Applied Graphene Materials Share Discussion Threads

[moneysage] 26/11/2013 18:39

what is a tonne of graphene worth? how do you value it if there is not established exchange market for it like other commodities?

if we can't do this how do we value the company other than based on "hope" and wishful thinking?

[n3tleylucas] 26/11/2013 11:23

bookbroker,

Isn't capitalism beautiful? A scientist discovers a new way of making a new material, get's £100,000 seed capital locally, then £1.2m locally to build a small factory... then to expand further floats on AIM to raise a net £9.9m to expand capacity from 1m tonnes PA to 8m tonnes PA, and possibly in a few years raise £7.5m to £10m to enlarge the factory to 30-50 tonnes PA? Isn't it a wonderful world when that can happen, in the UK, in England, in the North of England? Don't you agree?

Intriguing battle going on at 13.05;



15.40;





16.30... and tomorrow we'll have another round of falling resistance meets rising support!

[bookbroker] 26/11/2013 10:59

imram - you're in for a baptism of fire, this stock will be one way of destroying your enthusiasm for the stock market, a crazy price for a co. with virtually no assets, sell while you can and put your money into something like Tescao, might be falling but a nice fat yield sooner or later, you should not be speculating unless you're prepared to lose your money.

[n3tleylucas] 26/11/2013 10:58

There's a daily volume chart below the monthly bar chart in the header imran.

I also use Yahoo!Finance for historic daily volumes, unfortunately they haven't got the data up yet.

[imranawan] 26/11/2013 10:47

@N3tley Lucas

Am relatively new to the world of shares and bought in last week to agm. Where do you get the volume of trades that you cited above 650k on the 25th November?

[n3tleylucas] 26/11/2013 10:28

Good morning grafters, why's she flat-lining? Something's gotta give, soon...



Popped a couple of 'new' articles in the AGM & the General slider-files... one on a big US conference AGM will be speaking at in Dec, and one on the condoms/Gates/Manchester funding. The condoms news came out a few days ago, been reluctant to link it due to the nudge-nudge-wink-wink tone of the media pieces, but The Mancunion have reported it sensibly and accurately.

[n3tleylucas] 25/11/2013 22:04

Okay, this will bore many, apologies. What does the chart tell us? Well, the blue lines show 'support', reds are 'resistance'. Note the steep blue, rising support from Thursday through Friday, broke down to hit the more gradual rising support also from Thursday, bounced to hit falling resistance from Friday/early Mon, twice.
The rising support hits the falling resistance tomorrow. Rising support from Wednesday is around 3 1st thing, rising to 320/330 by close tomorrow, resistance above falling resistance is the high, 510... so should be another steady day!

It's the kind of chart you'd normally see over 1 or 2 years, we've seen it in 4 days.

Don't worry, I'll only do a basic chart like above if it looks interesting.

Volumes drifting? Put it into context, despite the lack of posting activity, 650,000 traded x today's av. share price 360-480 = 420 = £2.7m... The most popular AIM stock, GKP turned over around twice that today, yet it's 20 times bigger!
According to ADVFN's (closing)price v volume list, this stock was ranked 179 today. If you look at the MV of the 179th biggest UK stock it's Ladbroke @ £1.5b.
This stock isn't being posted about, but it's being traded in a very big way, relative to its MV.

Wed: 1.2m av share price 200p = £2.4m
Thur: 1.0m av share price 300p = £3.0m
Fri: 0.85m av share price 425p = £3.6m
Mon 0.65m av share price 420p = £2.7m

Shares traded daily as % of free-float? .925/5.85 x 100 = 15.8%
Shares traded daily as % of ff ex-Ruffer/SandAire/Insight? .925/2.95 x 100 = 31.3%

So based on the average volume so far, the whole free-float excluding RSI is being turned over every 3 days! Any wonder she moves?

[n3tleylucas] 25/11/2013 13:53

Patent applications have been lodged in various countries for some time, scroll down top slider for details. The process is long-winded, but various safeguards have been implemented to protect IP, see admission document in LSE slider.

The science/tech to make the raw product has been proven, and (as far as is known)is unique... as you say the next step is to work with manufacturers - as they are doing - to incorporate it into their existing processes, successfully, whilst ramping-up production & capacity.

