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Flickers of Life - (VDTK)
18/5/2020
(119264)
Flickers of Life
The share price of Verditek (VDTK) is starting to flicker back into life. It closed today at 3.4p, up 1p from the original recommendation in mid-February. The number of trades has risen into the twenties and almost 2m shares appear to have been bought, with what looks like a balancing 2m sale at 3.2p – a storm in a thimble, really, but an encouraging surge in interest for those brave enough to gamble so far.
The new action follows a management revamp and a new £1m funding at 2.5p earlier this month. Rob Richards, who joined as commercial director on April 14, was quickly promoted to chief executive, while Geoff Nesbitt steps aside to become chief technology officer.
Those close to the company present it as a tale of the boffin – Nesbitt will concentrate on advancing the business with partner Paragraf – giving way to the salesman. Richards has extensive experience in the oil and gas industry, but talks now of the enormous shift taking place from burning hydrocarbons to using solar power. He sees major opportunities for Verditek’s ultra lightweight flexible solar panels.
The expectation is that he will manage to pull in quite substantial orders over the next few months. If he does, that should transform the outlook. The company has a production facility in Italy, and appears to need relatively modest volumes to break into profit. Richards is backing himself by holding 2m shares.
The hope is that while he can pull in orders for the lightweight solar panel, Nesbitt will help speed progress with Paragraf on the world’s first graphene integrated photo-voltaic cell. That is said to be well advanced, and if successful could open a vast market, leading to solar-powered personal computers and much else. That would blast Verditek into an altogether different league.
There is much more on Verditek in my earlier comments which can be found by putting VDTK into the panel at bottom left of the front page. At 3.4p, Verditek is capitalised at under £9m. If Richards can start pulling in solar panel orders quickly, it is undervalued. If the Paragraf project should work, it is grossly undervalued.
Be warned, however. Thus far it has been making losses and living hand to mouth with regular shares issues to raise small amounts of money. As Richards stepped up, the company raised £1m by issuing new shares at 2.5p. That ought to provide breathing space through the summer while he hunts orders.
It is probably no coincidence that trading in the new shares started today, and someone appears to have sold 2m in one trade. A nice 0.9p turn if you can get it? Maybe. It emphasises that the risk/reward ratio here is high.
I have a holding in Verditek.
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