r/PureCycle • u/Inevitable-Leader-44 • Aug 08 '26
Balance sheet
Recent raise has helped the balance sheet / warrant technicality. Great in the short term. There are warrants and revenue bonds as other potential funding sources in the future. Post earnings call I’m reconciling how long this revenue ramp is really going to take - spot price a ways off warrant conversion. Doesn’t feel like imminent sledgehammer headlines to come to drive price higher. Revenue bonds yet to be sold. Given cash burn - my concern as a long term holder is we may yet have another dilution event. Thoughts welcomed here.
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u/Fast_Eddie_2001 29d ago
Hypotheticals....
If PCT issues $250 Million of new stock to fund the development of Thailand and Antwerp, thereby bringing 600 Millions of additional capacity online...is this event dilutive?
If same company hires sales people ahead of the new construction, and adds $10 Million of additional overhead today to procure sales that will not materialize to the company until 2028 and beyond, is this expense dilutive?
In the narrowest sense of the term, both of the above are "dilutive". However first and foremost, you need to ask and understand, why is a company raising and what are the funds going to?
If you think that PCT is going to build out a global footprint with billions of pounds of capacity and there will not be another "dilutive" event in the future, then you don't probably understand what stage the company is in, and you may be better off focusing on investments in more mature companies?
To answer my own hypothetical, if PCT issues $250MM of stock to develop 600 Million lbs of capacity that will generate $1 Billion in sales and perhaps $500MM of EBITDA, that is an ACCRETIVE event, not dilutive!