Rubicon

[winner69]

0.20c resistance broken?? where to from here....

Probably only temporary ....20c a nice round number

Even at 20c still richly valued

[whatsup]

Q, will RBC ever live up to its potential, is this an opportunity to average down ( falling knife ) or forget about Fletcher Forests forever ?

[Biscuit]

Q, will RBC ever live up to its potential, is this an opportunity to average down ( falling knife ) or forget about Fletcher Forests forever ?


Might be living up to its potential, just not living up to its hype.

[Balance]

Might be living up to its potential, just not living up to its hype.

https://www.youtube.com/watch?v=_03uXQiz6eY&list=RD_03uXQiz6eY&start_radio=1

Actually becoming a good trading stock - two chances a year?

[Biscuit]

https://www.youtube.com/watch?v=_03uXQiz6eY&list=RD_03uXQiz6eY&start_radio=1

Actually becoming a good trading stock - two chances a year?

Nice music! One of my favourite old bands. I traded out of it after a few months with a small holding when I decided I did not believe the story - made about enough for a meal out with a friend.

[Balance]

Nice music! One of my favourite old bands. I traded out of it after a few months with a small holding when I decided I did not believe the story - made about enough for a meal out with a friend.

Well, get ready for your first chance to make a good trade on this stock this year.

Ex-executives getting rid of their shares, I understand, so don't be in a hurry just yet.

[Leftfield]

....I traded out of it after a few months with a small holding when I decided I did not believe the story - made about enough for a meal out with a friend.

Good on you Biscuit. My two yrs in RBC cost me $3k. (I had been encouraged by 40c asset valuations and a previously successful foray into Tenon, plus I liked an environmentally friendly stock)...... but no regrets. I'm out. TA not looking great currently. GLH.

[Biscuit]

Good on you Biscuit. My two yrs in RBC cost me $3k. (I had been encouraged by 40c asset valuations and a previously successful foray into Tenon, plus I liked an environmentally friendly stock)...... but no regrets. I'm out. TA not looking great currently. GLH.


I liked the idea of the company and the story they were telling. After I took a small holding, I talked to some people connected to the industry in New Zealand. DYOR, but my impression from the people I spoke to was that it is quite a fragmented industry in New Zealand and even here it was not clear to me that it was accepted that their genetics were any better than other peoples. My impression was that some clones do well in one place and other clones do better in another place and everyone has their own preferences. If that really is the case in NZ, how well are they really going to do internationally? I doubt their story and I didn't like their financials, so not for me.

[SilverBack]

I liked the idea of the company and the story they were telling. After I took a small holding, I talked to some people connected to the industry in New Zealand. DYOR, but my impression from the people I spoke to was that it is quite a fragmented industry in New Zealand and even here it was not clear to me that it was accepted that their genetics were any better than other peoples. My impression was that some clones do well in one place and other clones do better in another place and everyone has their own preferences. If that really is the case in NZ, how well are they really going to do internationally? I doubt their story and I didn't like their financials, so not for me.

If you concentrate on NZ then you loose the plot with RBC. RBC is Arborgen, now that they are quit of Tenon, no more and no less. Arborgen is a US company that operates in multiple countries and NZ is decreasing in importance. Arborgen sells into US, Brazil, Australia and NZ. I see NZ forestry as more advanced in its approach to tree genetics and increasing production per acre than the US. This is probably because the land area available to our foresters is so much less than places like US, Brazil and Australia. They can increase output by planting more trees on cheap land but in NZ that has long gone.
Unfortunately, the prior annual reports do not show the breakdown of revenue across countries but it is clear from comments that Arborgen is concentrating on Brazil and the US. NZ is becoming a small player while the US and Brazil are the big opportunities going forward.

[Biscuit]

If you concentrate on NZ then you loose the plot with RBC. RBC is Arborgen, now that they are quit of Tenon, no more and no less. Arborgen is a US company that operates in multiple countries and NZ is decreasing in importance. Arborgen sells into US, Brazil, Australia and NZ. I see NZ forestry as more advanced in its approach to tree genetics and increasing production per acre than the US. This is probably because the land area available to our foresters is so much less than places like US, Brazil and Australia. They can increase output by planting more trees on cheap land but in NZ that has long gone.
Unfortunately, the prior annual reports do not show the breakdown of revenue across countries but it is clear from comments that Arborgen is concentrating on Brazil and the US. NZ is becoming a small player while the US and Brazil are the big opportunities going forward.


