RE:RE:RE:RE:New around here....I'm appreciating everyone's comments thus far, please keep them coming!
Of my many backgrounds, engineering and light electrical understanding is one of them, so I like that I loosely understand the technology here, as well as it's benefits.
So far, after reading CoCa's WONDERFUL DD, I have the current mindset.
Things I am concerned about:
- Future share dilution. According to their MD&A, they have increased the amount of shares substantially, and also according the their MD&A, they will need to raise significant future cash in order to fund future operations
- Management has very little skin in the game: I believe I just read in this thread that they hold less than 0.9% of the company(correct me please if I am wrong). This is much lower than I am used to, but not a full deterrant.
- Technological moat: I have concerns about how easy it may be for a "bad businessman with $1billion" to create a product that directly competes with their coil driver. (My mind wonder's why not 3 modes as opposed to 2?)
Things I like:
- Very simple business concept: Sell a product for money.
- Simple to understand industry: Electric motors are EVERYWHERE, and any time they would benefit from being multi-staged, that is a potential sale.
- Product focus on growth industry: We all know EV's are the future, and their product is suited directly for that industry.
- Right people: The exec's and boar seem to be very appropriate for the company.
- Mariner Research smeared them: If mariner research runs a short report on you, their is a very good chance that they are trying to accumulate shares at lower prices(they do this), and it is a positive sign to me
- Patents: Although I haven;t read the specific patent papers yet, this is positive for moat protection(despite the moat potentially is not large, more to research before I determine that)
- Volatility: I came across Exro by doing a TMX filter search of "small" companies with high volatility, and out of about 60, Exro is the only one that had legs for me. I LOVE volatility, it gives great purchase points.
- Linamar: This is HUGE. Linamar is a MAJOR player, and their validation alone speaks volumes about the technology and Exro as a company.
I'm not a huge fan of paying $400mil for a pre-revenue company, however with patents, and a good plan that they are following, this seems like it has everything going for it minus my above concerns.
The other thing I will need to figure out is the amount I want to to enter at. Without looking at the past year(s) chart, it is always hard to determine what the fair price of a pre-revenue R&D is.....It seems that long term, if things go right(and the dilution is halted), then any price under $10 is a bargain. However, if I shorten the time window to 6 months, it seems that $4.00 seems to be the average "Buy below" number.
If the Mariner report pushed the price down to where it is now, then it is unlikely to go sunstantially lower in the future in my mind, but never ever say never ever, right?
At what price would you be selling your children's bike in order to get more shares at?
Cheers and thanks to all here so far!