harvey norman commercial, page-8

Hey Pete,

Going by the charts, you certainly would think twice about investing in CFU. However if you look at the 'Market Capitalisation', it's still pretty high for a company not yet making a profit. MC peaked at $370 million in 2006 when investor confidence was sky high, it's now at $198 million, which is around the mark on average for this stock. There's no denying that it's lost ground over '06 and there's been plenty of capital raising along the way to dilute the share price. That's frustrating for sure, but it's not a small thing bringing a brand new concept to market viability.

IMO, the thing that's scaring investors off currently is the lack of volume in production. They're currently just past the concept production stage and now building units for real world 'proving' and manufacturing ramp up. It's a bit scary seeing the cost of a single unit right now, but that will come down significantly. A concept car for example can cost 10's of millions, but by the time it reaches full production, it's in the 10's of thousands.

Bringing Bluegen to the market is now a matter of proving strong return on investment (ie. significantly reduced manufacturing cost) to the big stakeholders. I assume that's going to happen somewhere in the not too distant future, but that's the risk you take :)

Until CFU announces that they're selling significant numbers to company 'X', the share price will remain at these levels. That's just where we're at right now. Investing at the moment is pretty much gambling at the very bottom, but as far as I'm concerned, the odds are stacked in our favour. To play it safe, you may want to wait for that announcement to happen before buying in, that's up to each individual.

I find CFU tests my patience as all speculative stocks will. But lets face it, there's so much upside and the human race needs this sort of technology development in order to move forward. For those reasons, I stick in there.

Good luck,
Pete