Re the share issue all of that was known from when the loans were originally put in place. It is linked to the delays in the original re-listing. It was also known in detail as soon as they put the AGM Notice out as it was all detailed there. So the share issue itself won't have been the issue impacting the price (except for those who don't properly read announcements). But part of me (sceptically) thinks it could have been an intentional push down of the share price to enable the share issue to occur at a lower market price. This impacts the tax that will be paid by the directors for receiving the shares for the loan repayment. The lower the price, the less the tax.
I think the thing we are seeing now is the waiting game to look for the development to be completed and for the operations to start producing revenue.
It is very much like a mining company that goes from exploration, to discovery, to development and finally revenue generation. There are value inflection points, but they are often jumps at stages. Right now we are in the development phase. Until they finish the plant and do some testing, people will not completely believe that it is real. Nobody knows if this is real at scale as this is the largest plant they have developed. And their smaller plant at Berkeley Vale (near Newcastle) works, but has never operated at a proper scale or run-rates because the NSW Govt has not allowed them to do so.
Remember, we have almost 400m shares on issue, so have a market cap of $130m. There are also almost 190m options on issue, that come into the money at $0.40.
I suspect that until we know the plant is almost finished, at best we will see a modest increase in price (if at all). But as soon as they say that they have completed testing, and the fuel quality is good, and they get all the operating certificates then I expect you will see a substantial jump in value because people will know it is real (especially once they achieve first revenues). Then (and this is the exciting part), people will start to pull out the spreadsheet and do calculations around what more sites look like in terms of revenues and profits (because once they successfully build 1 plant, they can definitely build a lot more). They will calculate all the current plant agreements and tonnes per day, and start running out of room on their calculators. And then the market cap and liquidity will result in institutional investors buying the stock.
So... if it all works as planned, you could see a huge increase in price. This time next year, the stock is going to be either many, many multiples of the current price, or it will be close to zero. Given my holding I sure hope everything works!!
All you need is some patience, and potentially some big kahunas to hold on if it works, because you will need to judge when to sell...
So this is pretty high risk, and people need to do their own research on this.
Cheers
Marv
