I had checked out Jonah’s first part of the writeup which mentioned the capital raises and it doesn’t look like the second part mentioned them again. No doubt there was a lot of good information in the write ups about Aspen, however I think the scale of the share dilution was overlooked.
Aspen started with 2.7M in shares at IPO in 2014 and now has 76M+ shares outstanding, that’s over a 28x increase in the number of shares. The last five years shares outstanding is up over 3x, and their production facilities are still not reaching enough capacity from what I understand from the last earnings report. This likely means even further share dilution to raise more as they are just getting to break even net income, as I don’t believe they can finance expansions themselves still.
I did a keyword search on Aspen’s last four earnings calls, for “shares”, “shares outstanding”, and “outstanding”. There is zero discussion in the last year for management talking about their strategy with regards to the explosion in share count. That’s a fairly big red flag to me that it’s not an open topic for them to at least discuss what their plan is going forward on share count.
Having said all that, this is an extremely promising product they have where nobody seems to have anything close to a comparable product. It was enough for me to start a small position, but after learning about the shares outstanding issue I decided to close the position.
Just to give an example how non-standard this amount of dilution is for Aspen, there is another company I’m researching Powell Industries (POWL). They are also in a capital intensive type business of building electrical substations, although not as capital intensive as the battery industry. Five years ago they had 11.6M shares outstanding and now they have 12M. This company went public a very long time ago, but I checked their Q-10 from 2003, and they had 10M shares back then.