Ian, the price target is a bargain. The market is pricing the stock for failure. If the demonstration plant lives up to expectations, AEB biggest problem is going to be to meet demand. according to the prospectus, each module should produce sufficient algae to give a profit shared between AEB and its joint venture partner of $7m each. They are currently producing, apparently, about 11 modules a year. They have to increase that to several hundred a month - with consequent profit to each joint venture partner. The price should jump once the announcement is made as to how they are going to meet demand. Most of the finance, according to Roger in one of the videos, will come from the Chinese banks. Some of the capital will come from a CR from shareholders - $10m - $20m presumably once the absolutely fantastic news begins to pour in. Being a very conservative market at present, one presumes that potential shareholders, aware of Patterson's Curse on CRs, are pricing in all the negatives and none of the potentials.
AEB Price at posting:
39.0¢ Sentiment: LT Buy Disclosure: Not Held
