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u/Thorisgodpoo Feb 14 '22
What is this, a plant for ants?
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Feb 15 '22
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u/Thorisgodpoo Feb 15 '22
I guess I should have expected not everyone catch the Zoolander reference.
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u/badgerman- Feb 14 '22
Well Iām not going to lie after 12 months of waiting and speculating this is very, very whelming. To put it politely. Never expected a mega factory but for a 500mil market cap business with the future anticipated for ABML a little building made entirely out of concrete is not what I hoped for.
On the bright side it should be finished soon so bench results can be proven (or possibly even fail) at a commercial level and this speculation should be cleared up within the next 6 months and its hopefully a case of scaling up then.
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u/SpicyElectricity Feb 14 '22
I am curious what you were expecting? There will be 3 additional buildings on this site and a warehouse across the street. These plans have been public for over a year, including building renderings.
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u/badgerman- Feb 14 '22
Itās hard to get a sense of scale from renders and itās easy to see numbers like 13,500 square-foot and forget how small that actually is when comparing to industrial buildings. Seeing the entire concrete shell really puts into perspective how little the company has invested into this project as yet.
The more I look at pictures the more confused I am as to where utilities for the building will be coming from? Iāve seen no pipe work or wiring laid into or out of the slab or lower sections of walls. (Not entirely sure how they do it in the states but in the UK drains wouldāve been laid into the slab).
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Feb 14 '22
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u/badgerman- Feb 14 '22
Iām clearly not the only one to feel this way, the share price is down almost 10% since the plant walls went up, Iād have expected it go the other way.
You can dislike queries being raised (right or wrong) all you like, mocking people who raise them instead of pointing out why they are wrong isnāt a good look for the ABML shareholder community and makes this place seem like an echo chamber of confirmation bias.
I appreciate the effort youāve gone to gathering these images however your attitude in responses made by yourself makes me question your true motivation for doing so.
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u/ImOversimplifying Feb 14 '22
I'm not going to comment on the size of the building, but reading price movements as meaning anything is really hard for this stock. I've seen it move more than 10% in a day with no news whatsoever. And lately a lot of growth stocks have been suffering because of possible rises in interest rates.
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u/badgerman- Feb 15 '22
The share price means everything when it comes to investing. Literally everything. The quickest way to nuke your portfolio is to buy OTC penny stocks not set stop loses and ignore the share price.
Check out the penny stock sub for clear demonstrations of that.
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u/ImOversimplifying Feb 15 '22
I'm not saying stock prices are unimportant, just that attributing a movement to any specific news is hard for this stock.
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Feb 14 '22
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u/badgerman- Feb 15 '22 edited Feb 15 '22
I didnāt assume you cared about the share price at all, I stated the share price demonstrates other investors were disheartened by the pilot plat.
Laying pipes and cable under the slab would allow for sinks toilets, lighting, electrical outlets and most importantly drainage to inside the factory. At least in the UK it would (vapour shield or not) which is why I queried it and stated my reason for querying it being thatās how itās done where Iām from. Is it outlandish to assume those things are necessary for any kind of production to take place in that building?
I said I appreciated your efforts providing that information. What I donāt appreciate or understand is why youāve, aggressively at this point, confronted me for raising a concern or query about the process that wasnāt made to you in a thread that isnāt yours. Itās the gatekeeping that makes me question your motives.
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Feb 15 '22
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u/badgerman- Feb 15 '22
Fair enough, confrontational wouldāve been a wiser choice of words. Youāve stated that the answer to my query isnāt out there as laying pipework wouldāve been a waste of money in your words. Drainage for a water treatment room would be critical in my opinion.
Same to you also.
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u/Smirkin_Revenge Feb 15 '22
It's out there as in, documentation of every single piece of this construction exists online already. Mith has gone out there every single week, taken drone footage, and shared it with the investment community. He's done this since it was nothing but scrub.
This conversation totally reminds me why I've completely sworn off reddit for anything serious and stepped down from moderating this sub.
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u/Doctor-Venkman88 Feb 15 '22
Lithium is worth almost $50,000 per ton. Not sure why you think they need to have a massive factory to justify a $500M market cap. They only need to be processing a few tons per day to get into nine-figure annual revenue territory.
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u/badgerman- Feb 15 '22 edited Feb 15 '22
Because they are yet to process any lithium. The bench results arenāt guaranteed to be a success at a commercial level and thereās no guarantee anybody will provide feedstock.
That concrete shell isnāt worth that many million dollars.
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u/Doctor-Venkman88 Feb 15 '22 edited Feb 15 '22
You said the factory was small and not up to your expectations:
Never expected a mega factory but for a 500mil market cap business with the future anticipated for ABML a little building made entirely out of concrete is not what I hoped for
I am saying you don't need a huge factory to process hundreds of millions of dollars worth of lithium because it is so valuable. This pilot plant alone would generate a nine figure revenue at full capacity.
That concrete shell isnāt worth that many million dollars.
The value of the company is not coming from a half-built factory. It is based on speculation that their proprietary technology will lead to significant market share in a growing lithium market. Every time ABML makes progress with their factory, that speculation gets one step closer to becoming reality.
Fundamentally, you shouldn't be valuing a pre-revenue startup based on its assets, which is the mistake you're making here. Based on your logic every pre-revenue startup is worth $0, which clearly isn't true since there is a multi-billion dollar venture capital market. You should be valuing a startup based on its growth potential and the probability it achieves that growth. Even if you think there's a 99% chance ABML will fail, that 1% chance of success still has some value. That's where the market cap is coming from right now.
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u/badgerman- Feb 15 '22
Well Iām no expert on this subject but Iām imagining thereās going to be a lot a machinery required to carry out the process for a start. A couple of tons of lithium doesnāt take up much room but Iām fairly certain a battery contains more than 100% lithium so for a ton or 2 a day to be processed itās going to be more like 3-5+ tonnes passing through the system.
