by gumshoe | September 14, 2011 2:59 pm
Byron King[1] is pitching another teensy weensy rare metals stock for his Energy & Scarcity Investor newsletter from Agora[2], only this time it’s not the rare earth metals but a really light metal that he calls the “Fourth Element.”
Which brings to mind several of the periodic table-focused teasers of years past, though particularly the breathless pitches about the “fight for the third element” — and yes, if you take a gander at the periodic table they are indeed talking about real and useful industrial metals, the third element is lithium[3], which has been the focus of many a battery[4]-focused tease as newsletters forecast the era of the electric automobile; and the fourth element, as you might remember from high school, is beryllium[5]. Beryllium, as we are teased by Mr. King, is prized for its light weight, low density, high rigidity, among other things, and is very toxic as a dust but also very valuable as an alloy component, particularly in aerospace applications where light weight and strength are critical.
So Byron King takes us on a long adventure along with the air force and talks about his days as a carrier pilot and mentions the incredible innovations, like drone bombers and long-range reconnaisance, that beryllium and rare earth elements[6] make possible in the defense sector. You can listen if you like[7] — since it was clear partway through what he was talking about, and I’ve heard much the same pitch before, I got a wee bit bored and skipped ahead.
So what is the company he’s pitching as his beryllium play? Well, here’s a taste of the pitch …
“… this small Canadian company has discovered a way to manipulate ‘The Fourth Element’s’ unique properties to make it strengthen and lighten satellites and space structures, aircraft, optical systems, semiconductors[8], medical imaging and nuclear systems.
“As the story up above demonstrates, this explosive Canadian company’s new ‘super metal’ technology… with ‘The Fourth Element’ and aluminum as its main components… could become an essential element in gun sights, rocket launch rails and guidance systems.
“In fact, this ‘super metal’ technology can be used in an incredible array of different areas… including nuclear, aerospace, defense, telecom, computing, electronics, medical, automotive, oil[9] & gas, and many more…
“Already, this tiny company holds several high-end patents and trade secrets for manufacturing this revolutionary product.
“And this savvy company has also acquired the rights to mineralized properties in two Western U.S. states and Brazil[10]… so they can provide their own “fourth element” metal to their production line.”
And no, I don’t know why they insist on putting “The Fourth Element” in quotes — it is, after all, really the fourth element and they generally only trot out the quotation marks when they’re dissembling or making stuff up.
But regardless, if you’ve been paying attention here at Stock Gumshoe for the past few weeks this is no doubt starting to sound familiar. And if I throw in some more other clues like these …
“This penny stock is currently priced under 22-cents a share and has a tiny market cap of under $42 million…
“So once the news leaks out about this tiny Canadian company’s revolutionary “super metal” breakthrough, you could see this company’s stock price soar 10-fold or more…
“Because the fact is, it would only take a tiny chunk of the defense budget’s $707 billion spending spree to well exceed this Canadian company’s small $42 million market cap.
“And as you’ll see in just a moment, this fast-growing company already has secured some important government contracts and brought onboard a retired General to facilitate even more lucrative government contracts.”
… well, then you’re just going to know right off the bat that Byron King is teasing the same company that Nick Hodge[11] teased for his Alternative Energy Speculator[12] just last month, IBC Advanced Alloys (IB on the Venture exchange in Toronto, IAALF on the pink sheets, where it has an “enhanced listing” on the OTCQX that gives a little extra vote of confidence in their reporting).
And no, not much has happened, news-wise, for IBC in the last month — they got their OTCQX listing with the pink sheets, they got some ho-hum drilling permits for one of their properties (they’re teensy and get much of their revenue from selling machined stuff and alloys, but aim to become vertically integrated by exploring for and developing beryllium mines in Brazil and the US), but I didn’t see anything that seemed to be of consequence other than, this week, a filing for an additional capital raise that, though it sounds small ($5-8 million), will dilute existing shareholders a bit more — so it seems likely that this additional bit of dilution helped to bring the share price down from the recent highs (highs that were, in part, probably provoked by previous teasers from other newsletters).
Of course, with a stock this tiny (thanks to a fall over the last couple weeks it’s now more like a $30 million company, at about 17 cents), $5 million starts to sound like more money — and you don’t need any news to make a little fella like IBC get all jitter-buggy.
