Trade Alert: AMTE is almost completely out of power
20th June 2023 |
Last week, AMTE Power (LON: AMTE) dropped a bombshell on the market.
After drawing on the funding they had access to in March and April, the company now has about four weeks to live.
Meaning they’re out of money and out of funding. And if within the next four weeks they can’t get any more funding, the company will probably go into administration.
The company was clearly early stage and high-risk, but the indication was they would still be progressing towards the commercialisation of their battery products with a spate of positive news over the past few months.
Well, it seems that was a bit of a smoke screen, and the reality that has now dropped on us is in four weeks the company could be dead.
Now, they might scrape together funding and survive a little longer, or they won’t and that’ll be it, the company will go into administration.
That leaves us in a sticky spot. If we exit now, the damage has already been done. If they get funding, there’s a good chance the stock pops higher, recoups some value and we exit then anyway.
It’s hard to say which way it’ll go. But it would appear that if funding is hard to get now, it’ll only get harder down the track anyway. And four weeks isn’t much time to grab a lifeline from willing participants if they haven’t been able to get it already.
And while the stock has been crushed already, it looks like the management has managed the company into the ground even with the potential they indicated was there and moving forward.
We’re taking the position that funding isn’t coming and we’ll exit the position and just get something out of this, rather than nothing at all should the company fail and then go into administration which would be a long, drawn-out process.
We’ll take a big loss on this one, but there’s little else positive that comes out of this from here.
Action to take: SELL AMTE Power (LSE:AMTE)
Entry price: 157.50p
Exit price: 10p
P/L: -93.65%
Sam Volkering and James Allen
Editors, Small Cap Investigator
