Shorters. Bashers. Assholes.
That’s a selection of some of the choice comments we received from bagholders when we posted our story on Saint Jean Carbon (SJL.V) last week, right as it was shooting the moon and jumping 400% to $0.335, shortly before it all fell to pieces and crashed heavily to earth like a North Korean rocket.
We didn’t help SJL’s situation. In fact, we caused it.
Our article pointing out that SJL’s Panasonic off-take deal claims were bullshit drove through the heart of its share price like a samurai sword shot out of a rail gun.
Company CEO, Paul Ogilvie, commented, “After more than two years of working on material specifications, sampling and re working, we could not be more pleased than to finally ship finished material to our customer. The order is part of an offtake agreement to supply multiple tonnes of anode material monthly for a number of years. We are hopeful that the electric car business continues to grow at this rate; as that will continue to push our demand and create more and more opportunities for us. We consider today as our greatest accomplishment; to be recognized and awarded with an order to supply one of the world’s best technology companies, is a tremendous accomplishment for the team.”
Yeah, but no.
Sounds great, but try as we might, none of us in the Equity.Guru offices could find details of the deal. No totals of what had been sent, if it had been paid for or what the actual timetable of the off-take agreement was or even an approximate total of what the deal itself might bring.
Usually, when a deal like this is struck, the big player prevents the little guy from using their name, specifically to avoid situations where someone ‘passes off’ on the bigger player to do something like, oh, I don’t know, jack their share price?
I can confirm that a lot of companies have ‘talked’ to Tesla about getting their lithium, cobalt, manganese, copper, unobtainium, and graphite into a Powerwall or a Tesla battery or a SpaceX battlestar, but none have been allowed to name the company in a news release saying so.
If one were jaded, one might interpret this supposed Panasonic deal as being no ‘deal’ at all, or that a minor marketing discussion is being sold to the market as a bigger partnership. That in fact, Saint Jean Carbon is sending a batch or two of samples that, if they pass muster could lead to a deal down the line, but also might not because graphite usually makes good pencils and rarely makes good cellphone batteries.
Today, Saint Jean admitted the deal was not as they stated.
At the time of the March 3 Press Release, the Company was proceeding on the basis that Panasonic and Saint Jean were working together to finalize the proposed offtake agreement. The Company was informed by regulatory authorities on March 8, 2017 that Panasonic had advised them that it was considering cancelling the Order and that Panasonic did not intend to enter into the Company’s proposed offtake agreement.
And, oh yeah – now there’s no deal at all.
On or about March 13, 2017, Panasonic advised the Company that it will not sign the Company’s proposed form of offtake agreement. When Panasonic reconfirmed its Order by email dated March 15, 2017, it also confirmed that in case of mass purchase of Anode Material from Saint Jean, Panasonic will do so under its own form of standard purchasing agreement. Even though Panasonic is proceeding with the [5kg] Order, there can be no assurance that Panasonic will proceed with a large purchase of Anode Material from the Company, nor that Panasonic will enter into any other type of commercial agreement or arrangement with Saint Jean.
No assurance? Oh, I think we have assurance that the 5kg of someone else’s graphite that Saint Jean mailed out will be the last such order they’ll be asked to fulfill.
Saint Jean’s stock price has plummeted today, down 47% to the level it was at before it tried to pretend it had a gamechanging supply deal with a major player in the battery space.
And going forward, I can’t imagine any other player is going to touch Saint Jean with a barge pole. Investors shouldn’t either.
Well played, regulators. Well played, Panasonic. How you like me now, baggies?
— Chris Parry
FULL DISCLOSURE: We told you so.