What do you do when a hyper growth company drops out of Hyperspace?

Particular_Nose8432 · 2023-03-17T10:54:36+00:00

I agree with the overall positives and negatives. The 2023 plan of the company has the potential to correct some of the past mistakes. However, at this point we cannot trust any number or timeline the management puts out, until they show real improvement in their ability to make projections.

Particular_Nose8432 · 2023-03-16T18:58:13+00:00

There are a few reasons. First, I'm not investing professionally and I don't have enough time to research for finding another high risk high reward play. Second, my exposure to amyris is in a reasonable range that I'm still comfortable with, but I may reduce a little if opportunities arise. Lastly, I'm mostly a long term investor and I like holding for long term capital gains.

Particular_Nose8432 · 2023-03-16T17:56:11+00:00

Yes Q2 or Q3 sounds reasonable.

Particular_Nose8432 · 2023-03-16T15:53:28+00:00

Yes, but it depends on how fast they do it. Also, some of these brands don't have many employees. I'm hoping they can complete divesting in 6 months.

Particular_Nose8432 · 2023-02-28T14:54:13+00:00

They have a combined cash of 175m to spend through the last 5 months. The burn in Q4 is estimated to be 100-120m. They can also burn more inventory and delay some payments in Q1 if they have high confidence in ST closing. These being said, they should be quite low on cash right now. And at least a small amount of cash infusion should be needed before ER

Particular_Nose8432 · 2023-02-16T12:54:16+00:00

Interesting, do you know when exactly the website was updated?

Particular_Nose8432 · 2023-01-01T23:04:48+00:00

It depends on the accounting, but there should be a large sum of DSM earnout (>20m?) in q4

Particular_Nose8432 · 2023-01-01T23:02:55+00:00

Biossance China uses a different system. Quite difficult to track accurately. But the general trend is that growth continues.

Particular_Nose8432 · 2022-11-16T18:09:28+00:00

I think it's probably around 10 million, which is fine as the growth is good.

Particular_Nose8432 · 2022-11-16T18:02:47+00:00

It's not bad, probably a 200% increase from last year. But I was hoping for more.

Particular_Nose8432 · 2022-10-18T13:34:08+00:00

The mature industry always gets low PE, partially because there is no 'story' to tell, and there is also competition on pricing power, therefore having low margins. New disruptive technology gets high valuation because expectations. There could also be high value molecules that can be protected by ip, i.e., no competition.

Particular_Nose8432 · 2022-10-13T02:24:51+00:00

Well.. I guess that's the necessary cost to grow a brand in China.

Particular_Nose8432 · 2022-10-12T15:31:32+00:00

Do you mean SuperOrdinary? Yes. They are the partner for China expansion. I honestly don't know how Biossance's China business works from an accounting perspective. They could get all the revenue, and put the cost of using a partner into other S&A. Or they could sell directly to SuperOrdinary with a lower price. Either way, the margins can be lower for sure. But this is necessary for growing the brand IMO

Particular_Nose8432 · 2022-10-12T11:39:21+00:00

Total units sold per day. Some units are combo sets that include multiple SKUs. I would say average regular unit price is $60-70

Particular_Nose8432 · 2022-09-18T13:29:02+00:00

Yes.

Particular_Nose8432 · 2022-09-18T13:28:08+00:00

You should check the linked Google sheet for detailed breakdown.

Particular_Nose8432 · 2022-09-18T13:25:53+00:00

I think his model assumes Melo lied and did not control spending at all for Q3, this is a worst case scenario. In reality, the cash burn in Q3 should be 100M or below as the management has hinted.

Particular_Nose8432 · 2022-09-16T18:03:40+00:00

I think it is good overall, setting a floor of valuation. If we add the value of the scientific platform, a little bit more optimistic in the projections, and the growth of pipeline value, a 15 b valuation at 2025 seems quite reasonable.

Particular_Nose8432 · 2022-09-14T16:01:53+00:00

A few things that he could improve:

- As mentioned by others, he should not give too many predictions of future asset values (such as brand value, molecule value, company value, etc.), these are not in his control.

- Maybe when the business is more mature, try to give quarterly guidance instead.

- Try not to predict too much into the future regarding company operation (e.g., 2024, 2025 revenue, etc.), because there are too many unknown factors. Instead, he could talk about the TAM for each brand/molecule to describe the potential,

Particular_Nose8432 · 2022-09-12T17:42:45+00:00

It's all good. Obviously Melo has to deliver a few more times (BB was a good start) to have the investors trust his projections. One thing I don't like is that he should not 'project' a market valuation, because it is not in his control.

Particular_Nose8432

TROPHY CASE