Question TEP, for this table is it fair to say that the higher the run rate, the higher chance it will require further CR/dilution? (i.e. a discounted rate may be applied to those higher run rates due to possibility of further dilution?)
It also prompts me to think about these(I'll dig deeper):
1. At a run rate of $30m -$50m, what would the margin look like? For instance, what is CLB's cost structure between fixed and variable costs currently? Will economies of scale bring overall costs down? Apart from costs, what other assumptions may change at a higher run rate?
2.Will growth rate slow down/becoming more saturated as it continues to expand (i.e. Increasing from $7.5m to $15 may be easier than going from $15m to $30m)? Or at what point its growth will saturate? (despite being a $4bn industry)
3. Growth could be good and bad. Will the foundation of this business holdup as it grows? If business isn't well run when it is smaller, those smaller problems will just become bigger ones as it grows.
Overall I like CLB's upside and am onboard. I will continue to look closely at its operation performance as it grows. Thanks TEP!
CLB Price at posting:
15.0¢ Sentiment: None Disclosure: Held
