stock price has deflated to close to its lowest point and hangs at a point slightly above that, with fear and uncertainty keeping it there.
however as the last run showed, the market sees a disparity here.
Of course that fear and uncertainty hold back the company from having a permanent increase in share price.
But the second that uncertainty turns to real hope as sales start to reach numbers that cant be dismissed as dismal despite being large strides forward, the share price will make another run, and probably approach a cent before coming back to a more reserved level and staying there.
Then that hope will begin its process of turning to faith as contracts come in and sales numbers have gone from "dismal" to "pretty good" to "promising".
That will spark a gradual increase in share price probably a few runs and falls etc.
At some point, perhaps this year perhaps next year, perhaps even the year after that, faith will be replaced with knowingness as it becomes abundantly clear the product is beginning to penetrate the marketplace extensively.
large contract(s) with a huge distributor, the government, hospitals etc will start to come in and revenue will reach the millions and the share price will begin to hit the .10 cent mark etc talked about and slowly go through a new version of the same cycle with new investors doubting its ability to actually become a top product in the marketplace, reach 150 million $ revenue etc.
Once that process is complete, the company could actually end up back where it started pps wise at multiple dollars. For those that either hold or buy and sell at the right times - fortunes will be made.
Of course, I could be wrong.
But you know, i predicted tesla, i predicted netflix, i predicted apple, i predicted the price of gold rising dramatically in 2002 while in high school.... So i feel good about my long term powers of seeing value and long term trends.
As for exact time frames, well that would require a crystal ball. One can get nailed by the market on the short term as it is effected heavily by fear and is generally very short sighted and yet wildly optimistic about long term prospects for short periods of time.
for instance tesla went from 180 to 120 (a price i predicted would be its turn around point) based on some ridiculous blowing out of proportion of car fires and a quarterly report that was not up to the expectations of rumor mill number crunching of vins.
One thing ive begun to notice i need to further refine is the principle of how it seems every run in price has a short term pull downward that is almost inevitable if that run is only happening based on hope and not knowing. Sell after those and rebuy when the price reaches the point it was before hope lifted the boat temporarily.
or just be lazy and buy at a low risk entry point and see whats happening every once in a while then wake up rich one day if your investment premise was correct. The motley fool way.
AI
