‘We’re going to roll back the stock,’ the CEO of IBC told me.
‘The market doesn’t like that,’ I said.
‘Yeah, but we should be an institutional target, and the daytraders haven’t done us any favours’, he replied.
He was right. Daytraders had batted IBC Advanced Alloys (IB.V) about like a cat playing with a mouse for the last 18 months. I’d cover the company at Stockhouse, the stock would move hard upwards as new people learned the story, and then it would drift back as the daytraders took their profits. Then the new investors would lose their stomach for the fight and sell into losses back to those same daytraders who’d do it all over again.
IBC had a ceiling, and it wasn’t based on anything the company was doing or not doing. It was the market being dumb.
But that was then. Last week, outgoing IBC CEO Anthony Dutton (he’s not fired, he’s stepping aside for a guy with crazy great military connections) had a lengthy discussion with me on the Equity.Guru podcast about IBC’s plans for the future, his belief that the company will be profitable by year end, and the madness that had the company market cap lower than the replacement cost of just one of IBC’s pieces of equipment.
Well, it seems a lot of people listened. In fact, it was our most listened to podcast to date.
On Stockhouse, one messageboarder said of the talk, “[it] gave more info and background on their future plans for the company than I have heard from any other source.”
I agree. Dutton was on fire and made a great case for his company, and into that he enacted a 10 to 1 rollback and, as usual, the daytraders bailed, rocking the stock back from $0.65 to $0.55.
Said Dutton, “The Company believes the Consolidation will provide it with increased flexibility when negotiating financings and better access to equity markets in which to raise the capital required by the Company to further develop its manufacturing operations and strengthen business operations.”
Part of Dutton’s plans involved a reorganization of the company, bringing in a new CEO from the board, General David Heinz, while also bringing the players behind NioCorp into the fold (lots of complimentary opportunities there), and triggering a $5.5 million financing at $0.375 per share.
Today that financing closed and maxed out at $7.46 million raised, which is just about all the exchange would allow them to take over the original goal. That financing has already given those involved a double, with the stock rocketing today up to $0.78, up 41% from the previous day, and now their $0.50 warrants are extremely likely to kick in, which will likely give the company an extra $3 million or so in the bank.
Too much dilution? Nope. With the rollback, the company had just under 10 million shares outstanding. The financing drops 19 million more out there, but that’s still a crazy tight float, y’all, and part of the reason the stock is running so hard.
There has been some messageboard talk about an analyst giving the stock a $1.64 BUY target, but let me pour some cold water on that – the ‘analyst’ in question, a mob that calls itself Franklin Independent, is a website script that trawls news releases, yanks financials out of them, and puts together a robot report that looks real but is anything but, in an effort to draw page views. Ignore.
So, aside from the casual joy you get from knowing the daytraders bailed on a 41% jump because ‘ooh, rollback’, let’s take a moment to salute the General, his predecessor, and a company that has, for several years, done exactly what it said it was going to do, proven itself technologically, proven itself worthy of military supply approval, and now proven itself worthy of sales contracts.
Let’s take another moment to salute a savvy financing that will remove almost all the risk inherent in an aerospace supply startup with once-untested tech, and the balls inherent in those who stuck around when the thing was a sub-$0.10 flailer.
Canadian aerospace doesn’t begin and end with Bombardier. Canadian tech doesn’t begin and end with Hootsuite.
IBC Advanced Alloys just got legit. Happy we could be a part of it.
FULL DISCLOSURE: Not a client. Don’t own the stock. Just a great company that could use some market awareness, and a great story for our readers. Godspeed to all who sail her.
To hear the IBC Advanced alloys podcast, click here.