Something else we need to consider.Not investment advice. I am not responsible for any investment decisions you may make.
Please seek investment counsel before making any investment decisions from a registered investment advisor. Please do your own due diligence.
I am not recommending to anyone to buy or sell SCY.
"I don’t have enough scandium” maybe it should be "we do not have enough shares"!
Should SCY secure some waste stream contracts, it could potentially give SCY the kind of business model that would allow it to be considered for ESG fund inclusion. Why should this matter? Well there are over 3000 ESG funds globally. And that will potentially double in the next 5 years. In fact I think we will be hard pressed to find a fund that’s not somewhat concerned or gives lip service to ESG in the not to distant future. So what if ESG as a thesis discovers SCY in a big way, or even in a small way.
Lets suppose SCY starts to get interest from some ESG fund managers. For argument sake and to be conservative we’ll say that 2% of the current 3000 + ESG funds globally representing sixty funds show interest in SCY initially. Staying with the conservative theme lets say those 60 funds have three hundred million under management. Now we’ll assume these 60 funds like the cut of SCY’s jib and decide they want to include SCY within their funds holdings because of their waste stream business and the potential that Scandium affords the future as a light weighting element. It always pays to have a good back story, and SCY has that. They research the company and decide to include it within their prospectus at a 0.5% weighting of that three hundred million under management. What would that represent to SCY in terms of demand for shares in the open market over time. Now using a 0.5% weighting may be considered high if it were across the board. Admittedly some funds may seek 1% or 2% while others may only seek 0.2% or lower. Also some funds will have 1 billion under management others 500 million so 0.5% is a moving average. And one funds 0.2% may be another 0.5%.
Lets review the current share structure give or take.
Total Shares at or near 331,000,000 (in actuality it may be closer to 342 million).
Insiders own roughly 148,950,000 shares (recent options not considered).
Loyal longs another 35,000,000 shares. (guesstimate).
Sub total: 183,950,000 shares.
Leaving a float of 147,050,000 (roughly).
If sixty potential funds representing just 2% of the 3000 plus funds globally with 300 million under management, took down a 0.5% weighting in SCY that could translate into sixty ESG funds with:
300,000,000 x 0.5% = 1,500,000 dollars invested in SCY each (at 0.20 as a reference) is equivalent to 7,500,000 shares per fund x 60 funds at $0.20CAD per share represents 450 million shares. We do not have enough shares. So eithetr they create more shares or the price will need to go up. The last time I looked at SCY’s level two quotes I could see perhaps one million on sale all the way up to $ 25.00 (there's optimism) there are not enough shares to facilitate sixty ESG funds buying a 0.5% weighting. So we may see lower weightings than 0.5% or a direct PP request to get a position of size on. I simply do not know how it could shake out, but it does illustrate the potential squeeze up if SCY hits an ESG home run. It may well be a higher share price because the rule of supply and demand will take effect should ESG funds turn their attention to SCY in a meaningful way. (IF) they turn their attention to SCY. We’ll see.
The biggest challenge any business faces is success and the growth that comes with it. Failure is easy, sustained growth is hard. If SCY can pull off some waste tream and they perform well there's the possibility that ESG’s discover SCY and knock on their door.
What if growth does come knocking at the door?
SCY does not have any social media presence none, zippo, nada. That needs attention. The lack of these tools comes at a cost to us all. Social media allows shareholders and those thinking about becoming shareholders a way of joining in the narrative even shaping it which lifts some of the burden from management. Has anyone noticed how YouTube can be used these days?
Secondly the Alloy business may become a drag on ESG inclusion. Alloying is energy intensive because you need to melt the aluminum to mix in the Scandium oxide or Sc ingots. ESG funds upon examination of SCY’s practices may decline SCY inclusion into their funds based on this. It’s a possibility. Does the alloy business need to be spun off? Is there currently any intrinsic value being placed on the Sc Al alloy ambitions, so should a melt shop be mentioned in any future corporate presentations until it;s a reality or spun off? Because it might turn off ESG funds from buying SCY shares? Then again it may not. Maybe that’s a consideration for later.
God bless.