Fantastic news from AEB and Lufthansa. Good first step. But just a couple of thoughts. How much would you go guarantor for a company without a viable cash flow and not take up any equity in that company? I am guessing the minimum size of the plant will be 200 units costing $125k each, or $25m - chicken feed as far as Lufthansa is concerned. One would think that it might also have to include an upgrade to the American plant, which so far has managed to turn out just 11 "hand crafted" units over 12 months. Maybe they will be able to crank up output to 50 a year, but that is still a long time to wait to reach the minimum size plant. In reality, the Lufthansa deal is precisely what we were expecting from the Chinese. Maybe not just the location of the plant and our, as yet, unsuspecting partner but also the new production plant might be in (southern) Europe. Finding a financial bank in southern Europe shouldn't be too hard - once you have eliminated all the non-financial banks. Just choose the one left over (lol) The most natural partner, once they have completed their own due diligence on their own plant, would be Holcim. But they may not be ready to commit to bigger things till January. The Lufthansa deal is the vital first step to all long term holders doing very well out of this, but I can't see profits within 2 years. I hope the option holders make a bundle but I will stick with the shares.
AEB Price at posting:
37.0¢ Sentiment: LT Buy Disclosure: Held