There was a long discussion among readers who know a lot more about beryllium than I do back in that first article[13], so if you’d like a start on digging into more info I’d start there[14]. The stock does have sales and a prominent role in their tiny sector, but certainly doesn’t have profits yet. They’ve done quite a bit of dilution to expand over the last couple years, with new facilities and an acquisition, so I don’t know what their path to per-share profitability looks like or how long it will be.
IBC has also been touted by newsletters before, including previously by the Alternative Energy Speculator folks back in February 2010[15] — and from my look at the charts, previous touts of the stock by newsletters have been successful in driving the shares up. That isn’t surprising for a tiny stock and a newsletter industry that can make anything sound great in its emails to millions of eager readers, but, in a pattern that we often see repeated for teeny stocks that get the attention of big newsletters, the company hasn’t followed through with enough good news or happy vibes to let the shares stay high and most of these tout-driven highs have gradually waned. Maybe this time it will be different, the company has come some way and they are pretty good at selling their story, but it’s still a tiny stock that can move by 20% if one trader sneezes on his keyboard, so be careful. If you’ve got a thought or two left to share on beryllium or IBC I’m sure we’d all like to hear it — that’s why we’ve got that friendly little comment box down below.
P.S. A curious note for you: IBC is small enough that they use little niche brokers to sell stock — and for this latest offering they’ve hired none other than Euro Pacific Canada[16], which is the Canadian affiliate of Peter Schiff[17]’s brokerage firm. I wonder if future editions of Euro Pac’s newsletter will pitch IBC to their clients? It doesn’t meet their typical criteria of paying a good dividend or being divorced from the dollar very well (their production and sales seem to be mostly in the US, despite their Canadian listing), but I suppose you never do know …
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Can't be bothered to listen to any more crap about tiny stocks that are about to rocket. All complete and utter nonsense 99% of the time. The people that peddle this stuff are just part and parcel of the entire stockmarket scam. There are those that that prey on us by recomending stocks. Then those that prey on us in the stockmarket. itself. It's way past time that they were all exposed or hung.
I'm with you Geoff…bring on the rope
Can't blame you for feeling that way, Geoff — but it's human nature, that 1% of the time that something is real (or real-ish) keeps folks receptive to the promise of sudden wealth. Hope and greed are hardwired in — as is, of course, the tendency to forget our past mistakes 🙂
I agree with all of you. However, Byron King is no fraud. He writes the newsletter "Outstanding Investments" which is rated by CBS Market Watch as the best performing newsletter of the past ten years and everything he does is transparent in
that you can see when he tells you to buy and when to sell.
Yes, OI has indeed been outstanding during much of the last decade — good picks and a great tailwind from increasing commodity prices (most of the time). I don't know the track record for King's Energy and Scarcity, which is a much more expensive letter that often focuses on these teensy little stocks that much more easily get whipsawed.
Speaking of pitches to make us millionnaires, Agora has a particularly nasty one about "If my research, travels and interviews prove correct – this is the last stock you might ever need", which includes several bio-pharmas in early stages, one of which has just been approved for Phase 1 Testing. As the owner of a pharma which has had Phase 3 Testing for about 10 years, I know that this is unconscionable.
Mort T..
That "Last stock you'll ever need" bit from Patrick Cox is about Star Scientific (CIGX), the pitch has been circulating in that form for several months and he's touted CIGX for quite a while — extremely volatile stock.
Article here: http://stockgumshoe.com/2011/05/the-last-stock-yo…
It’s a good that you said 99% leaving at least 1% to work with, go easy on you dismissal platform remember the present day giants like Wall Mart,Apple and many more were penny stocks once. last I heard Apples stock was around $600.00.
I already own a large position but am holding long term on this one. I understand the tech bit that they are developing and it does have an important future in my humble opinion.
I suppose I am just lucky – when I read King's tease last week I bought a bit of the stockand paid about 23cents or so – II got under the wire before it went down to 16cents plus. Their story seems very good and so I would buy more at 1`5 to 26 cents and sit back and see if it evaporates or boild over. It was wonderful seeing Gumshow's "expose" of the tease so soon after I came to the same conclusions.
