RE:RE:RE:RE:RE:Return to $2 My perception is that GDNP's inhouse and outsourced manufacturing capacity will eventually not be able to keep pace with the demand their products generate. The amount of capital required to build or acquire additional capacity will be so great that the bigger economic return will be to sell to another business that already has the capacity.
One of the key strategies for the company is to ensure, whenever possible, that traditional thermal forming equipment can process their roll stock. I assume there are many petro-chemical plastics companies that could take the molds developed by GDNP, their roll stock, and be readily capable of producing huge quantities of inventory. Why would GDNP raise/spend millions of dollars to expand manufacturing capacity? Just sell the company and let somebody who already has the capacity do it.
To me, the underlying value that GDNP is developing is the customer base and the breadth of the unique products they develop to meet their customers' needs. They solve those challenges with a product that is better for the environment.
I like the analogy of comparing GDNP to a pizza company.
What makes GDNP valuable is
- the chef
- the ingredients
- the recipe
- their customer base
Not the oven. Lots of businesses already have the ovens
I don't want them building or buying more ovens, at least not once they need so many of them it doesn't make economic sense anymore.
Sell the ingredients, the recipe, and the customer base to "Pizza Pizza" and let them make them.
jermoguy wrote: Can someone perhaps help me understand the reasoning behind building the company in an effort to have it acquired, rather than build out the company to become a pioneer and best in class with an economic moat? Are there too many other players that would have deeper pocket against which Paul can't see competing successfully? Seems like with the social tailwinds behind us, the momentum to build without looking to be acquired would be more lucrative. Perhaps I am missing something here.