[pyman] 25/11/2013 13:32

Is the furure not in the hands of the patent lawyers? and their ability to protect the tech here? followed by the ability of teh co to turn tech into product into profit? wish i d got in on the IPO! but now...? cracking story anyway

[n3tleylucas] 25/11/2013 13:05

The placing? What we do know... IP took the most, then Ruffer, then SandAire and Insight(BNY), then NV, and BOD took a few too, Karl sold £1m. That left just 2.9m shares for everyone else. 11m of the whole 16.8m are locked-in for 1yr. Until we see holding sales RNS's from Ruffer and/or SandAire and/or Insight we must assume that a maximum of 2.9m shares are being or are available to be traded, in reality that number could be less, assuming that not everyone is a trader.

[black bird] 25/11/2013 12:38

poor revenue so low may buy 200p better producers elswhere

[tmoon] 25/11/2013 12:23

Morning all. Did anyone manage to get shares in the IPO as both the broker and the company's advisers failed to return my phone calls or e-mail as to a copy of the prospectus and offer to subscribe.
A pretty rum do as far as I can see. Good luck all.

[phsycho] 25/11/2013 11:59

Money morning mail..

Would you like to invest in the new wonder-material for the 2020s?

A material that is extremely thin but also very strong. A material that could be used in super-lightweight planes, foldable touch-screen computers, or batteries that will last far longer than anything we have now.

Well, thanks to a newly-listed company in London, Applied Graphene Materials (AIM: AGM), you could make that investment.

But before you pile in, there are a couple of questions we need to ask. Is graphene really the wonder material it's cracked up to be? And even if it is, is Applied Graphene Materials the best company to back?
What is graphene anyway?

Graphene has been around for a little while. We've mentioned it a few times on the website and in MoneyWeek magazine – my colleague Matthew Partridge talked about it in a recent cover story.

But I suspect that many people only came across graphene for the first time last week. That's because there were two big graphene-related news stories.

Firstly, Applied Graphene Materials listed on Britain's Alternative Investment Market (Aim). Secondly – and perhaps more eye-catchingly – Bill Gates gave a $100,000 grant to scientists at Manchester University to develop ultra-thin condoms that will 'enhance sensation.'

These two stories raised the profile of a substance that certainly has plenty of potential. Indeed, as The Independent wrote last week: "if just a fraction of graphene's potential is fulfilled it will change the world."

Without getting too technical, graphene's potential comes about because it is both very thin and extremely strong. According to the New York Times, a layer of graphene stretched over a coffee cup, could support the weight of a truck bearing down on a pencil point. You have to take these analogies with a pinch of salt (what's the pencil made of?), but you get the picture.

It's also better at conducting electricity than silicon. Procter & Gamble is reportedly considering using graphene in some of its manufacturing. And Dyson is interested in using it for its vacuum cleaners - apparently graphene's ability to conduct electricity could reduce static and hence help a vacuum suck in more dust.

Graphene also has potential uses in medicine, electronics, food packaging – you name it. Governments around the world are racing to fund research. The British government has spent £60m while the EU has invested €1bn.

Sounds great, doesn't it? The big sticking point is that up until now it's been hard to manufacture large quantities of graphene. That's mainly because many manufacturers use graphite as their source material, and production costs for the stuff can be high.

How Applied Graphene Materials plans to solve graphene's big problem

However, Applied Graphene Materials thinks it can change things on that front. The company has a proprietary manufacturing process that only uses a very small amount of graphite.

Instead, an 'organic feedstock' is fed into a high-temperature reaction chamber. The heat decomposes the feedstock, and graphene is collected at the output of the chamber. This process is relatively cheap and won't create nasty pollution. All by-products from the process are water soluble and non-toxic.

Currently, Applied Graphene Materials only has the capacity to produce a tonne of graphene a year, whereas at least one rival company can produce 80 tonnes a year.

So Applied Graphene Materials' move to list on the stock market makes sense. The listing raised £11m for the company. This will fund an expansion in capacity to eight tonnes a year.

The listing price was 155p a share which valued the company at £23m. But in a frenetic first week of trading, the share price soared to 471p on Friday evening, which means the company is now valued at £80m.

So is that a fair valuation? Bulls will point to graphene's potential and to estimates that the global graphene market could be worth as much as $1.3bn by 2023.

But on the downside, Applied Graphene Materials only generated £11,000 (yes, eleven thousand pounds) in revenue last year. So to justify its current market capitalisation, it's going to have to get a lot bigger, a lot faster.

