MKTY (Mechanical Technology) $8.10
MKTY’s Subsidiary EcoChain.
MKTY files for an Up-grade to a higher trading platform and a $12 million dollar offering. Both events are positive in spite of the share dilution.
The upgrade to a higher trading platform will provide 1) better liquidity and 2) allow institutions with trading platform restrictions to enter the shares.
There is no way to measure the “valuation target” for the stock price because the company “operations” as is, would be fairly priced in our opinion, between $50 to $100 million market cap. At $8.10 the market cap on shares outstanding is $80 million market cap. The shares are up from $0.70 from August 2020. A twelve million dollar raise, from a $6.50 offering would be about a 2 million share offering. In all likelihood the “offering will never be “public. $12 million is a tiny amount of money in today’s world I suspect one to three investors will take the deal. Probably already verbally agreed to and just waiting for the paperwork.
Announcement online:
https://www.renaissancecapital.com/IPO-Center/News/79138/Analytical-tool-provider-Mechanical-Technology-files-for-a-$12-million-Nasd
So far, MKTY is holding above its 50-day moving average. The price is highly dependent on how far into the future ‘the market” wants to look and place a value on that future. The good news is MKTY is still priced at 1/5th to 1/10th the market cap of others in its peer group. The bad news is we have no idea of when the musical chair game of pricing into the future ends. MKTY is a solid busines so survival is not an issue. Pricing and valuation is the issue.
“The Market” at different times places a Past, Present or Future valuation perspective on stocks. That is where outsized gains and losses are created. It is how you “bend time and space’ in the market. It you can move from Past (undervaluation) to a future looking over-valuation, moves like MKTY and below, NNDM, experienced, are “easy”. Hitting the timing (finding the entrance of the wormhole) is the hard part. Always remember that the worm hole in the market used to bend time and space (price), flows in both directions. Enjoy the moment, but know you are participating in a financial battle zone. The energy in worm holes can reverse at any time and the worm hole can close completely – or not. It is part of the adventure. The unknowingness of life. Enjoy the moment; but see 360 degrees around you.
SIDE NOTE on HYPER-INFLATION:
- SURPRISE! We have hyper-inflation; it is alive and with us.
It is in the stock market and beginning to be seen in the commodity market and in housing. Raw materials, as in copper, lumber – silver a little bit – platinum palladium, agriculture products but mostly in the stock market. The challenge here is that the stock market will stay strong until the day they are not. The it will be straight down in a week or two. 50% losses are and will be the norm. Do not borrow money and rotate towards deep value stocks. Focus on companies with strong cash flow and low debt – not future promises, when pulling money from futuristic, priced to infinity and beyond stocks.
- An example of a chart and what can happen in in a company like MKTY or Nano Dimension (NNDM) $11.31.
Feb 10 price $17. 77
March 5th price $6.50
While I absolutely love the story and promise of NNDM, I also believe we will get a chance to buy shares closer to six dollars. The company has about $5.75 in cash but is burning cash in operations. They plan also on acquisitions. So, in this case yes, they are healthy but not building cash. The drop from $17.77 has not yet even dipped below it 150-day moving average so technically one could say the shares are in an uptrend. I think a test of the 150-day MA is coming again.
Gave fun, be careful – have fun with your life adventure.
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* An account related to LOTM holds a position in this security.
Neither LOTM nor Tom Linzmeier is a Registered Investment Advisor.
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