RE:FMC dealTcheck, post below was Nov 20 2016 when NMX signed the deal with FMC....
At the time I posted my red flag you idiots jumped on me (especially electricguy) saying it's the best deal ever...
well, was I right?
are they still dealing with that F'UP? did it cost NMX 20 million in unnecessary fees and interest?
I can go on and on about every deal NMX made and my posts about the deals at that time....
EVERY single post of mine turned out to be TRUE regardless how many of you Wabouchians bashed me for it instead of debating the essence of the post....
Do I feel sorry for my bashers? ...NOPE!
I do feel sory for some innocent bystanders that chose to listen to the PUMPERS (Anon, Takeactionnow, Tiger etc)
Calgary_AB wrote: I think the reason this deal didn't make a splash is because FMC is also a Lithium producer, therefore NMX will not capitalize on getting the best margin possible...NMX just became a wholesaler, actually worse than a wholesaler.
I would be careful with deals like that, depends how the contract reads, was it published yet?
is NMX going to make any profit at the end of the day?
Simple explanation:
case 1. - NMX signs a deal with battery manufacturer:
- cost to produce lithium = $100
- sell to baterry factory = $150
NMX Profit = $50
case 2 - NMX signs deal with another producer AKA - FMC
- cost to produce = $100
-sell to FMC = $120
-FMC sell to battery factory = $150
NMX profit = $20
there is more potential downside and risk to this...big fish always trying to manipulate the small fish that threatens to become big. Smart big fish does something about it that on the face of things looks like helping the small fish but behind the closed doors are hours and hours of planning.
In business (any business):
- never commit too much to one costumer, if you do, the one customer will dictate your business.
- have multiple smaller customers ideally less than 20% of your business
- the once that have 20% (in NMX case should be battery manufacturers not another producer)
-have lots of smaller once that are only 5% of your business, they make the best possible margin for the company due to small volume they buy.
If Lithium is going to be in such demand why not dictate the contracts you sign?
I personally would not sign a contract with another producer unless I get full price for the product. By giving a deal to your competitor, you are letting the competitor get the upper hand and you have no product to ship to the actual customer (battery makers)
If FMC cannot produce and need more raw material I would be happy to those news...I'd say to FMC = send your customers over, I will supply them... what will happen when FMC ramps up their production and no longer need NMX?
Walmart is good at that, they take 90% of a factory production, then they dictate the price, as a factory that already invested in the raw material and labor cannot afford to fight with Walmart and are happy to get your cost and a little profit out... Walmart ends up owning you without actually buying you out. True story, I know factories in China that I am very close to...they can't take any other customers because of capped capacity and they can't lose Walmart because of secured income to pay their bills.
... and that is the reason why SP is hanging on and didn't splash....just another proof of management incapacity...but we are yet to read the actual contract.
when you sell to your competitor, you are helping him stay in business while you make ends meat to survive.