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Amyris Inc (NASDAQ:AMRS) Is Pushing Hard For The Magic Dollar Threshold

Amyris Inc (NASDAQ:AMRS) Is Pushing Hard For The Magic Dollar Threshold
Written by
Chris Sandburg
Published on
October 14, 2016
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Amyris Inc (NASDAQ:AMRS) picked up a delisting notice back in June based on the company not meeting the NASDAQ minimum bid requirements, and the potential for a delisting has weighed pretty heavily on sentiment during the subsequent months. We covered the company recently, in an attempt to highlight what might be an undervaluation rooted in this negative sentiment, and in turn, an opportunity to get in at a discount ahead of an upside revaluation. Our primary thesis was this – kick off and maintain a positive news flow in an attempt to drag the stock back above the one-dollar threshold. Hold price above this threshold for the required minimum ten-day period, and build from there.We think that without the threat of a delisting hanging over the company, and just as importantly, with the potential for a reverse stock split removed from the equation (something that is far more likely than an actual delisting but that has the potential to be almost as damaging from a value perspective as the latter), institutional and retail investors alike would be much more willing to push cash towards the company. As such, pushing through the one-dollar threshold would signal a great momentum play if and when it happens.It looks like Amyris read our previous coverage, and is now acting on our advice.The company just reported a couple of developments, and these are working to push its stock price up towards the coveted one-dollar mark. There are about eight weeks left to get above this level (before a secondary 180 day notice is issued, if eligible), and from the way markets have reacted to the latest development, it's not going to take too much to reach it.The question now becomes, what's on the cards that might make the difference?Before we try and answer, let's look at what just happened. For those looking for an introduction to the company, it is worth taking a look at our previous coverage, available here. For those not wanting to click away, the company is a producer (the only one in the world of its type that is this commercially advanced) of a product called farnesene, which is a chemical compound with a huge number of potential applications and – by proxy – a large number of potential markets for Amyris to go at.It's got a host of big name partnerships with billion dollar behemoths across a range of industries and brings in around $10 million a quarter revenues (reportedly this is now up to a $100 million annual run rate, and is likely to ramp up near term based on the just mentioned partnerships). Despite this, its only valued at a little over $182 million at last count.Here's where things get interesting, however.The latest announcement, and the start of what we think will be a flow of positive press releases, concerns a deal just struck with an unnamed company that will see Amyris expand its operational presence in Asia. The deal promises to bring in $10 million near term (slated for a December delivery, on deal close) and what the company refers to as "transformative" revenues throughout 2017. Transformative here means $100 million. There's also a $20 million equity investment slated for deal close at $1.40 a share. This equity purchase represents a more than 80% premium on current pricing alone.So what's next?Well, this deal is huge for Amyris, and has come at a time when the company needed a boost. At the beginning of September, Amyris was languishing around the $0.4 a share mark, and markets had essentially written the company off and called certain on an RS. On Thursday, Amyris closed at $0.82, a 105% gain on September open, and it's only got to pick up another 20-25% value before it breaks the one dollar close.Management promised deals towards the end of the year, and we've had two major ones across the last month alone. We think that one more will do it, and that's what we're looking out for. Bottom line here is that it's refreshing to see a company trade below a dollar, receive notice from NASDAQ, and organically build towards a safe valuation. Amyris management is not taking the easy route and splitting, and this says a lot about the company's opinion of its shareholders.One to watch, and one we’re keeping a very close eye on going forward. Subscribe below and don't miss any potential announcements that could prove the final push required to break the magic dollar mark.Disclosure: We have no position in AMRS and have not been compensated for this article.

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