Harlind
Corrections from Harlind – I cannot see the text before it goes out so "I got under the wire" "I would buy more at 15 tp 16 cents or so" "see if it boins over"
You might want to read Issac Asimov's "Sucker Bait" before getting into this too deeply. (Or just check out http://en.wikipedia.org/wiki/Sucker_Bait for the thumbnail sketch.)
IB is a decent speculation, their key assets are the patents they hold, which Gummy did not get into/ Holding it for a few years could bring vast rewards. What is the downside??, it is liquid and well supported at its current teensy price.
Wow a stock I’ve been tracking for awhile is now being put forth in newsletters! Couple things that worry me are dilution which you can all obviously see. Over 250,000,000 shares! Dang! Also they have some bad debt with very high interest rates in my opinion. It’s definately an issue that needs to be resolved. Saying that I think the company has potential and a nice little niche. I mean who doesn’t want to make nuclear fuel safer? It’s now a huge issue after Fukushima. Their niche could become very lucrative. Sure the U.S. has stopped the building of nuclear plants for many decades and it’s so expensive with the regulations in place that the government would have to basically pay for and/or finance most of it. but some of the world doesn’t care about what the U.S is doing, or what Germany is doing. China and India are going to grow there nuclear fleets at incredible rates. Correct me if I’m wrong but I believe China has over 50 reactors being built or planned. Fukushima delayed construction a bit but they will move forward. If IBC can make fuel safer and easier to cool the savings and safety aspects are astounding! It’s a big if but the potential is there.
Forgot to add, not to mention other aspects of their business.
To follow up on prophecyman post the Company just filed a preliminary prospectus on Sep. 12, 2011 to issue $13,000,000 worth of shares. So dilution as is definitely a concern here as it is in most Micro Caps.
Also meant to add the company violated the covenants on two of their line of credit . The banks are asking to be reimburse and since there is not enough cash on hand and the company is burning cash they probably need about 5 to 6 million to reimburse the loans .
That may be the push behind the offering, then — from what I saw the filing on Sept. 12 was for a maximum of $8 million:
http://www.ibcadvancedalloys.com/news/2011/09/12/…
Apologies you are right it's a minimum of $5 million and a maximum of $8 million. Should not post when I am multi-tasking.
Another teaser I scanned about a month ago was about beryllium being developed as a component of nuclear fuel. It can withstand incredibly high temperatures, and could remove the risk of meltdowns in nuclear reactors. Does anyone know the name of this one?
It's the same company as this teaser IBC Advanced Alloys
Thanks. I suspected that might be the case. Any informatiin as to the feasibility of the beryllium nuclear fuel technology, and whether IBC Advanced Alloy and/or others are making any progress in that app.
findin
Great catch Alain! The violations of their lines of credit is another issue. I believe it a reason the interest on one line is like 10%. Sorry if I’m off on that but going by memory. I also remember reading that interest rate can go even higher if anymore violations occur. If this keeps up it could get very ugly. They don’t want to get like our government and keep borrowing/printing money (issuing more shares) just to keep up with interest payments. I think there’s potential but I’ll stay on the sidelines until this issue is addressed.
Thanks. Yes that is indeed why the rates have escalated.
I think you could take the issuance of shares in this case as fairly positive if the share dilution results in the lowering of interest cost and possible lowering the loss per share. Haven't ran the numbers but I don't see it necessarily as a negative.
fourth element old news,why not look at the fourth strategic metal manganese.Not mined anywhere in north america,Only deposit owned by Buchans minerals,TSX.v They are in the process of defining size,it is already in the millions of tons.
Care to elaborate on what's attractive about manganese?
Manganese was touted as “Supernova Gold” in another newsletter’s teaser from several months ago.
Different strokes for different folks, surprised at the negativity given that high risk plays also offer the greatest rewards.
It just so happens that I attended the Cambridge House Miners Show in Toronto last week and spent some time at the IBC booth because I have been a shareholder for about 18 months and wanted to know more about the company.
First of all they have an EXCLUSIVE license for the technology from Purdue University and have contracts with both the U.S. Army and Airforce for numerous space age applications including parts made for the Hubble telescope. They also have joint ventures with GE, Hitachi and Toshiba and have 4 operating plants in the U.S. with a very strong order book in what is already a $2B. market and growing rapidly.
