Seeking Alpha

Al Marshall

Al Marshall
Send Message
View as an RSS Feed
View Al Marshall's Comments BY TICKER:
Latest  |  Highest rated
  • Axion Power Concentrator 396: Apr. 16, 2015 [View instapost]
    393748: I won't dispute your point in that clearly reliability declines as a truck ages. Still, a trucking company with a relatively old fleet that is still even marginally profitable must be doing something right.

    Also, if true, that completely invalidates ePower's entire business model so this then becomes an academic discussion because the only business that would remain would be getting the OEMs to adopt the technology in newbuilds. ePower has admitted many times that that is many years away in the best of circumstances. In any case, my recommendation is based on the assumption that the ePower rebuild works as advertised.
    Apr 18, 2015. 05:02 PM | 4 Likes Like |Link to Comment
  • Axion Power Concentrator 396: Apr. 16, 2015 [View instapost]
    Regardless of whether it is in front or behind the meter, I think Edmund Metcalfe has a good point. I've mentioned this a couple of times over the years but there was a quite famous business book that came out in 1991 called "Crossing the Chasm, Marketing and Selling Technology Products to Mainstream Customers".

    The key point (as I remember it) relates to the analogy of building a bridge across a chasm. You start by getting a rope across then use that to expand.

    In practice that meant that you often had to get into your customer's business to some degree (you'd later spin off or get out of that business) in order to demonstrate the value of your product and maybe even make some money.

    So, what this means is that Axion should have gone out and found partners and built some revenue generating projects. Co-generation facilities were often built under this model. I think the chemical industry was big into this model.

    Hindsight is 20/20 of course, but it is clear that Axion thought they could bypass this route because of the interest shown by BMW and Norfolk Southern. JP himself dismissed this approach because he thought it was too expensive which was in effect the same thing.

    In retrospect, a couple of years ago, instead of Fedexing my resume to Vani Dantum along with a rewrite of the investor deck (zero response - and that was maybe six months after having a 20 minute conversation with the man at the Axion Annual Meeting) I should have just gone on Amazon and sent all the members of the executive team and board of directors this book or rather the cliff notes version of the book. Of course, I won't lose too much sleep over this because we all know no one would have read it.

    JP actually has another bite at that apple in a manner of speaking. This is exactly what ePower should be doing. If I had some real money I'd go out and buy a small trucking company with old trucks that is barely breaking even. I'm sure you could find many such companies within 100 miles of ePower. You then rebuild the trucks and you are off to the races. No doubt Jay couldn't and would probably hate the idea of managing a trucking company. He shouldn't. You keep existing management in place. Remember this isn't a turnaround. The idea is to change only a single variable to prove the value of the truck and that it is operationally feasible, not to maximize the value of the trucking company.

    Sure, it'd take capital but it would give the company control over its own destiny and in the end would get where it is going more quickly with less capital burned. This isn't rocket science. I think there are lots of institutional investors who'd get it if the presentation was done correctly.

    Apr 18, 2015. 11:44 AM | 11 Likes Like |Link to Comment
  • Axion Power Concentrator 395: Apr. 8, 2015 [View instapost]
    I'm pretty sure the past few days are a few hedge funds playing ping pong with the stock. If you squint a bit, we had a little bit of Indian Summer in January when the stock recovered about the same percentage amount it has in recent days on higher volume before continuing its incredibly steady decline.
    Apr 14, 2015. 10:04 AM | 4 Likes Like |Link to Comment
  • Why Truckers Are Slow To Embrace CNG Fuel Systems [View article]
    John: Not to be aggressive, but you only addressed half the question. I can completely understand the logic for having a more general approach. That leads to the obvious question of why they make a distinction with CNG? Why should the trucking company even report that they are using a CNG truck?
    Apr 14, 2015. 09:55 AM | 4 Likes Like |Link to Comment
  • Why Truckers Are Slow To Embrace CNG Fuel Systems [View article]
    I find this a little confusing. So, the client doesn't pay for fuel actually purchased or used, but instead some calculated amount? That is, a 900mile route would be reimbursed for 150 gallons x the price per gallon regardless of actual use/purchase? This implies that it would NOT have to be identified as a high efficiency vehicle while the carrier would have to report the use of a CNG vehicle and use a separate CNG price scale?

