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Ideal Power (IPWR)

Discussion in 'Member Recommendations' started by vidarslien, Aug 6, 2014.

  1. izzyzz

    izzyzz New Member

    Location:
    Canada
    Mercedes Benz Energy is rolling out North American energy storage products in April/May. While they're rumoured to have Eguana inverters inside (EGT has been trumpeting about German Automotive Subsidiary for months now and has reported concrete $$$ for first shipments on last QR), there are multiple lines of products for different markets/applications and IPWR has mentioned shipping prototypes to MBE on last two QR calls. In any case, the entry of another major player into North American market to compete with Tesla should put a spotlight on the entire sector. It's a good development in my books.

    http://www.utilitydive.com/news/mer...-to-get-ahead-of-energy-storage-curve/439093/
    vidarslien likes this.
  2. vidarslien

    vidarslien Well-Known Member

    Location:
    Norway
    Hmmm....
    Ideal Power just filed an S-3 with the prospect of selling an aggregate of 12m shares for total proceeds of $35m - a significant raise, not to mention dilution, and especially considering the recent $15m private placement. Very painful raise at these levels, but something must definitely be up.
  3. vidarslien

    vidarslien Well-Known Member

    Location:
    Norway
    After more careful reading, it turns out that the S-3 only concerns the recent private placement. However, it shows that while the original placement was for an aggregate $15m, the associated warrants could eventually bring the total proceeds to close to $35m.
  4. vidarslien

    vidarslien Well-Known Member

    Location:
    Norway
  5. vidarslien

    vidarslien Well-Known Member

    Location:
    Norway
  6. vidarslien

    vidarslien Well-Known Member

    Location:
    Norway
    New update (8th May) available for the proposed SGIP projects including projects proposed in the 2017 round.
    Tesla is the largest player by far, with a lot of proposed projects in all the four regions, but with a large amount of residential-scale projects.
    However, in one of the four regions also Ideal Power partners Stem, Sharp, JLM and Lockheed all have quite a few proposals totaling several MWs. Even Ideal Power themselves are listed with one 120 kW project!
    If I get the time, I'll run through the numbers and add them together for each partner. However, Stem has some 15 kW projects and a few larger projects of 350 kW. I doubt they will use Ideal Power converters on those systems.
    It is clear that sonnen is so far only doing residential-scale projects, while Gexpro is not listed with any projects. But maybe Gexpro is not doing projects themselves and that rather some project developers deploy Gexpro's systems?? LG and LG Chem is listed with many projects, but most of them are residential scale.
  7. vidarslien

    vidarslien Well-Known Member

    Location:
    Norway
    izzyzz likes this.
  8. vidarslien

    vidarslien Well-Known Member

    Location:
    Norway
    A sobering comment on YMB argues that it doesn't look good that the VP of business development departed in a mutual agreement on June 2nd - during the period in which they were supposed to be closing the MPA with NEXTracker. Is there any connections? Hmmm.
  9. izzyzz

    izzyzz New Member

    Location:
    Canada
    I'm starting to have 2nd thoughts about IPWR due to a string of recent developments from Eguana (EGTYF). I really hope this NEXTracker deal has some tangible revenue attached to it. I'm neither bullish nor bearish, given sp is near all time lows, but starting to think that my money could be better used elsewhere. Will sleep on it and decide tomorrow. <sigh>
  10. izzyzz

    izzyzz New Member

    Location:
    Canada
    Sorry to say it, but I am out. Selling at a loss and putting proceeds into competitor EGTYF and other plays. Main reasons:

    - I see Eguana reporting record 8M order book with volume shipments to Hawaii and Australia. IPWR meanwhile announces partnerships and pilots with no revenue attached, says Australian market is "delayed" on QR call.
    - Eguana receives tangible revenue from contract with German automotive subsidiary which it cannot yet name due to NDA. IPWR talks about sending samples to Mercedes Benz / Daimler. Which one do you think is getting the business?
    - Badly timed PP by IPWR management really screwed up the long-time stock holders with sp tanking 50%+ while they waited and everyone knew it was coming.

    I still think IPWR has potential, I just do not see a good risk/reward here. Best of luck to everyone!
  11. vidarslien

    vidarslien Well-Known Member

    Location:
    Norway
    Given the risks, I understand that you take the money off the table and rather bet on another horse.
    However, with that said, I must say that I think the Eguana balance sheet looks pretty appalling as well. They lost 2/3 of their cash position during the last 6 months alone, and they now have larger Accounts Payable than their cash position. But hopefully for them, revenues will soon start ticking in.

