From talking to both companies and reading the SI posts, it seems to me that ULBI is a much safer place to put your money, with less short-term gain but more stable long-term growth.
Because ULBI already has revenues from other products, they have something to protect. They are more risk-averse than VLNC because they don't want to trash a running company on a gamble, and they wouldn't be spending $30M on factory equipment if they didn't honestly believe it was going to produce revenue-worthy product. They view polymer as a way to substantially grow their existing business, perhaps by 2-300% over the next 2 years, rather than as a get-rich-quick scheme. In other words, this is just good business.
I get a much squishier feeling about VLNC. They haven't delivered product, managed a revenue stream, satisfied screaming customers, etc. They have been coasting on R&D investments for years and could easily rationalize a 6-month slip in delivery. In other words, they aren't spending their own money, so they don't feel the pain.
It sounds as though VLNC is within a few months of getting noticed by Big Money, sold by a few brokers as the next "hot thing" to their customers. This will send them up quickly as a momentum stock, which will splash out a few months later when people realize that while they may have a good future, it has been oversold.
Meanwhile, LITH is chugging along in the background, almost completely unnoticed, with very minimal factory capacity plans but some heavy-hitting potential customers. If they can arrange some deals soon with customers and factory partners, they may actually ship around the same time as VLNC & ULBI.
So they way I see it, VLNC is for those looking for a quick spike or momentum run that they can sell at the top of in mid to late 1998. ULBI is for the more risk-averse who are willing to wait 2-3 years for the same return with much less risk. LITH is a good choice for sticking in the sock drawer & forgetting due to the dirt cheap price. |