Maybe that will happen. But the fact is that it's extremely difficult to value a company at this stage of its development.

I'm satisfied that graphene itself probably will become a widely-used material, so I can understand why investors were so keen to buy shares last week. They want exposure to what sounds like a very exciting story.

But my problem is that I can't say with sufficient confidence that Applied Graphene Materials will be a major player in this industry. Its manufacturing process does appear to have potential. But it's just too early to give anything like a definitive verdict.

So I'd rather wait until we have a better idea whether Applied Graphene Materials really will be a winner in this sector. The shares may well be more expensive by then, but they will also be a lot less risky.

And that will suit me fine. I really don't want to have investments that will keep me awake at night.

Got a comment on this article? Leave a comment on the MoneyWeek website, here.

Until tomorrow,

Ed Bowsher

[jfacwc] 25/11/2013 10:27

Hi loser, you're not the only one....just the nature of the beast.back up again soon. jfa

[davr0s] 25/11/2013 09:41

Just bought backin - was always going to suffer a pullback after the meteoric rises

[1money loser] 25/11/2013 09:39

We will all be buying back in at the ipo price at this rate! The profit I made on Friday, I've lost today out of my greed, serves me right for buying back in, the username advfn is perfect for me.

[n3tleylucas] 25/11/2013 01:04

Thanks b,

It's a very newsy stock in an incredibly fast moving sub-sector... sliders are the only answer or the header will soon be 6 foot long.

...and thanks to leedskier over on GRPH for giving me the slider idea and the HTML codes.

In case anyone wonders what the slider boxes are all about... the top one is basically the company/Karl, the product and (some of) the technology behind it. The bottom 3 are simply - 1) stock market announcements, key shareholder info inc. liquidity/dilution and other info - 2) Specific AGM online (free) local, national & international media news links - 3) General up-to-date graphene news ie I'm not going to put up every historical article on graphene... use google for that, but when new news is released, that's interesting, I'll link it up and date it.

There was a subscription piece in the Sunday Times, from the bit available for free it seemed to be focusing on Karl's stake and the £1m of shares he sold prior to admission. Of course Karl is locked-in for a year, so to cash-in any of his stake before Nov 2014 had to be done before admission @155p. His remaining stake is obviously just over 10%, so valued at £8m atm.

[bamboo2] 24/11/2013 19:47

N3tleyLucas, a well organised thread header. Appreciated.
Really well done.

[n3tleylucas] 23/11/2013 20:32

It's not for me to defend or promote the stock market valuation on any given day, that's for the market as a whole to decide. What I would say regarding the low graphene market numbers is that the material is at a r&d stage, it hasn't got into the mainstream yet, it's virgin territory. So, people are not basing valuations of stocks on traditional methods, they're speculating on a future explosion in usage.

As I said, one day ago it was believed graphene couldn't be used in electronics... today that belief has been challenged. How do you value a new product material maker/developer in a world where one day it's thought the world's electronic market was not a potential graphene market, and today it might be?

I'm not going to get into a 'my graph firm's better than your graph firm' because there is room and sectors/sub-sectors for everyone to potentially benefit. From STGR supplying graphite for batteries & top-down processes, to GRPH with it's oil well technologies, to CTFA with it's seed capital investment policy. There is plenty of room for everyone in such an early stage environment.

Popped all the info into sliders 1) Product & tech 2) Share details etc 3) AGM specific media news 4) General graphene news.

[jungmana] 23/11/2013 15:20

Good luck anyway. Am on sidelines for now. With this one and two other graphene companies been watching

[jungmana] 23/11/2013 15:18

No i would not have said it at 200p (about £32m market cap). as the market cap compared to potential graphene market of $195m/ year for next 5 years was about ok.

[actybod] 23/11/2013 14:27

Jung - you could have said that at 2.50, 3.00, 3.50 ... Having hit 5.00 I expect the momentum to continue next week.

[jungmana] 23/11/2013 14:09

Dont get me wrong. This was a good buy about 200p but at this price and the current stage of graphene industry. It is just too high at 470p ( £80m market cap) for new investors.

[jungmana] 23/11/2013 14:06

PLE has a bigger market for its PE product compared to market cap than AGM compared to its market for next 5 years.AGM carries very high risk at this price

[abcd1234] 23/11/2013 12:18

Jung,,some folks said the same about your favourite PLE's vertical climb ;O)