They have CANCELLED their financing because of the market sell off and as the CEO put it, @ .17 the stock is a GIFT. he compared themselves to a company I know well, because it was my first stock writeup, Travis will remember.
IBM according to the CEO is about where NEM Neo Material Technologies was 10 years ago.
I was the first analyst to alert investors to NEM (still relatively unknown) which I bought @ $5.79 back in Nov/10 and has been over $10. but since pulled back a little with the general market sell off.
My question is, with established markets and exciting new technology with huge potential markets would you rather assume a little risk and pay .17 and ride it up to $5.79 or wait until it is a sure bet and pay $5.79 or a lot more given inflation? I just put in an order today to DOUBLE my stake.
My biggest worry, Myron, despite the Army, Air Force and corporate orders, is that IBC is be burning cash too fast. They'll have to replace the loans just canceled, with SOMEthing. Given already staggering, still soaring U.S. debts, how do you see IBC surviving the Federal cutbacks that seem inevitable, whether voluntary or dictated by US$ collapse??? After all, the ongoing Euro-to-Dollar flight can't last: The market'll get back to realizing that the buck is safe haven no more, Uncle Sam's credit rating'll drop a lot more, the interest on that huge debt'll balloon…and even hi-priority projects'll get scaled back or even shut down.
Gumshoe still hits it home for clearing muddy waters!!! Thanks gentlemen for the info. as well as Byron for the clouded tips…
Interesting stock, and patents may help. As far as making a killing, do not count on it. When someone bigger wants its tech, they will buy it out. Sure, you make something but big guys won’t allow coattails, and if IBC is in financial trouble [not profitable yet and high cost debt] they will seek it cheap. The hang time seems too long.
One more aspect. B King is very good but may have missed one issue here. I had personal experience with a mining co years ago that sold $3B worth of beryllium in place for $500,000. It was not just that the company was short of cash; it would have taken $100M to mine and refine it on any scale. Where is the financial backing here?
When I worked at a UHF TV transmitter site years ago I remember our Tx tubes had Beryilium dust inside them because of its heat transfer characteristics. I also remember what the hazard sheet said ,if you drop the tube and it breaks open, evacuate the area immediately and call a hazmat team!! One part per million can cause cancer!! It may help in cooling Uranium rods but if they ever do melt you will have a much more dangerous result.
Yes, I too have heard the hype types. BUT something is different , not just a feeling or problems I have had with past hyped companies. This one Hit a Cord with me, and not me alone GE is involved Toshiba, and Hitachi ALL Large well regarded companies. New they have seen HYED products before and know the real thing when it appears. Im sure Purdue university dept. of nuclear power knows a thing or two that also. Of course they have knowledge intelligence and could be swayed by possibilities as scientist are an idea intensive lot. The tests they have run to this point PROVE out very promising. I havedn’t used any HYPE. These are simply facts as I have been studying the situation. YES, there maybe 1.5 yr. to two years left to get the US Nuclear Regulstory Commission to give an OK. Last thing we need is 100 reactors Blowing up so Makes sense to me to go a bit slow here. YES, i agree they have diluted their stock quite alot. As for me after reading at least as many HYPED presentations, THIS IS DIFFERENT divein the waters are fine but your will have to swim for awhile before the full results are IN! Happy investing.
I invested in this company nowing the risk and dangers of all of it. I spent a little and iam going to hold out and see, poeple say you have to spend money to make money and thats the american way bad thing happen and good things happen at the prices it is it a buy. Buy a thousand and seat on it or what ever you feel good about wining or loseing.
Hello,
Can any one give me an update on IBC Advanced Alloy. There is some new promotional materials being put out on this company, which says it could be a big winner.
I would appreciate any comment on status.
Latest stock quote for $ IAALF is$0.15 . It’s still in business.
Yahoo description: “The company was formerly known as International Beryllium Corporation and changed its name to IBC Advanced Alloys Corp. in March 2009. The company was incorporated in 2002 and is headquartered in Franklin, Indiana.
https://finance.yahoo.com/quote/iaalf?ltr=1