    Doesn't that seem a little bit odd? I would think that this will evolve in one of two ways. Either the trucking companies have to report actual fuel use data (either through the driver's gas purchase card or onboard tracking integrated with GPS) or the fuel subsidy will be standardized around diesel and some assumed MPG in order to encourage companies to adopt any sort of efficiency solutions and alternate fuels.
    Apr 13, 2015. 04:42 PM | 7 Likes Like |Link to Comment
  • Axion Power Concentrator 395: Apr. 8, 2015 [View instapost]
    http://seekingalpha.co...;app=1&uprof=45

    A new John Petersen article on Seeking Alpha. I'd describe it as an indirect promotional piece for ePower vs. CNG. Still, worth reading.
    Apr 13, 2015. 04:19 PM | 3 Likes Like |Link to Comment
  • Why Investors Shouldn't Worry About Explosive New Drug Pricing: Maxim's Jason Kolbert [View article]
    Do read the disclosures. Life Sciences Report is from a promotional company that is promoting many of the companies listed. Likewise, almost all the companies receiving positive mention are Maxim clients are listed as future Maxim clients.

    NWBO and TiGenix and it shouldn't need to be stated, Neuralstem are not clients of these two companies.
    Apr 10, 2015. 01:33 PM | 3 Likes Like |Link to Comment
  • Axion Power Concentrator 395: Apr. 8, 2015 [View instapost]
    iindelco, I agree with your speculation that the volume could be from a burst of B warrant conversion due to concern about the authorized share limits. Still, you'd think that such volume would dramatically drive the price down. I'm wondering if this volume is from two hedge funds cooperatively trading back and forth trying to create the appearance of momentum while their "marketing department" that is the folks Mr. Investor lists, promotes this momentum in the hopes of getting folks to buy in to the frenzy and soak up shares from additional B conversions.

    I suspect this activity will slow down once Axion announces that it has issued more than 75m shares.
    Apr 10, 2015. 12:08 PM | 9 Likes Like |Link to Comment
  • Axion Power Concentrator 395: Apr. 8, 2015 [View instapost]
    Bob, I hope you don't mind if I use your numbers to lay out my view of what happens next.

    I think what happens here is that the group of B holders (I'll call them the 'wolf pack') is following this script.

    First, they convert a steady stream of B warrants into shares that they sell into the market to drive the share price down sufficiently to hit the limit of shares outstanding.

    Best is to make the decrease very steady and linear so that each conversion and sale is profitable. Nevertheless, they have to drive the share price down far enough and quickly enough so that their remaining B warrants can be converted into enough shares to more than cover the authorized share count.

    Since they are converting warrants to sell into the market to drive the price down they need to get to a price where their remaining warrants convert into more than 75m shares needed to take control of the company (556,000 B warrants at 135 share per warrant).

    In practice, they also need to allow some wiggle room to account for B holders who are not part of the wolf pack.

    If desired, the remaining 344,000 warrants can be used to vacuum up the company's remaining cash as Bob describes to force the endgame sooner rather than later, which is the wolf pack taking over the company. Presumably, the quicker that happens the higher the price they can get when they flip the intellectual property.

    In any case, as a backup, they will also want to maintain some number of B warrants because their mere existence will prevent the company from raising any outside moneys for the next 12 months. This effectively isolates the company long enough to ensure the completion of the rest of the plan.

    To me, there is absolutely no way out for us. The wolf pack has won. The only possible "hope" we have is if the wolf pack decides they want to take advantage of us Axionistas again and refloat the company. I think they'll choose the quicker and more sure path of flipping the intellectual property to a JCI or Exide or some Chinese company.

    It's over. I do agree though that there is plenty for us to learn from this. To me, it becomes all about the quality of the financing. A company that can raise money on favorable terms demonstrates that it has convinced "experts" to compete for the opportunity to provide it money. Axion may have fit into that category five years ago, but the last two financings demonstrate beyond a shadow of a doubt that that hasn't been the case for several years.
    Apr 9, 2015. 11:53 PM | 12 Likes Like |Link to Comment
  • Axion Power Concentrator 394: Apr. 2, 2015 [View instapost]
    Thanks very much APH. You've done a great job and have helped a lot of people get a valuable education.

    I've lost a heck of a lot of money on Axion. It's extremely painful for my pride but likely not material to the well-being of my family. I hope that is also true for Rugged and the others who haven't announced their very large investments.

