FormerXBC Inc XEBEQ

Utilities Utilities - Regulated Electric

Xebec Adsorption Inc designs, engineers, and manufactures products that are used for purification, separation, dehydration, and filtration equipment for gases and compressed air. The company operates in three reportable segments: Systems, Corporate and other, and Support. Its product lines are natural gas dryers for natural gas refueling stations, compressed gas filtration, biogas purification, associated gas, engineering services, and air dryers. The company's geographical segments are United States, Canada, China, Other, Korea, Italy, and France.

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FormerXBC Inc > Short position to April 30.

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Comment by kulewateron May 06, 2022 3:48pm

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Post# 34663282

RE:RE:RE:RE:RE:Short position to April 30.

i dont disagree with the narrative of short scenario. And I concur on the roadmap they have put forth. I do however remember them saying acquisitions will not be a priority this year as they work to optimize and integrate existing units across the organization. They could still do one or two I suppose.

The question remains.. what would they need to happen for $100M in capital to not be sufficient this year based on what they want to accomplish? It would need to be a transformative acquisition or some very very large projects.

Ciao wrote: XBC have agressive plans to grow it's eco system in part by acquistions. So as noted by management, they are paring down their service flow purchases, looking for partners on their H2 hubs to help finance them,and managing cash flow with customers and vendors to minimize the need to hit the capital markets at "current market" conditions.

The SHORT has been doing this since mid Sept and up to the end of February, driving the share price down has worked for them, but instead of covering below book value, they got carried away and shorted further, now with an illiquid market (they already exhausted most sellers), any covering on the open market creates their own squeeze, watching it rise on good news forces them to hit the rallies else a rising price will motivate them to cover.

kulewater wrote: From latest filing:

As at December 31, 2021 the company had $51.1 million of cash and restricted cash

A decent amount of cash and a credit facility close to another $50M. Not sure what the financing or PP would be for. I suspect if they do get another massive conversion from pipeline to order they may need more slack in the operating capital but the share price and revenue would help mitigate need to access capital markets.

Shorting XBC seems like a fools errand at the moment..

Ciao wrote: The SHORT is betting on a financing (to cover) vs. others betting on the fundamentals of the company and that at a valuation of 1XBV and 1.5X forward P/S, it's undervalued.

kulewater wrote: Quite a precarious position for shorts to be in.. especially with the inflection point on the horizon.

There is a few big bets on both sides that will be interesting to watch. Looking forward to the Q1 release and subsequent developments.

Have a great weekend all.