So I had a chance to listen to the QA. It is at ab
Post# of 43064
Posted On: 03/27/2014 7:01:50 PM
Re: stocks4john #6603
So I had a chance to listen to the Q&A. It is at about the 1:07 mark. RH responds to a question and says that processors #4 & 5 are 75% complete. Hooray. Does not change anything.
If I am going to postulate anything, it has to hang together. In other words, all of the data has to support the conclusion. It seems to me that JBI investors are having to string together a positive story by being selective, and they call that Due Diligence.
What has been posted is that processors #4 and 5 are worth 8-9 Million dollars, or are at least selling for that price, and that they are 75% complete. As if JBI is about to make a killing.
The biggest problem is what the word "processor" means. It might mean the equipment being prepared for installation at the fabricator, or it might mean the whole system, depending on what position is being postulated.
Using the 3-unit cluster discussed in the SAIC document, which JBI investors hold so dear, a 3-unit system costs 9 Million to build. Given my knowledge of Construction projects, JBI's end (after removing the Engineering work and Construction cost) would be 3-4 Million. And judging from what I know of the status of the "processors", which I believe are pieces of equipment, I believe the processors are about 60% complete, maybe a bit more. I know that equipment (the cost to get it custom built and shipped to the job site) is about 30-40% of the total cost of any job like this. In other words, they are 60% complete on the 30-40% equipment component of the cost. That is about 0-30%. So the percent complete is about 20-30%, not 75%. I have done exactly this kind of statusing, so I know what I am talking about.
Therefore the line in the Financial Statements about 1.2 Million having been spent on Construction in Process makes perfect sense.It is very likely that RH was talking about the status of the equipment portion of the job. The question was vague. Besides, it is common to overstate progress, especially with entrepreneurs. They are not as knowledgeable about these things.
You can believe what you want. It is all just wishful thinking and will only be more of a letdown later.
If I am going to postulate anything, it has to hang together. In other words, all of the data has to support the conclusion. It seems to me that JBI investors are having to string together a positive story by being selective, and they call that Due Diligence.
What has been posted is that processors #4 and 5 are worth 8-9 Million dollars, or are at least selling for that price, and that they are 75% complete. As if JBI is about to make a killing.
The biggest problem is what the word "processor" means. It might mean the equipment being prepared for installation at the fabricator, or it might mean the whole system, depending on what position is being postulated.
Using the 3-unit cluster discussed in the SAIC document, which JBI investors hold so dear, a 3-unit system costs 9 Million to build. Given my knowledge of Construction projects, JBI's end (after removing the Engineering work and Construction cost) would be 3-4 Million. And judging from what I know of the status of the "processors", which I believe are pieces of equipment, I believe the processors are about 60% complete, maybe a bit more. I know that equipment (the cost to get it custom built and shipped to the job site) is about 30-40% of the total cost of any job like this. In other words, they are 60% complete on the 30-40% equipment component of the cost. That is about 0-30%. So the percent complete is about 20-30%, not 75%. I have done exactly this kind of statusing, so I know what I am talking about.
Therefore the line in the Financial Statements about 1.2 Million having been spent on Construction in Process makes perfect sense.It is very likely that RH was talking about the status of the equipment portion of the job. The question was vague. Besides, it is common to overstate progress, especially with entrepreneurs. They are not as knowledgeable about these things.
You can believe what you want. It is all just wishful thinking and will only be more of a letdown later.
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