    I would like to see the APC continue but in a highly structured way. Ed Buiel's visit was valuable and I hope over the coming months more info will come out from other involved parties. All the other personal attacks and sanctimonious chest thumping is just getting in the way.

    There's a lot to learn in this situation and it's a shame the APC won't be around to make this valuable contribution.
    Apr 4, 2015. 10:10 AM | 13 Likes Like |Link to Comment
  • Axion Power Concentrator 393: Mar. 26, 2015 [View instapost]
    Articula: I grew up in Western Springs.
    Mar 31, 2015. 07:26 PM | 1 Like Like |Link to Comment
  • Axion Power Concentrator 392: Mar. 14, 2015 [View instapost]
    I think the chairman was trying to be a decent guy and communicate something. At least he was straightforward and acknowledged that a deal was very unlikely in the short-term.

    Being more analytical, maybe he was trying to flush out as many B warrants as he could. I suspect we'll see an uptick in volume over the next week, but I don't think it'll matter.
    Mar 17, 2015. 09:41 PM | 7 Likes Like |Link to Comment
  • Axion Power Concentrator 392: Mar. 14, 2015 [View instapost]
    The bottom line is that even at current prices pre-B shareholders roughly 7m shares are now worth roughly seventy thousand dollars. That number is for all practical purposes the same as zero.

    There is no way that the B holders will entirely clear their inventory. They will hang on to some percentage of the total through Axion's next financing window since that will come before the 15 month duration of the B's, which will force the company to submit to yet another financial rape by these same "investors". No sane person would give Axion a dime if there are ANY B warrants still outstanding. So, that means that Axion either shuts down operations entirely and waits out the 15 months or makes another deal with these guys.

    The shareholder letter just told us that there will be no rescue. The B holders have won the day in spectacular fashion as they have made their money and will still have enough B warrants to take full control of the company and realize all the gains from the eventual liquidation of the company to boot.

    Management was completely clueless on the financial and legal side.

    We should continue to monitor this board to learn from this debacle but we all are powerless here. The only thing we can do is wait for the hedge fund running the B play to consummate its control over Axion and either sell the company in a private sale or re-IPO the company. The only drama left here is how long it'll take Axion's management to figure this out or if they'll hold out to the last moment waiting for a deal from some white knight.

    I'll bet this hedge fund has already started discussions with potential manufacturing partners. I imagine them saying "why negotiate with Axion for a license when you can just wait a couple of months and get the whole company for $5m." That $5m would give the hedge fund at least a double and probably a triple or better.


    Mar 17, 2015. 06:46 PM | 15 Likes Like |Link to Comment
  • Axion Power Concentrator 391: Mar. 01, 2015 [View instapost]
    EM: I think the problem with the class 8b truck vs. 8a is that the ePower solution is underpowered for the 8b's which generally involve heavier loads. I believe the issue (and I'm not sure this is me reading between the lines or it was stated) is the electric motor which is size limited to the space available within the frame of the truck.

    So, I like ePower's focus on the fedex shippers (packages are very light relative to their volume) and also hope they can make some progress in the European market where the long-haul trucks generally carry lighter loads than they do in the U.S. and fuel prices are much higher.
    Mar 4, 2015. 11:13 AM | 3 Likes Like |Link to Comment
  • Axion Power Concentrator 391: Mar. 01, 2015 [View instapost]
    Mr. I. and NGS: I actually have a more positive view about the prospect for future funding even in the absence of significant sales. I agree there needs to be some sales but the operational debut of the bysolar project and maybe one or two other small projects might be sufficient in my mind.

    What I'm thinking is that IF there is no B warrant overhang or other financial chains AND the company has its quarterly burn rate down to the $500k range then a $4m raise on say a $10 or $20m valuation would give the company two years of survival.

    That's a different story from the past two raises which each provided a year (or less in the case of this most recent financing) of burn at the then current burn rate. This is a significant factor in the valuation and will help attract a better quality source of funding.

    Also, maybe the $4m-ish number is small enough that it might be more accessible for smaller funds and family offices.

    Of course, Axion's sordid history is a much more powerful countervailing factor.

    While I was writing the earlier post I kept thinking: Why the heck did I make that buy last week? So, for whatever it is worth, I did resolve to hold off on any further Axion purchases until it is very clear that the B warrants have all been exercised or expired.
    Mar 3, 2015. 02:48 PM | 5 Likes Like |Link to Comment
COMMENTS STATS
555 Comments
165 Likes