No ditto here, Copeland. I disagree with your and your dittos' analyses; the points just don't hold up under scrutiny.
There has been dilution, and there will probably be a bit more, but it is not mega dilution, rather is is well within reason for a small company like Rentech, and certainly not enough to scare away investors if the company's technology is validated and significant earnings become foreseeable. The deal with Texaco is certain to validate the technology, if it needed validation, and as you know, the market will boost the price long before earnings are realized. Even without immediate Texaco-generated earnings, the company is in the process of other deals and acquisitions which will very likely result in positive earnings within the next couple of quarters. You can confirm this probability with IR representative Mark Koenig. I also agree with previous comments on this thread which have observed that the larger float can actually be considered a positive as institutional investors decide whether to get involved.
The current state of the market may also well work to the advantage of a smaller stock with significant foreseeable potential as investors look for opportunities with less downside risk and great futures. That would be the case with Rentech after a Texaco deal is announced, at least until the price causes Rentech's market cap to approximate Syntroleum's (which would take Rentech, through normal market gyrations, to the equivalent of $6 - $8 per share as recently discussed on this thread).
The current dip in the price of crude is also, in my opinion, a non factor. The advance planning time for Texaco and other majors interested in gearing up to use Rentech's technology is far too great to be affected by current trends. And, as has been discussed and emphasized at length in oil and gas journals, other industry publications, and informed and thoughtful posters on this thread, the real future in oil and gas production -- for both environmental and cost reasons -- is in the GTL arena.
Finally, I take issue with one of your ditto's who doesn't believe that negativity on this thread has any effect on the stock price. I don't think anyone will argue that the internet is a technological marvel which has and is changing the information world forever. It has indeed become enormously influential and is becoming more so on a daily basis (witness the Drudge report and its ilk). SI is one of, if not THE leader in on-line securities discussion groups. Both companies and their analysts, as well as brokers claiming to be knowledgeable about a stock, are not doing their job if they do not at least keep up with the general flow of such on-line commentaries and perceptions.
While I would fear a discussion group that rejects negative comment when it is supported by facts or analysis, I think it is irresponsible to espouse unsupported negativity. To me it is obvious that such negativity is indeed harmful, particularly when it is repeated over and over, as is the case when people's egos become so involved that they feel they must become crusaders for their opinions -- sometimes, even when those opinions are unsupported by any sustained analysis.
As you may know, it can take as little as one, or perhaps two, trades by an MM intent on making a "head fake" to start a mini selling (or buying) rally among the masses of shareholders. Unfortunately, false rumors and unsupported negativity on the internet can create the same kind of uncertainty and cause sales activity in far a greater number of shareholders than is represented by such MM manipulation. (Certainly all seem to agree that the reverse is true whenever someone is accused of unsupported hyping to encourage buying). That, I guess, is the price we have to pay for this information explosion that is the internet.
But in my humble opinion, it is disingenuous and intellectually dishonest for such posters to maintain that their crusades have no effect. And for those who are long on a stock, it is just plain stupid.
I don't mean to put your analysis in the unwanted category. Thank you for posting it. I must admit it made me think a lot and make this post. But I, for one, believe that we will not wait "a few years" for Rentech to be at $5 - $8. I believe that those who do wait will simply be too late. Indeed, I think even those who wait until after the conference next week will be too late.
Regards, Buendia |
