Post by
ridethewinners on Sep 29, 2023 11:34am
re valuation
I think drilling fluids will start this fiscal year. Trials seem to have been going on for a while, the EPA certification makes this an easier product to launch, and like all GRA stuff it will be incremental growth, but I expect it to begin shortly.
Volta is a tough one because they cannot start expenditures until calendar 2024, so the financing will need to be in place close to the end of the year.
I am not displeased with Dr. SN's disclosures. He has proven to be cautious and precise, if investors want hype and hyperbole go somewhere else. I believe he is limited by customers requiring anonymity,
and GRA is just not big enough (yet) to force that issue.
I do not expect the large licensing payments some have suggested. GRA needs to keep this technology affordable, not to put barriers to entry that push customers to look elsewhere. There are better ways to structure agreements that ensure customer loyalty. The key issues for me are the long barrriers to entry for competitors, and the IP strength. We will not know on IP until it is challenged, but I am giving GRA credit that they have this right.
A valuation of Volta is difficult because with MRE selling it back to GRA at $20 million for 50%, that valuation must be considered accurate. If it was too low MRE shareholders would have redress, and both management teams have been scrupulously accurate with their disclosures and transactions. While I agree with the battery business model, it is a high risk, medium margin business. That technology is changing so fast, with many larger players with more horsepower developing new technologies. I am glad GRA has all of it, but that means absorbing all the costs and taking all the risk. I believe Dr. SN mentioned on the last call that the customer agreement they have is bankable, and that will now allow the rest of the package to come together, but I do not expect any licensing revenues here, just a series of long term purchase orders from companies stable enough that the bankers will loan on those PO's. This is a good margin business, and it will increase in value as it begins, but it is not the huge cash cow some have forecasted.It should be better for GRA than its' competitors because the Volta volumes will add graphene black revenues to GRA, which is the basic business we want.
best of luck to all