Seeking Alpha

Galactic Potential Investments

 
View as an RSS Feed
View Galactic Potential Investments' Comments BY TICKER:
Latest  |  Highest rated
  • FuelCell Energy: Will The Plug Be Pulled On This Overvalued Company? [View article]
    This article has so many inaccuracies, false equivalences, and misleading quotes that it is truly a spectacle to behold. The relation of FCEL's grid-based technology to Elon Musk's comment is truly inappropriate. FYI, FCEL has scaled up its technology, leveraging POSCO's investment and global footprint, and is ready to go EBITDA positive in early 2015. If anything, FCEL has the more solid business footing of the 3 "fuel cell" names out there. With such a glib and specious short thesis, you're going to lose on your short position here.
    Aug 20 03:30 PM | 4 Likes Like |Link to Comment
  • Rocket Fuel: Better To Buy Than Sell [View article]
    I was very much in agreement with the author up until this last report. However, the market has come to value profits and free cash over growth alone. The one bright spot was that they were on track to be EBITDA positive by the end of the year and a decent amount of cash to support an unprofitable business. With the merger of [x+1], they slashed their available cash AND admitted that they won't be adding to it anytime this year. Further, the merger adds 160 people to payroll, an increase of 20% to the books, but as a lower margin business, will not add an equivalent amount of revs. It's a move that dilutes the stock AND adds significant risk to the business.

    Rocket Fuel is spending excessive amounts of money to maintain their rev growth but it's not a given that they will be able to reign spending in and be left with a profitable business that has valuable stock. I mean, these guys were throwing a rock concert in July AFTER they knew about their soft June sales. They HAVE to get spending under control and it might take a change at CEO to get it done. George John has been very dismissive of any questions about delivering a healthy bottom line.

    I was long FUEL since Q1 from 35 and bought puts at 25 into the ER. I sold yesterday and I'm glad to have the weight of this bad stock and management off my mind. I don't see this stock gaining any traction until they address the cash burn, bloated payroll, and improve the bottom line.
    Aug 7 09:34 PM | 4 Likes Like |Link to Comment
  • Update: Pandora Beats Earnings But Market Is Clearly Nearing Saturation [View article]
    It seems to me to be a bit shorted sighted to say that Pandora can't grow revenues outside of increased user subscriptions. They're clearly adjusting their model to increase monetization through ad revs, listener hours, and increased subscriber costs. Seems like any maturing growth tech company makes this transition. People panned FB for it's valuation when new user growth slowed and monetization had to catch up. What's a bit shocking to me is a market that doesn't appreciate 40% rev growth, raised guidance, investments into global growth initiatives, and a company's ability to optimize the revenue stream. It tells you that the market's current "risk off" mentality is a bigger factor than the company's fundamentals.
    Jul 24 09:50 PM | 3 Likes Like |Link to Comment
  • Consider Buying Rocket Fuel [View article]
    Your statements about growth YoY seem to be missing the bigger picture. Yes, they're projected to have a lower growth rate in Q2 relative to last year, but when you're using 137% as a baseline, it's a tough bar to match. One should look at the average growth rate over several quarters as there is a seasonality to advertising. In that case, you should find an average of >90% growth.

    As for R&D spending and revs/customer, the CC mentioned that this Q will have more new product releases for customers than at any point in the company's history, all with the intent of driving better analytics for their biggest customers. We should see the revs/customer increase significantly as both the seasonality improves and new product revs come in. This was answered on the CC and the analyst from Goldman didn't object, but they did a downgrade anyway afterwards.
    May 12 01:29 PM | Likes Like |Link to Comment
  • Rocket Fuel -29% AH on weak guidance; Criteo, Rubicon Project also off [View news story]
    Again, you don't understand what they do, so you bash them. Rocket Fuel provides an optimization of targeted advertizing on both generic AND private marketplaces, delivering best in class ROI for the advertisers with proprietary software. >80% revenue growth speaks for the demand, and they're looking to license the software to more markets IF it makes sense for margins, so don't act like nobody needs the tech. Further, people who disable cookies are not a large segment of those who participate in online shopping or entertainment.

    Q1 is seasonally soft for all advertising firms as businesses stop advertising after the new year. They typically do 35% revs in 1H and 65% in 2H. Next Q will show a minimum of 15% increase in sequential revs, and each quarter will build on that until Q1 next year to meet guidance. Wait and see.
    May 9 09:11 AM | 2 Likes Like |Link to Comment
  • Rocket Fuel -29% AH on weak guidance; Criteo, Rubicon Project also off [View news story]
    This is a silly comparison to Facebook and Google. The market is much bigger than social and search, although FUEL delivers to those markets as well. The "worth" is apparent in the balance sheet while remembering to factor in growth. This "small fry" has 700 employees and a growing 1000 member client base. Margins are >50% and expanding. EBITDA positive in FY14. Sigh.
    May 8 10:38 PM | Likes Like |Link to Comment
  • Rocket Fuel -29% AH on weak guidance; Criteo, Rubicon Project also off [View news story]
    FUEL guided 73-76m for Q1 and that's exactly what they did. Q2 also inline with expectations from the company. Consensus estimates aren't even doing the homework.
    May 8 04:50 PM | Likes Like |Link to Comment
  • Attempting To Value FuelCell Energy And What's Next For The Market [View article]
    Finally, a reasonable estimate on FCEL share PT. Thanks.
    Mar 12 09:08 AM | 3 Likes Like |Link to Comment
  • Fuel Cell Energy By The Numbers [View article]
    Backlog is definitely being squeezed currently, but looking that the (recent) management history with backlog vs run rate, they've tried to be relatively conservative with projections for additional sales. They're not going to just ride the current backlog into the sunset (IMO).

