The last week has been very busy for me, I haven't posted and haven't been watching AGY closely.
In the last week, there has been a huge amount of posting.
I can summarise thousands of posts and multiple announcements:
AGY announces a small CR with good terms. It's only enough to kick the can down the road a little and doesn't represent anything much more substantial than delaying further need to raise capital by a quarter or so, and unless production ramp up is spectacular, there will be another CR on the horizon.
The bulls act like it's the return of the Messiah, the bears point out that it's not, the bulls throw tantrums at the bears pointing out that it's not that amazing, some bears pop up out of thin air and say some bizarre nonsense bearish stuff almost as ridiculous as the usual bull nonsense, there are fears about a 'gap' closing as though the $5M investment is enough to cause a big rally rather than a brief spike, the bulls continue throwing tantrums, the bears point out that the tantrums and overoptimistic outlooks are silly, the bulls continually scream for everyone to block and ignore the bears because they can't handle any dose of reality and just want to sit in their echo chamber of ignorance, Gcar is needlessly a complete bitch in every one of his predictable posts, there's much more focus on personal attacks etc than any attempt at substance/analysis etc.
I personally quite enjoyed the squabbling about what counts as tier 1, whether or not it matters that the product will go to phone etc batteries rather than cars (hint: it doesn't matter at all, it's a commodity product, if they make it it will sell, AGY just needs to actually make it in more than trivial quantity).
So, here we are. At the end of the day, AGY has talked ATL into investing some money. If AGY had any fraction as much talent at making a plant work as they do at spinning a good story and dangling a carrot, they'd be pumping out a tremendous amount of white powder by now. The decision by ATL to invest is largely meaningless, the bulls will throw a tantrum at me saying that but it's clearly the reality. The good news is that for moderately low dilution (they did well to talk someone into paying a small premium, though if you're a bull you'll see the price/dilution as bad except that you'll be in some form of denial about that) they've kicked the can down the road. If they can ramp up production at the astonishing rate the cheer squad here expects, happy days. If not, more CR and dilution is coming. For now we can enjoy a stagnant or slowly falling share price until the next progress report. If you're a true believer it makes sense to hold. I'm happier watching from the sidelines, but this small amount of cash does buy enough time to let them demonstrate their implied promise of production ramp up before a nasty CR crashes the price. There should still be a good opportunity to buy in if the production miracle comes, as long as you act quickly when the good progress report comes, but if the next report is bad, look out below.
The probable reality is that in any company-specific scenario, lithium prices are never going to get back to where they were and AGY will never get back to near its 80c peak. The best cure for high prices is high prices, and we saw so much investment in new lithium production during the price peak. Sure, some of that production is high cost, but not all of it. EV sales continue to grow, but not at the rate we were expecting a year or two ago, and production increased faster than we previously thought possible.
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