    There seems to be a binary situation coming up for Ideal Power in the coming months, with two major catalysts:
    1. The NEXTracker deal
    2. The BTRAN development
    If both these two fail, I think the share price will continue to drop maybe to sub-$1, but perhaps not in a free-fall, as a fail is seldom announced but rather first more and more anticipated and eventually everyone realizes that they have failed.
    If, however, both catalysts occur, I foresee two "explosions" in the share price, both potentially pushing it 50% higher at an instant, and eventually probably 2-300% higher during the course of a few months.

    The good thing about binary events is that it feels like winning the lottery when you come out at the positive side. The negative thing, though, is that it is often more gambling than investing and also more often than not you come out at the loosing end. Hence, it is understandable to take the money off the table and wait for clarifications, and certainly, one should only put money that one is prepared to loose on such bets.
  12. vidarslien

    vidarslien Well-Known Member

    Location:
    Norway
    The MPA is signed:
    http://m.nasdaq.com/press-release/i...-for-solarplusstorage-products-20170710-00540

    It is reassuring to see it signed, after people started to fear that the deal was off because it was seemingly delayed. However, no further details on volume was given, neither any details on the licensing agreement. Furthermore, it says nothing about upfront payments, so the deal probably don't have such a clause. These points may be the reason for the rather modest pop yesterday.
  13. vidarslien

    vidarslien Well-Known Member

    Location:
    Norway
  14. vidarslien

    vidarslien Well-Known Member

    Location:
    Norway
  15. vidarslien

    vidarslien Well-Known Member

    Location:
    Norway
    Wow! Huge spike in volume today: the stock is up some 10% on almost 10% of float - more than 25 times the avg volume!
  16. vidarslien

    vidarslien Well-Known Member

    Location:
    Norway
    Ideal Power hosted their quarterly conference call yesterday, and in fact, it was the first I've ever listened to live!.
    However, I think the call was a bit disappointing, but that was just in line with my expectations.
    What I found most disappointing, was the development, or lack thereof, on the BTRAN. Indeed, they are at the same level of progress as last time, although that is a full 3 months ago. I am not saying that they haven't done anything, but the process of ironing out the production process obviously takes so much longer that they are still at that stage, waiting for the device to be ready for testing, although they claimed that was "weeks away" 3 months ago.

    However, I think that the mngt. seems to be skilled at maneuvering the company through the difficult waters that is the energy storage business.This is not new, though. Dan has talked about how they are focusing their efforts towards where they see that they can bring value - and that they need to - on almost every call since 2014. Hopefully, though, they will finally have some luck with respect to the market developments this time.

    The NEXTracker deal sounds very promising, and I liked that Dan, although he could not disclose any numbers, pointed to the numbers being touted by NEXTracker in the media, and that they are very optimistic and confident on behalf of their Fusion Plus system and its anticipated growth rate. The only downside here, is that it will virtually make Ideal Power a one-customer company, which is not a good position to be in. However, it is far, far better than being a virtually "no-customer company".

    One funny thing, is that they were asked whether any of their partners were among the 20 or so project developers that have received a funding reservation under the SGIP, but they were unable to answer. Well, I can answer that: as of a few weeks ago, Johnson Controls was the only to have reserved funding for Large-scale storage. But as of this week, also Stem has a few projects that now have funding reserved. I.e., yes, Ideal Power partners are starting to get funding through SGIP. (Note also that projects dating back to 2015 and 2016 are now starting to get their funding reserved as well, so we might even expect some movements from that as well - in fact, I suspect that that may explain the MW-order recently, as GreenCharge has several 2015-projects that are now seems to be nearing final approval by the SGIP).

    To sum up, it was a disappointing quarter both in terms of financial results and with regard to progress with the BTRAN. That may put a weigh on the share price. However, the market is always forward looking, and I'm pretty sure this quarter represented the bottom in terms of revenue, and thus also EPS. Hence, $2 may also be the bottom in the SP, reflecting that the market has anticipated that Ideal Power is close to the bottom right now, i.e., close to the turning point. Also the fact that they have now written down both legacy inventory and backlog, is a big positive going forward. From now on, I expect significant growth through 2017 and further into 2018 and beyond. Thus, it may be that the market will already now start to bid up the SP. And if not now, then most likely 3 months from now when the Q3 results are ready and sales are rolling in bringing visibility to Q4 outlook.

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