Some thoughts, page-27

Hi Zoulou,

I am not confused about the rate of generation. Carnegie have published online that the CETO 5 trial was 3 x 240kW bouys, that were “operational” for 14,000 hours and generated “12,000 kilowatt hours”. That is 12 megawatt hours (MWh) of energy – an absolute pittance! It does mean that if that energy were averaged over the 14,000 operational hours it is an average of 857 watts. Now I don’t think they did average that, it was clearly up and down, but it does show what a pittance of energy was generated over 14,000 operation hours. You are right – it is less than a rooftop solar system – despite being about 4,750 times larger - that’s how bad it was and that’s what YOU should be thinking about.

You comment that they diverted energy to tests etc. Sure – but they don’t publish any of that data so we don’t know what the underlying generation could have been. Maybe if they published it I wouldn’t be so critical? They could easily add that generation back in and publish that data. The fact they didn’t publish it could mean they don’t know it, it wasn’t material, it was incredibly inefficient etc.. Why didn’t they publish any of this? If they were doing rigorous, scientific testing they’d have 3^rd party assessed results that would verify results etc but… they don’t.
Survivability of one year – is nothing. A power station needs to last 15-40 years. We don’t know anything about the maintainability or survivability of these systems because again, no comprehensive report or learnings have been published. If they have please linked them to me! So the actual bouys and cables lasted a year in the water – so what?

What is the system’s efficiency??? Do you know what it is? What has been their efficiency improvements from say CETO 3 to CETO 4 to CETO 5 and what will they target for CETO 6? Again – I haven’t seen anything they have published about CETO 5 at all. Why do you say Western Power, ENEL and EdF are not concerned about CETO’s efficiency? What evidence do you have of that? As far as I am concerned they have had the wool pulled over their eyes as much as anybody! That is my concern about all of this.

For the record, I hold other stocks but most are not speccies so I don’t comment on CBA for example. This company is on my radar because I followed it from its early days (it sounded so good!) and I have friends who hold it (and I am trying to convince them not to buy into the CR!) and it is my opinion this company doesn’t have anything of any value at all and as a result it has imploded this last 2 to 3 years. It has been grossly mismanaged (that is FACT) and the evidence is their present financial catastrophe. My motivation in this case - I am trying to raise the level of scepticism on this stock/company!

I think it is possible the Director’s main motivation is they are trying to salvage some of their own losses (and maybe put as much time between the recent 3 to 4 years activities and when it finally closes down or amounts to nothing, to avoid detailed scrutiny?) by once again tapping shareholders (other people’s money) and I believe they will tap the same shareholders again very soon and never get close to commercialising anything before they ‘change tact’ or change the product they will try and commercialise -leaving shareholders in the dust without batting an eyelid. It’s not illegal and I am not implying that at all, only that it is nasty for the people being used for the ride!

I guess this will all be moot in a week or so when they either get up, or they don’t. They’ve said they have 10,000+ shareholders, well this group makes up a hand-full so this debate is probably moot. I hope my friends don’t put more money into it – they should take their losses, lick their wounds, and scratch it up to an expensive lesson learnt (look for facts, not vapourous Announcements of blue sky with no facts and details).

20+ years of owning (and selling) shares and being interested in business (and screwing up on stories like this one), is leading me to believe these guys are not going anywhere. If you put in, then I wish you good luck and good outcomes, not bad luck. If they get their money I hope they are legit and I am wrong.