posted on the ANRG and GRN board by retiredcf
Comparisons
I bought XBC, QST, GRN and ANRG believing that they were well positioned for the energy revolution. Unfortunately, investors have not been interested in supporting these companies and now we have the first one to go bankrupt. There could be more to follow as QST has been on the ropes for over five years. What is it going to take for these companies to go broke? How much more time do they have in public markets and is it worth the pain of holding them through another market crash?
Small companies typically require financings on a regular basis, and much of this relies on confidence, which is in short supply right now. Also, the lower the share price, the more dilution is needed at a fixed amount of capital raised (i.e $10M raised means more shares sold at $1 than at $5). QST has more than $10M cash, but it costs money just to be public. But its cash burn has been minimal so it should have a bit of time (few years at current burn). GRN has about 4 years' cash, but as it is growing quickly, it may decide to raise money before that. It is much larger, and has minimal debt. We would expect it to be able to raise money if desired. ANRG has the largest debt level here and the largest cash burn. But it is also the largest company of the group, with $400M expected in revenue. Management has been through capital market downturns before, and sold prior companies. They have a good reputation and we would expect some long term investors to support the company, if needed. Not risk-free, but likely ANRG is the safest of this group even though the financial picture 'looks' worse on paper. (5iResearch)