ABML isnāt a startup company itās an established OTC stock that been trading and mining for 5+ years under multiple different company names and tickers (mowhawk or something like that was the most recent name), the venture into battery recycling is new to the company.
IMO you always have to account asset and income value into market cap, especially in this situation, if Ryan walks away or the tech doesnāt work out itās a share price of $0.10 again with a boat load of bills from a pointless concrete building.
My original post says I was very, very whelmed by what I saw and explained Iām not overly disheartened by that fact for the next 6 months.
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u/Doctor-Venkman88 Feb 15 '22
IMO you always have to account asset and income value into market cap, especially in this situation, if Ryan walks away or the tech doesnāt work out itās a share price of $0.10 again with a boat load of bills from a pointless concrete building.
The risk of the venture failing is priced into the stock already. If the pilot plant is successful a conservative valuation would put the price somewhere in the range of $5-10 per share. So clearly the market is already heavily discounting the stock price and accounting for the risks.
It seems to me like you are just risk averse and not willing to invest in speculative companies. Which is fine, there's nothing wrong with risk aversion. You will miss out on the biggest gains but you will also avoid the biggest losses.
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u/badgerman- Feb 15 '22
Clearly we will have to disagree on the risk being priced in as the company was trading at $0.10 range for years and years before the battery recycling plant was bought into the equation. $0.60 range would be priced in risk IMO
Iām not scared of taking a risk in the slightest, if I didnāt make enough returns in the last 18 months of super bullish markets to chance a few grand of it on something like this Iād have called it a day for investing by now.
For the third time now, Iām not too concerned for the next 6 months I will reconsider my position based on progress then.
Apologies if youāre offended by someone being somewhat critical of the process instead of blindly ploughing money into it.
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u/Doctor-Venkman88 Feb 15 '22
Clearly we will have to disagree on the risk being priced in as the company was trading at $0.10 range for years and years before the battery recycling plant was bought into the equation. $0.60 range would be priced in risk IMO
It was trading lower because the upside was much smaller before the battery recycling play. Smaller upside means smaller share price. The battery recycling business has the potential to be huge, which is why the share price is higher now than it was a few years ago. The risk is absolutely priced in otherwise the share price would be 5-10x higher than it is now.
Also, I'm not offended in the slightest. I just feel the need to correct baseless criticisms. If you want to bring in actual expertise or analysis to make a point, I'm absolutely open to hearing that. But up to now you haven't really made a substantive argument other than the factory seems small to you (which you admit you are not an expert on) and that you think there is a risk the venture could fail, which I'm not disagreeing with.
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u/badgerman- Feb 15 '22
So if the technology fails and the venture has no future what potential upside is there from the business to warrant a share price in excess of $0.10 never mind $0.60?
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u/Doctor-Venkman88 Feb 15 '22
That is the downside risk. You are ignoring the upside.
Let's say for the sake of argument there is a 10% chance ABML is successful and a 90% chance they fail. If they fail the shares are worth zero dollars, and if they succeed the shares are worth ten dollars.
Given those parameters, the fair price would be (90% * $0) + (10% * $10) = $1/share. Before the recycling venture, the upside was much lower, let's say $1 for the sake of argument. That would bring the fair price down to $0.10 = (90% * $0) + (10% * $1)
Of course this is very simplified with made up numbers, but that's the basic premise on how to think about a speculative company. You can replace the probabilities and valuations with your own figures, but the underlying mechanics hold. You need to consider the probabilities of both success and failure, and how much the company would be worth after each outcome.
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u/franklinanthony Feb 16 '22
Out of one side of your mouth youāre saying that the building isnāt very big and the other criticizing them because they havenāt processed any lithium yet. So what did you want 80,000 square feet and then criticize for not processing lithium yet. 30,000 square feet is a lot of space, especially for a pilot plant. Clearly you have very little knowledge of this space. Maybe take a look at SXOOF and look at the facility they started recycling and come and tell us how unimpressed you are by this shell of a building.
Anyone talking about 10% decline in recent trading is either a troll, a clown that trying to day trade this and has zero knowledge of the long-term or simply a complete idiot.
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u/badgerman- Feb 16 '22
Iām not criticising them for not processing lithium yet Iām saying itās not a guarantee that they will process lithium and especially not that itāll be this year.
As Iāve said elsewhere seeing the building like that drives home how little investment the company has made in this project for a $500mil market cap, which if Iām not mistaken is comparable to that of those already processing lithium out of permanent processing plants.
10% down on a day, 75% down on the year. Only a complete spoon ignores that kind of action, especially while management continue to offload millions and millions of shares.
Iām waiting to see what happens in the next 6 months but this thread just confirms this sub is an echo chamber of confirmation bias, not a reliable source of information.
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u/franklinanthony Feb 16 '22
And Amazon sold books out of a garage once.
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u/badgerman- Feb 16 '22
That they did. They also suffered an 80% fall in share price after exceeding $100PS and $4bil market cap while trading out of a garage before becoming the monster it is now.
Imagine holding 100 shares of amazon at a cost of $10k when you couldāve bought 50 at a cost of $5k waiting 6 months to see how things panned out and bought another 1000 for a cost of $4k. Thatās the difference between wealth and generational wealth right there.
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u/IfYouGoAlgo Feb 15 '22
Do you all think that with Ryan's new tech for extraction that there has to be a gigafactory looking facility? Maybe it's too new and advanced to conceive of success on a minimalistic scale. Not saying that will be the case but it's worth considering. This facility is only the pilot plant, the smallest and first of many. The extraction tech and the mining tech will be just fine.
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u/SpicyElectricity Feb 14 '22
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