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Message
re: Diving Deeper on Origin Materials?
Posted on 7/30/23 at 8:37 pm to GeneralLee
Posted on 7/30/23 at 8:37 pm to GeneralLee
General,
Greetings.
Do you have an updated Discord invite?
Greetings.
Do you have an updated Discord invite?
1
Posted on 7/31/23 at 8:33 am to bayoubengals88
Posted on 8/9/23 at 3:56 pm to GeneralLee
Any thoughts as to what is going on after hours. Are you still confident long term in this stock?
Posted on 8/9/23 at 4:03 pm to jerryc436
Eek
-38% after hours.
Edit: -50%
-38% after hours.
Edit: -50%
This post was edited on 8/9/23 at 4:13 pm
Posted on 8/9/23 at 4:03 pm to jerryc436
quote:
Any thoughts as to what is going on after hours. Are you still confident long term in this stock?
From the 2nd Quarter report released at the bell today...
The Company now expects Origin 2 to be completed in two phases, with Phase 1 estimated to be completed in late 2026 to 2027, and Phase 2 estimated to be completed in 2028, compared with our initial expectation for a mid-2025 completion. During Phase 1, the Company expects to achieve profitability from its oils and extractives stream. From this stream, Origin plans to produce a drop-in biofuel with potential applications including marine fuel and heat and power generation. Potential product benefits include improved energy density compared with existing renewable alternatives and the sustainability benefits of increased bio-content -- value propositions expected to be in high demand given, among other things, the decarbonization goals set out by the International Maritime Organization, a body of the United Nations. Phase 2 will expand production to include the mass production of platform chemicals CMF and HTC. Phasing the plant is intended to enhance overall efficiency while improving short-term and long-term economics.
Posted on 8/9/23 at 4:17 pm to AUHighPlainsDrifter
It looks like I jumped in too early along with many others.
Posted on 8/9/23 at 4:39 pm to jerryc436
If you are truly holding for 5+ years and DCA, this is a huge gift. It’s a gamble, but a pretty calculated bet. I’m buying and forgetting.
Posted on 8/9/23 at 4:54 pm to jerryc436
quote:
Are you still confident long term in this stock?
That's taken a big hit in the past few hours. I knew O2 would be delayed until 2026 or later, but management seemed very scatterbrained on the call just now and the powerpoint quality for the earnings update was very lackluster. It's unclear what the strategy is, these wild pivots to biofuels and FDCA without much explanation don't come off as credible. Old assumptions were for $1.1B capex and $400M of EBITDA for the O2 plant, new assumption is for $1.6M capex and $280M EBITDA, so clearly a major reduction downward.
IF this is an abandoning of the plan to build their own plants and go 100% to licensed plants, then that's a great strategy and frankly what I would do if I was CEO. But, they can't say that really yet until they ink licensing deals. I don't know how much of the ~$10B in offtake reservations is now for products that won't get made.
Not gonna lie, a disaster of an earnings call. I still think the tech could work but have much larger doubts about management now. I will not sell down here in the $2's, it'll probably see a dead cat bounce over the next month or so into the $3's and then I'll reassess.
Analysts on the call were rightfully furious at the management team for this big a shift without a good explanation for it.
Looking back, I got really lucky on SLI making all that money and then blew a small chunk of it on a biotech stock and may have blown a decent chunk of it on ORGN at this point. Thankfully I was mostly in money markets and SpaceX. Assuming this never recovers, it will be the last pre-revenue stock I ever invest in.
Best case scenario is O1 plant product starts shipping later this year and customers like the technology and we can get some licensing deals going. They maybe one of their customers will buy Origin out at a decent enough premium so that we aren't bagholders anymore.
The only path forward is licensing now. If they can't license, they'll go bankrupt. But if they can do multiple licensing deals with SCGP/Indorama and others, it could be a massive return from these levels. I just don't know what odds to ascribe anymore to those scenarios.
This post was edited on 8/9/23 at 6:28 pm
Posted on 8/9/23 at 6:46 pm to GeneralLee
O2 producing FDCA makes sense as it's higher margin, needs more limited capacity and will pay a 3-6% royalty to Avantium.
Seems to me that the elephant in the room is why nobody wants to make a strategic investment in O2 if there is $9 billion in offtake.
I'm not so sure the licensing model will be that lucrative. 5% of $9 billion is $450 million spread over maybe 4 years. If they net 25%, so $30 million, which would be high, the share price at a 25 p/e with 170 million outstanding would be $4.41. There are obviously bottle caps and other uses for the output but for the stated offtake it doesn't seem that attractive to me unless I'm missing something.
And everybody and their brother is in biofuels these days so the market could get saturated.
