FormerXBC Inc XEBEQ

RE:Stretched

[tamaracktop]

tamaracktop wrote:
Everyone here knows that stocks get stretched in both directions.

They always have and always will, but you don't know for sure they've been stretched until after the fact.

When Xebec hit $11.55 in January 2021, it was obviously stretched to the upside, but nobody knew it at the time.

There are no limits to how high the market can take a stock to the upside, despite its fundamentals.

TD raising their target to $17.50 less than 2 weeks before Xebec hit its high is a case in point.
The dot.com bubble was a case in point.

More money was lost when that bubble burst than would have been lost if one out of every three homes in the United States at the time had burned to the ground without insurance.

There is, however, a limit that stocks of viable companies can get stretched to the downside.

When Xebec hit $1.37 it was ridiculous.
It was trading at a fraction of book value, and while I was pounding the table, the likes of ferret and Filoux were calling me a POS and a Looser ( ha! )
In fact, ferret did as much the very day Xebec hit its low.

My point isn't so much to bring up ferret and Filoux's misguided criticism, but rather to point out how stretched to the downside the stock was.

An extension of that argument is that even after gaining 66% off its low in six weeks, Xebec isn't stretched.
It isn't stretched at all.

At $2.25 now, Xebec is trading at only a very slight premium to book value.

Newsflash: Xebec is a "Going Concern".

Actually, it's a Growing Concern.

It's a growing concern who's stock was hammered down to levels that were plain borderline crazy.

The market has recognized the folly of what had happened and is correcting it fast.

The pendulum is swinging the other way, but at this price, the pendulum is still far from its pinnacle, before it starts swinging back the other way.

The rally isn't tiring, in fact it's accelerating.

The stock isn't stretched here by any means, but the velocity and mass of this rally indicate that it's definitely to get stretched, to the upside and in short order.

I have no idea what level it will get stretched to, but I know for sure I'll know it in hindsight.

It's important not to get carried away here, although this rally has certainly brought relief from the drudgery of the last 14 months.

The tone of this board has done a U-turn, but it's important to accept that this isn't going to be the norm.

4 days ago I wrote

"Everyone seems to think that a pullback or further weakness is a given, but the market has a tendency not to accommodate the masses, but rather to disappoint them.
This stock isn't stretched.
This rally has legs.
It won't be straight up ( it might be for a few more days ) but this stock is definitely going higher."
$2.25 now on 1.17 million shares."

It's absolutely guaranteed that there will be periods of profit taking and periods of general weakness in this stock at some point.
It's far easier to acknowledge this today than it will be to stomach it when it happens.

It's inevitable, and everyone here has to prepare for it, accept it, and not lose faith when soft days come along.

Everyone should prepare for those days, always keeping the bigger picture in mind,
and here's the big picture...

Remember what lured many, if not most, to invest here?

It was the looming spectre of a massive paradigm shift towards renewables and green energy.

Everyone correctly anticipated enormous inflows of capital into the sector, and they were correct.

These were the inflows that took Plug from $13 to $80 in less than a year.

And Ballard from $18.00 to $50.00, and Greenlane from 60 cents to $3.00, and FuelCell from $2.00 to $40.00, and Xebec from $2.00 to $11.00.

It will be much easier to weather the setbacks if you keep in mind the big picture.

The sector has been severely punished, but the original rationale for investing here remains intact.

If anything, the original rationale even far more sound today than it was 2 years ago, when the aforementioned stocks made parabolic moves .

Since then we have seen many more examples of the destructive results of climate change, we have seen increasing calls to address it, and worldwide, governments now have two years less to achieve their emission goals and their timelines.

And it's not only that. The primary, and pretty much the only tailwind behind these companies up until now has been the societal pressures to reduce the use of fossil fuels to affect a slowing in the rise of global temperatures.

Now we have the added tailwind of the economics of rising oil and gas prices caused by sanctions on Russia.

Europe is suddenly acutely aware of its vulnerability resulting from its dependence on production from Russia.

This is a transformative and disruptive juncture.

The mandate of governments across Europe now is to wean themselves off their reliance on foreign production and become as energy self-sufficient as possible.

These two tailwinds, climate change and energy self sufficiency, combined create a very powerful driving force for investment in this industry.

The case for companies like Xebec is stronger today than it's ever been.