FormerXBC Inc XEBEQ

Why has Xebec been crushed?

[tamaracktop]

I've been struggling to understand how Xebec has sunk so low.
Who hasn't?
How could this be?
How is it possible?
How could this happen?

Everyone knows Xebec is trading at a deep discount to its peers in the Cleantech space, and an even deeper one to those in hydrogen.
It will be an interesting exercise after the next financials to determine the percentage of revenues derived from hydrogen operations and to apply the average revenue multiples of hydrogen and Cleantech on a pro-rata basis to Xebec's revenues to arrive at a hypothetical target.

There is a distinct possibility the market has it all wrong, although that rarely happens, and when it does it's usually corrected very quickly.

It's quite possible the market is actually considering the possibility that Xebec will do a financing via a secondary offering, which might be dilutive all depending on how the as-yet hypothetical funds were spent.
"General and Administrative" purposes, for example, are highly dilutive.

If that's indeed the case, and the market is discounting a financing, then I think the market is wrong for a few simple of reasons.

Firstly, a look at Xebec's latest financials shows the company has $152.6 million in current assets.
Of that, $51.97 is cash.
As the company turns to profitability and becomes cash-flow positive, the need for any further financing basically disappears
The company is at that point right now. Today.

Secondly, a look at the company's debt structure gives further insight.
Xebec has a rotating line of credit facility with the National Bank for $59 million.
At this point, the company has used $5 million of it.
It should be obvious enough that Xebec would use this facility should it need to before even considering an offering.
Even that scenario would be unlikely given that Xebec has $51.97 million in the bank.

Thirdly, and finally, remember this excerpt from the discussion of Support and Industrial Services in the Q3 release:

  " While the service centers felt the impact of supply chain disruptions, bookings overall were strong for the quarter and several divisions are now seeing meaningful contributions from cleantech equipment. Xebec expects that the pace of acquisitions may slow down as the company works to integrate, optimize and focus its efforts within the segment. "

This obviously shows that Xebec's appetite for funding is now much less than it has been in recent years.

Basically, I think any suggestion of a financing is a non-starter.

Finally, I want to suggest something unrelated to financings that I personally think is very very significant.
I have yet to confirm Ciao's post that National Bank is projecting 67% revenue growth in 2022 (no offense Ciao)
Nor have I confirmed Zou's post that Desjardins is suggesting that today Xebec is trading at an enterprise value to revenue multiple of 1.4X 2022. If that's true (no offense Zou), it would be simple to reverse-engineer Desjardins' 2022 revenue forecast.
It would be much easier just to see the report.

Having said that, if Xebec is indeed on track to generate 60%+ revenue growth in 2022, not only is the point glaringly clear but the implications are enormous.

All OF XEBEC's REVENUE GROWTH WILL HAVE BEEN ORGANIC.

The effect on Xebec's multiples would be seismic.

Absolutely Seismic.

[filoux004]

Holy craps Batman, what will be the reading on Richter scale?

[tony08]

I agree with most of your post exept for this TT said: "There is a distinct possibility the market has it all wrong, although that rarely happens, and when it does it's usually corrected very quickly." On the contrary i found that the market been wrong is not that rare and it can take months or even year before the correction appens sometime.... example (1): Nortel started

[motivator2]

Hey Tamaracktop: Perhaps I was a bit too "opinionated" in my last post. I do apolgize. You sound like a legit guy trying to help out his fellow man.  Why are u fixated on this pip squeak company called XBC? Your talents could be put to better use. I made some good coin listening to u a few years back.  For that I thank you.  Remember that analyist on BNN, I forget his name

[tony08]

to make a comparison between Cielo and Xebec is totaly unfair. Cielo is still trying to find a way to produce and have many problems to solve before they do. they also already diluted the share value because they badly need money to continue. The CEO, after months of saying everything was going fine, finaly acknowledge their problem, but much to late. As for me they lost all credibility. This

[ferret_ca]

One thing both companies have in  common is the FACT that the management of BOTH have lost credibility . It takes time to earn it back.  Cheers  ferret

[tony08]

I absolutely am against your post.....Since Prahbu's departure, can you tell me one thing that Xebec's management did wrong? They made great aquisitions and partnership agreement. They never tried to hide negative information to investors.   After few months only, i'm sure these actions will put back the share price on track  As for Cielo, after keeping information from

[SNgu8000]

It like compared TIGER = cat  ! I BELIEVED XBC is better and different , CMC can't compare .

[ferret_ca]

Look Tony  Kurt was still in charge when the sheet hit the fan and they had to restate, it was no small blip and went on for a while before it was reported, it was an embarrassment and not just 1 mans doing, Kurt was ultimately responsible, last I looked Kurt is still there for a bit.  THE ONLY THING I SAID WAS IN COMMON WAS THAT MGMT OF BOTH COMPANIES LOST CREDIBILITY,  FACT FACT

[Gann999]

I actually give Kurt credit for hanging in there and taking his lumps and seeing it through until he put the right people in the right place and ensured a smooth transition.

[ferret_ca]

I agree with that comment Gann, hopefully he does have the right people in charge  and taking over, it just may take a bit longer for the market to forgive and forget, these things don't correct overnight as some on here might think. Cheers ferret

[Gann999]

I'm sure he does and the fact that he stayed through the turbulence to see it through speaks volumes about his commitment to xebec's success many other ceos would have scattered by now with their tails between their legs. He showed good leadership there despite the missteps. Yes market is taking a while to forgive xebec but the downtrend is not entirely attributed to the mistakes in 4 that

[tony08]

I also agree with gann post, it make sense....The big difference with gann post and ferret's one is that gann do not put Kurt Sorschak at the same level as Don Allen....Big difference between the two of them... It's one thing to be negatively prudent but there's a limit not to cross and go to far in exageration!!

[tony08]

How can MGMT loose credibility and in the same time make such multiple good moves since a year or so......Contrary to Cielo

[motivator2]

Wasn't making any comparison between the 2 companies. Just wondering about the ethics of some of these analysts pounding the table on some stocks. Don't want to mention any names....McWhirter. 

[tony08]

    Come on "motivator".....Assume your post: this is what you wrote:   Hey Tamaracktop: Perhaps I was a bit too "opinionated" in my last post. I do apolgize. You sound like a legit guy trying to help out his fellow man.  Why are u fixated on this pip squeak company called XBC? Your talents could be put to better use. I made some good coin listening

[Ciao]

We don't know when the shorter's started their position but perhaps they were thinking XBC was going to do a financing that would depress the share price?  Well IMHO a financing is unlikely at this level and there is no immediate need. TTs post on that is below. https://stockhouse.com/companies/bullboard/t.xbc/xebec-adsorption-inc?postid=34445022 I find it astounding that the