Is the honeymoon over?, page-108

The more I see retail investors panic, the more I am reminded why Buffett holds his shares "forever".

I've had small caps disappear on me. Like ACU - huge potential market (much more than AJX), excellent value prop, run into the ground by management and now worthless.

It's important for you guys to understand AJX's future. I hinted at this when I did the PE modelling but I'll spell it out more.

AJX was originally priced as a market disruptor because the FR technology was the only non-brominated product on offer. The vision was for regulation to prohibit toxic FRs making AJX the only provider. This is what drove the share price to $1+. Military was a side-effect of this - they would be forced to conform to new laws and use AJX's FR solution.

No as we all know government is slow. I know this even more intimately as I'm now a management consultant (and if I was a consultant years back when I bought this stock I would probably have waited, but alas I worked in finance). I've worked with government clients so I'll give you an example - major government service provider to essential services (police, fire, ambulance) was given a hard deadline to upgrade some of their infrastructure or else their stakeholders would pull out. They were running around in panic to get it done faster than their normal procurement process would allow. We bid on the project and expected to hear back in a few weeks because they needed to start ASAP. Lo and behold it took them 3 months to get back to us. What the hell happened to the deadline? That's government for you - slow as hell.

AJX now is priced entirely on its Alexicool which is NOT the original FR that was meant to be its core product. The reason is that despite 3+ years of lobbying, US government didn't move to ban brominated FR as quickly as expected. However, hint hint, there is some progress being made (http://www.providencejournal.com/news/20171004/chemical-ban-impacts-bedding-furniture). Toxic FRs are being phased out slowly and the EPA is assessing bromine now. Hint hint, in the webinar AJX suggested that while the majority of revenue is from Alexicool right now, they expect FR to dwarf Alexicool.

So basically, prices now don't reflect the previous expectation of their disruptive FR solution because it's taken far longer than expected. However, considering legislation is moving, military is still on the cards, and the story hasn't changed (only the timeline), valuations of AJX are wildly off the mark. $1+ was extreme optimism that we would imminently disrupt FR. <40c is extreme pessimism that we'll only experience steady growth from Alexicool. If people were less emotional about this stock, I suspect the true valuation would be somewhere in the middle of the two.