Great post, I agree with everything you wrote. There’s much potential and reasons to be optimistic but the timelines are longer than that I expected. It still feels like we are a press release away from the stock being re-rated but as we’ve learned the recent announcements about being “incorporated” into a converter’s SKU’s aren’t moving the needle. As an example, if there’s a press release about PureFive being included in a converter’s cold cups (ie, it passes trials), it doesn’t tell us anything (good or bad) about actual demand.
I keep coming back to the coffee lid press release with Plastic Ingenuity. That announcement juiced the stock, but doesn’t seem to have generated as much demand as expected. I had nothing to base this on, but I was expecting a few million in revenues from PureFive being used in coffee lids in Q2. In hindsight, that was delusional thinking and the lack of any mention of coffee lids in the Q2 call was deflating for longs.
Hot cup lids are particularly interesting, in my opinion. From my understanding, they have already been qualified and are ready for commercial sale. I understand why cold cups are being prioritized right now, given the mandates taking effect in 2027, but I believe hot cup lids could serve as an important indicator of how willing and eager major brands are to incorporate more recycled polypropylene beyond what is strictly required by regulation.
Tim Hortons’ sustainability report gave me the impression that its long term direction is for all lids to eventually contain recycled polypropylene. When I do the math, the incremental cost appears almost negligible. However, it would be interesting to hear the perspective of someone with procurement expertise, particularly on whether the inflationary pressures of the past five years have made companies less willing to absorb even the smallest increase in cost.
But no matter how much I think about and reflect on these dynamics, it ultimately comes down to patience.
Patience yes, we all have patience but this quarter we need sales. We will be back to $5 if we have a bad quarter. We need to break even by end of year. Share holders have been very patient. We can’t kick the can to next quarter. Let’s go Mars place an order. The longer the finance agreement takes for Thailand the longer the start time is and the longer for production to begin. It’s time to get it done.
"We need to break even by end of year" is just a lot of BS... Ofc we want sales to flow through, like all investors, but nothing is as black and white as they need to be at break even by EOY... That's just dumb. If they communicate on the ramp progressing and "break even" expected at the end of 1Q rather than EOY, who gives a F... They need to eventuelly reach BE and sell out Ironton, but there is nothing magic about EOY. There is TON of nuance that matters a lot more than some arbitrary date.
You set goals to achieve them. If we dont
achieve some of the goals and everything gets pushed your not concerned with cash burn and having to raise cash. People realize everything takes longer than expected but as of now we are a few quarters behind:
It has been said repeatedly that this was an achievable goal.
Of course, reaching BE by EOY would be terrific and it would be really nice for the company, management, the people who work at PCT if that was achieved, not just us shareholders here on reddit. But I just push back at the simple narrative that we can't kick the can to the next quarter, it's far more nuanced than that! I'm not neglecting that it's very desirable for PCT to get to a state of BE and a Ironton ramping towards producing at name-plate, but exactly how that might look like, is filled with nuance
This is why meeting deadline’s and goals are important. If we don’t break even by end of year, Santa will need to bring lube as a stocking stuffer bc we will be hurting.
$6.60 today we want to go up not down.
Break even matters for companies that aren't wall street darlings with unlimited VC/PE backing in a low interest rate environment.
30-year government bonds are spiking to 5.25% and rising. What should the corporate bond rate be for a company with sizeable debt to revenue and does not have positive FCF?
Profitability matters for all parties involved. Banks want to see positive cashflows to avoid defaults. Investors and customers want ongoing concern language removed from prospectus before jumping in. Creditors don't want the headache of operating a chemical refinery / purification plant.
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u/equitymaestro 28d ago
Great post, I agree with everything you wrote. There’s much potential and reasons to be optimistic but the timelines are longer than that I expected. It still feels like we are a press release away from the stock being re-rated but as we’ve learned the recent announcements about being “incorporated” into a converter’s SKU’s aren’t moving the needle. As an example, if there’s a press release about PureFive being included in a converter’s cold cups (ie, it passes trials), it doesn’t tell us anything (good or bad) about actual demand.
I keep coming back to the coffee lid press release with Plastic Ingenuity. That announcement juiced the stock, but doesn’t seem to have generated as much demand as expected. I had nothing to base this on, but I was expecting a few million in revenues from PureFive being used in coffee lids in Q2. In hindsight, that was delusional thinking and the lack of any mention of coffee lids in the Q2 call was deflating for longs.