That piece was shared a week or so ago and I am skeptical of the journalist's intent. Some of the language ('long-failing' and 'limp across the line to an ASX listing') are wildly inaccurate and seems to be written in a way to support a predetermined position. I also read some of his other pieces and he certainly has a type of story he likes to write. A little bit too ambulance-chasey for me to take seriously.
Anyway, I took the opportunity when the share price hit $1 during the worst of the Covid-crash (or is that yet to come?) to double-down on my holding and averaged well down.Fundamentally, I really like the product and there is still nobody doing what CBR are doing. ESE Carbon is a garage-band type operation which isn't even playing the same sport, let alone in the same ballpark, Porsche appears to have abandoned their CF wheel program which seemed to be a technical showcase project only, Koenigsegg make a great CF wheel but you have to spend $1,500,000 to get a set of 4x (not an exaggeration), Dymag make a two-piece CF and magnesium wheel which to me is far less desirable than a one-piece CF wheel and a compromised alternative.
The reasons I remain bull on this stock (in the medium to long term):
- First mover advantage, industrializing a process/product that others think cannot be mass-produced, and the associated patents to go with it;
- Unsprung mass reduction is the holy grail of the automotive world;
- Ford and Ferrari as OEM customers, with further product extensions on the way, although now pushed back 6 months;
- Corvette Z06 likely to have CBR wheels, and the wider market does not know this;
- Next Ferrari halo car (F80) will have CBR wheels as standard fitment (my opinion only);
- SUV contract yet to be announced;
- Investment fund recently buying-in.
There are of course risks; if they lose Ford or Ferrari as a customer they would be in big trouble. But if you listen to the investor call, the OEMs seem to make a lot of money from customers who tick the CF wheel option box, and I would imagine it costs the OEM very little to offer the option, so why would they leave? Ford is also the industry leader at light-weighting production cars, the automotive world thought they were crazy making the F150 out of aluminium. Still the best selling vehicle in America.
I get tired of Neil talking about dividends, profits and poor mum and dad investors. This was a speculative buy from the outset, anyone buying it knew what they were buying. I could not care less about dividends. I bought because this company is exciting and their product is sexy as hell. And that's not even taking into consideration the aerospace application of their product.
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