Post by
DiveEsther on Mar 02, 2017 10:32am
Realistic Expectations
Personally I believe the story with TMS is intriguing, but not yet compelling. There is significant commercialization potential for their technology, but this story will take some time and patience. Commercial / industrial adoption & application of their technology will likely involve a slow roll-out and there will be hiccups along the way. The execution of their recently announced “commercialization strategy” and the generation of a reliable or fixed revenue stream (joint ventures, licensing, build contracts, etc) will also take time. At present, there remain a lot of unknowns as management has not communicated a detailed strategy to accompany their vision. The latest NR has very little "depth", rather is a rehash of the broad market potential for commercialization. Lots of buzz words like "working collaboratively", "potential partnerships", "discussions", "evaluation", etc.
A key statement from the CEO, while filled with optimism, highlights the challenges that lie ahead: "We are receiving keen interest from potential customers as we explain the positive economics, performance benefits versus conventional technology, and the potential to eliminate polluting emissions.”
They still have to win over and convince their target markets... The company is still exploring different possibilities... What will be critical in defining the future success of TMS will be the company's ability to convince the market to adopt their technology. This will not be an overnight success story.
There is no doubt this company will need to raise more equity in the near-term despite having just raised 2 million on the books in October 2016. A review of their financials shows an accelerated cash burn (although in my opinion, the expenses seem justified).
My opinion is that an investment here is still very early with significant risks of near-term dilution. I don't see anything to suggest capitulation of the share price, and near-term fluctuation is likely going to be range-bound. Low volumes also means that traders will stay away, and the general movement of the share price will be based on any significant developments and news releases. The timing of the last news release was not unexpected. It was purposefully timed to generate some hype in advance of the expiry on the "hold" period on their latest equity raise. If I were a share holder today, I would sell on news or volatility spikes, and re-acquire in the weeks that follow... trying to trade on low volumes can be frustrating however... there is a tight float of shares.
I'm tentative to invest now as I feel TMS will become a long-term hold before significant value is realized. Near-term, an investment here is likely to amount to "dead money". I will await clearer corporate direction and updates, as well as signs of execution of their corporate strategy (ie. announcement of a signed commercial contract or agreements in place). I don't think I'll miss out on any significant share price appreciation in the near-term, and in the meantime my money will working for me elsewhere.
Again, this is a good one for your watch-list. I'll revisit in 6-12 months. Good luck to those currently holding and long.
Esther
Comment by
gobig1 on Mar 02, 2017 1:46pm
Good post Esther. Thanks for taking the time to explain things as you see it. I am more optimistic than you, but it is all hinged on them signing a commercial agreement in the near term. If they don't this will likely be dead money for some time and further dilution at these levels is very likely.