    Good luck with your puts.
    Mar 10 01:21 PM | Likes Like |Link to Comment
  • Fuel Cell Energy By The Numbers [View article]
    That's with absolutely no new sales (which they won't always announce with a PR) and does not take into account additional production for service stacks. There will be 30MW added to that very near term, likely some additional fulfillment to the new SK project, and 100MW will be bid during the year. They had built up inventory in 2013 to deliver on 2014 projects.

    See the Q's from the last CC:
    'On the inventory side, we did see a build over last year and the end of last quarter. And you will see some more builds going into -- going in the first quarter as we are making sure that we have the inventory available to execute on project deadlines in 2014. As Chip said, we're focused on closing 30 megawatts of projects in the first half of this year. Many of those projects do have delivery dates on the -- during 2014. So as those come through, inventory will come down as we continue -- as we execute on those and put plants in the field.'

    And as for 2016, that comes from an earlier CC:
    'If we look at our commercial backlog, that really breaks down into 2 components, commercial and service. So service, if you're thinking about modeling, servicing would model out over a long period of time. Most of our service commitments are tied to financing. So that 157 million probably gets modeled out over 5 to 10 years. The product backlog turns much quicker. But in there is multiple-year commitment to POSCO. And as Chip said, we're doing about 40 megawatts a year, and that comes down in the out-years to POSCO, so through 2016. So you really have to spread out over the next several years.'
    Mar 10 12:47 PM | Likes Like |Link to Comment
  • Fuel Cell Energy By The Numbers [View article]
    A declining backlog was a direct result of an increased run rate of 70MW. Backlog was too high at the 55MW run rate, and the 70MW rate would take them to 2016 on the backlog alone. So now they're capitalizing on the committed orders while projecting equivalent new sales. The new rate has been in place for 2QTRs, so one should expect it the backlog to come into equilibrium over the next year.
    Mar 10 12:06 PM | 5 Likes Like |Link to Comment
  • Fuel Cell Energy By The Numbers [View article]
    These SA short articles are all the same (and the top disclosure is not correct as you are clearly short on FCEL). Margins *are* expanding at the new run rate and will be in the teens in FY14. Yes, product backlog took a dip as FCEL finished delivery on Bridgeport and one part of the South Korea fuel cell park. 30MW of new order are expected in the short term, and their new partnership with NRG will deliver substantial new sales in the coming year. The product mix for FY14 will be more favorable to higher margins this year.

    This business of referring to the combined losses over the last 10-20 years is silly. It's a different time for the company under different management (not Jerry Leitman) with a much wider mix of revenue streams and a global footprint. The product will deliver market competitive rates per kW without subsidies, and yet will compete for clean energy subsidies when available as a bonus to the bottom line. They've been generating a gross profit over the past 1.5 years and have clearly defined EBIDTA positive as this year's goal. The global market for *distributed, continuous* clean energy power stations is just beginning to take shape, but its estimate to be in the 10 billion dollar range. Interest in the Asian Pacific region alone has been tremendous and will likely continue.

    Whether FCEL deserves its current market cap has yet to be seen. Do your own DD on the company. Don't listen *only* to the short sellers who are cherry picking non-relevant info to suit their case.
    Mar 10 11:28 AM | 7 Likes Like |Link to Comment
  • My Top Stock Pick In The Innovative Alternative Energy Sector [View article]
    This is a ridiculously misleading comment with little information about the current company. It's not the same company it was 15 years ago, and comparing the current market cap to the losses over that timespan is just silly. You could do the same metric to any number of biotech firms.

    Here are some (current) facts. The company EBIDITA break even is now between 70-80MW production. They currently maintain a 70MW run rate. They've reduced a lot of R&D expenses, streamlined the business model, and increased margins through volume expansion. Margins are expected to be in the teens in FY14, and while that's not high by absolute standards, it is on par with companies that produce large load electrical equipment. The margin expansion is a large basis point increase over 2013 and a reason for optimism. FCEL has also diversified its revenue stream in terms of equipment, reoccurring service revenue, IP royalties, and R&D grants. The comment #2 about service revenue is just completely wrong; it's reoccurring revenue based on PPAs (generally 10-20year agreements) that are in place, so it's only going to go up in the mid term as new sales occur. The manufacturing facility in Torrington can support 100MW production, another site in South Korea will have 100MW production and will be expanded to 200MW by POSCO without CapEx, and a third site is just beginning in Germany.

    For real investors, do your own DD. Don't listen to the dopes.
    Mar 7 09:35 AM | 2 Likes Like |Link to Comment
  • 2 Attractive Under $5 Stocks On The Move [View article]
    A similar article from you got me on MITL back in 2012. After a few bumps in the road at $3, it's now a triple and looking to go higher. Thanks Bret.
    Feb 12 09:40 AM | Likes Like |Link to Comment
  • OCZ: Game Over, Part 2 [View article]
    I'm asking you to be transparent with your financial moves on a stock that you cover with regularity. You sold *most* of your puts already, which indicates that you think the downside is currently limited...a statement you did not make in your article. Actions speak louder than words.
    May 30 08:14 PM | 2 Likes Like |Link to Comment
COMMENTS STATS
22 Comments
46 Likes