[ Short IBIS ]
Tom, I actually started researching IBIS as a potential long, but wound up going short. The current stock price discounts an extremely positive future. I have a positive opinion on SOI in general, but believe that it will be a niche market for years. I was very surprised to learn how much effort the multi-nationals have been putting into SOI for the last few years. They are probably not focused on the near-term niche market, but want to get positioned for a potentially larger future market in a decade. Meanwhile, they will aggressively spend money to take the lead in technology, without regard to profit or loss. They make money elsewhere. Ibis doesn't have a another great source of income to fund R&D for ten years. They need sales now, and they need pricing to support high gross margins now, so that they can afford R&D. How can you get high gross margins competing against companies and governments that don't care about short-term profits?
I've got to credit Alles for writing a technically honest article instead of a promotional one. The botton line is that he regards the Eltran and Smartcut processes as superior to Ibis's Advantox. Alles is a good engineer. When the time comes, he can get a job at any of the competitors. |
