RE:What is different this time?15Stanmore wrote: Hello Benedictus. I was looking back at the shareprice run from when NPK last traded at under $1. What I recall was how quickly the price moved upwards once the buying interest crystalized. The FOMO syndrome seemed to be in play, albeit tempered by some shareholders who had held shares acquired years ago at much higher ACBs bailing out when the unrealized losses actually returned to break even.
What is different this time around?
I think we should keep in mind the 4.5 million shares for disposal under the approved CEO "hands-off" sale plan. While the daily impact is muted by the cap on the number of shares that can actually be sold each day, once the share price moves above $1.50 (which appears to be the floor price under the approved plan), some part of the buying interest will be met by shares offered for sale under the plan. It will take over a year at current trading volumes to dispose of the 4.5 million shares.
Something to keep in mind as we speculate about furture share price and the timelines for us to see these prices.
Hi 15Stanmore, yes the ASDP will be a daily thorn in the side reality if and when that $1.50 ceiling is breached. Clearly, it's a known line in the sand for buyer/sellers.
We are a long way from those FOMO days!! Back in 2021 the company's production growth was 65% and the one-two punch of Belarusian supply disruption and the Russian invasion provided an enormous tailwind to expected way above average profit margins.
Fast forward to now and while the potash outlook appears more stabilized, the potash/diesel ratio has proven to be an Achilles heal for Verde. The company has a 5X increased production capacity but this caused a 5X of their total liabilities. Verde is likely on track to sell in the range of 400Kt in 2023, down almost 40% YoY. Admittedly, until we confirm just how bad Q3 was, my bearishness could prove a tad over zealous.
I'd say this new executive team reallly has their work cut out for them. I like what I heard from them but until it shows up in top and bottom line success, it's only talk. For now this is a small cap non-growth high debt carrying company and has been valued accordingly.
The carbon sequestration potential is the ongoing outlier. There appears to be enormous potential and despite Cris squandering much of their credibility with several misleading NR's this year, I expect real NR's announcing closed credit sales will enable them to win back legitimacy. They've clearly made impressive strides in validating kforte's carbon removal potential, however, the timeline toward monetization remains opaque. My hunch is it may require real world MRV collected and validated data for at least a full year to convince investor buy in but hopefully we get more clarity from Lucas in forthcoming quarterly calls.