Aspen Aerogels, Inc. … today announced the pricing of an underwritten public offering of 4,250,000 shares of its common stock at a public offering price of $20.00 per share.
And so the recent decline is explained, with the current price just a tad over that $20.
In other news, GM announced and claims they are close to profitability on EVs:
Barra said GM is on track to reach its 2024 electric vehicle production and profitability targets. “This is a function of our investments in a dedicated EV platform, U.S. battery cell manufacturing and flexibleassembly capacity,” Barra wrote in her memo.
It is wild that this company just finished closing a 125M loan via a company called MidTerm with an additional 100M line of credit. Then Aspen just got approval for a 650M 30-year term loan from the Department of Energy, which should more than cover the costs for the Georgia plant.
Now on top of those two loans they are adding 4.25M shares, or about $85M worth of shares, and priced it at $20, well below market prices of $27 last week. Keep in mind 4.25M shares is more than the total amount of shares they IPO’d with just 10 years ago. This has to be one of the most unfriendly companies to shareholders that I have seen in a long time.
Additionally they have outsourced a lot of production to China and Mexico which should lower costs and they are already net income positive two quarters ago. It simply does not make sense to me they need all this additional capital and dilution. Possibly it’s to pay off previous debts they took on at poor terms for Aspen as they mentioned on the MidTerm loan call.
I agree with all the comments on the stock offering and loans make no sense to the uninformed. We must consider, however, these actions made perfect sense to management and the board, so the next conference call or announcement may turn the lights on for us.
I bought ASPN recently. Then after a little more research I sold after 2 days. IMHO, this just isn’t a good investment for a bunch of reasons, customer concentration with an uncertain future, loans on top of loans, dilution, good bye.
Company management does not issue more shares and borrow this much money without a plan for expansion. I believe this should have been released to shareholders, regardless I believe there was a studied plan.
My searches have not identified newly published actions for ASPN. Anyone have some insight?
Here is an update from ASPN’s CFO at the Barclay’s conference. It was an informative overview of the company and management’s strategy.
One interesting point was that the CFO shared that they are working to get the DOE loan approved by January 20th. The bottleneck appears to be the availability of lawyers on the DOE side. He sounded confident that the loan would be approved. Even with the new administration’s agenda, it doesn’t seem like they would want to deny the opportunity to increase manufacturing in the USA, specifically in GA, which voted Republican. However, the CFO talked about their plan B, which would be to move the manufacturing to China, which they have already done successfully with the energy portion of the business. Here is the link: Aspen Aerogels - 1698137