Seems to me that the elephant in the room is why nobody wants to make a strategic investment in O2 if there is $9 billion in offtake.
I'm not so sure the licensing model will be that lucrative. 5% of $9 billion is $450 million spread over maybe 4 years. If they net 25%, so $30 million, which would be high, the share price at a 25 p/e with 170 million outstanding would be $4.41. There are obviously bottle caps and other uses for the output but for the stated offtake it doesn't seem that attractive to me unless I'm missing something.
And everybody and their brother is in biofuels these days so the market could get saturated.
This post was edited on 8/9/23 at 6:48 pm
Posted on 8/9/23 at 6:53 pm to GeneralLee
If you guys want to feel better, ENPH was under $1 for a big portion of 2017.
Posted on 8/9/23 at 7:00 pm to Crescent Connection
quote:
If you guys want to feel better, ENPH was under $1 for a big portion of 2017.
The fully diluted ORGN cap is currently around 4.7x what ENPH was then at double the price and with uncertainty about how they'll satisfy large capital needs.
Posted on 8/10/23 at 5:27 am to Diseasefreeforall
Yeah if the economics for licensed plants are similar to the economics for the new O2 plant released yesterday, then it’s only a 17.5% ROIC. Most licensing deals have a hurdle rate on the ROIC at about 15%, so that’s not much room for profit. I don’t care about products like FDCA being higher margin (on revenues), the bigger issue is earning margin on capex $. Still digesting yesterday and still shocked.
Thinking about doubling my position here (in terms of $ invested), then selling that doubled position at a 2X in the ~$3 range in a few months, then moving on and trying to forget that I ever heard about this stock.
Thinking about doubling my position here (in terms of $ invested), then selling that doubled position at a 2X in the ~$3 range in a few months, then moving on and trying to forget that I ever heard about this stock.
This post was edited on 8/10/23 at 9:02 am
Posted on 8/10/23 at 9:08 am to GeneralLee
Woke up this morning and checked my account and OUCH!!!!! Guess I will either ride it to the bottom or see if it can bounce back up.
Posted on 8/10/23 at 9:24 am to RedHawk
quote:same
Woke up this morning and checked my account and OUCH!!!!! Guess I will either ride it to the bottom or see if it can bounce back up.
Posted on 8/10/23 at 9:28 am to RedHawk
Yikes - sold here a while back as a result of needing to free up some funds and this being my 'least exciting' spec play.
Really hard to resist buying in now....if only for a flip. That '26 timeline is a lifetime away, but it's hard to believe this won't bounce at least technically.
Really hard to resist buying in now....if only for a flip. That '26 timeline is a lifetime away, but it's hard to believe this won't bounce at least technically.
This post was edited on 8/10/23 at 9:30 am
Posted on 8/10/23 at 9:38 am to Fe_Mike
This is probably the kind of haircut SLI should get for delaying things for years, but no one pays attention to their earnings calls lol.
I do think this has a very high chance of being a good flip over the next few months. Trading for cash on hand right now, no value placed on the completed O1 plant. Management are idiots though, they need to prove O1 can work over the next few months and then sell the company to a major chemical like Dow or BASF that can actually scale this up to dozens of plants. Tech is worth billions (if it scales), but management are idiots. Take a $5-7/share buyout and call it a day.
I do think this has a very high chance of being a good flip over the next few months. Trading for cash on hand right now, no value placed on the completed O1 plant. Management are idiots though, they need to prove O1 can work over the next few months and then sell the company to a major chemical like Dow or BASF that can actually scale this up to dozens of plants. Tech is worth billions (if it scales), but management are idiots. Take a $5-7/share buyout and call it a day.
Posted on 8/10/23 at 9:45 am to Fe_Mike
quote:I sold a handful on 8/7 for $4.32
sold here a while back as a result of needing to free up some funds
Posted on 8/10/23 at 10:22 am to SuperSaint
Bought in at $1.39 and it proceeded to $1.30 within 5 minutes of my purchase. Ouch!
Posted on 8/11/23 at 9:16 am to ynlvr
Investing is tough as shite. Better to learn these perceived mistakes now than later. Glad I didn’t purchase Dec 2024 $5 calls. Not even sure if I should touch $2.5 calls. This just drives home the point that you almost always lose on options. And diversification is imperative. But it’s fun to YOLO every now and then.
Positive spin on this is I can reach $25k shares faster now. About 16k shares away.
Positive spin on this is I can reach $25k shares faster now. About 16k shares away.
This post was edited on 8/11/23 at 9:21 am
Posted on 8/24/23 at 6:47 pm to GeneralLee
General has your outlook changed much here having had a few more days to digest the pivot?
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