I agree that it is the international market that is the key to their success. To answer how well they might do overseas, its worth looking at how well they are doing here, after all they have been here a while and some of their superior genetics were principally developed here for the NZ market. It seems to me that they are a respected company here that does well in the market but, as far as I can judge (and I am not in the industry and have limited visibility into the industry), their "superior genetics" do not seem to have achieved recognition as being uniquely superior here. They may do well, I hope they do.

[t.rexjr]

I agree that it is the international market that is the key to their success. To answer how well they might do overseas, its worth looking at how well they are doing here, after all they have been here a while and some of their superior genetics were principally developed here for the NZ market. It seems to me that they are a respected company here that does well in the market but, as far as I can judge (and I am not in the industry and have limited visibility into the industry), their "superior genetics" do not seem to have achieved recognition as being uniquely superior here. They may do well, I hope they do.

I'm hopeful there comes a time where NZ realises our current timber stocks are shonky. The quality of the timber used in our buildings has diminished considerably over the last few decades. The machine strength testing used now means a quality of timber that would likely be rejected in the past via visual assessment is readily used now days.

[BlackPeter]

I'm hopeful there comes a time where NZ realises our current timber stocks are shonky. The quality of the timber used in our buildings has diminished considerably over the last few decades. The machine strength testing used now means a quality of timber that would likely be rejected in the past via visual assessment is readily used now days.

Our timber is compared to international standards low quality but extremely expensive. Don't think however that Rubicon will change that - what we need is a handful of sawmills owned and operated by people who actually do know their trade.

Just coming from the SI field days - and even there they try to offer wrongly stored (no airgap to dry out) and fungus infected beams as quality product. In Europe they could sell this stuff at best as firewood (well - probably not if its already "treated").

Our timberindustry can only be thankful that NZ is so far off the beaten track - if some of the European sawmillers discover NZ as market, than our inefficient and low quality timber producing domestic industry could close shop.

Which would not be good for our forestry industry either - can't compete with high quality wood from Skandinavia, Siberia and domestic European sources.

[SilverBack]

I agree that it is the international market that is the key to their success. To answer how well they might do overseas, its worth looking at how well they are doing here, after all they have been here a while and some of their superior genetics were principally developed here for the NZ market. It seems to me that they are a respected company here that does well in the market but, as far as I can judge (and I am not in the industry and have limited visibility into the industry), their "superior genetics" do not seem to have achieved recognition as being uniquely superior here. They may do well, I hope they do.

Aborgen picked up a lot of its genetic database from the previous co-owners who were pulp and paper companies in Europe and USA. That will have given them a much wider genetic info than was obtained from NZ.
I have not researched the proportions but much timber is grown for pulp and also packaging and the quality required is not the same as for construction timber. I think Arborgen target growth rate and resilience.

[BlackPeter]

Aborgen picked up a lot of its genetic database from the previous co-owners who were pulp and paper companies in Europe and USA. That will have given them a much wider genetic info than was obtained from NZ.
I have not researched the proportions but much timber is grown for pulp and also packaging and the quality required is not the same as for construction timber. I think Arborgen target growth rate and resilience.

Hmm - timber for pulp and paper comes these days from Indonesia (well, in our region anyway) and it is cheap. If that's the only thing their wood is good for, this would certainly be disappointing. There definitely is money in quality building timber (if they learn how to grow, cut and store it), but there ain't much money in pulp and paper.

The business case for Argogen looks worse every time I look at it ;);

[ari]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12216444

[BlackPeter]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12216444

That's the sort of sustainable and environmental thinking we should support:


The Europeans believe our native trees should be promoted more for use in house building, for added value products and for arts, like carving. Through Kauri, they're also keen to plant rimu, cabbage trees, manuka and kanuka.

Just remind me - which of these trees are provided by Arbogen?

[Leftfield]

.....Just remind me - which of these trees are provided by Arbogen?

That's the point. Arbogen's markets are primarily North and South America. It is an International forestry company.... not only NZ. That said, although I used to hold, I no longer hold.
GLH's!

[ari]

May have main markets elsewhere, but ArborGen still has a multi-million dollar partnership with New Zealand Crown Research Institute Scion in Rotorua

[blackcap]

Glad I got out. More dilution (well not that much really) but not confident anymore going forward. May look at it again in the future.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/RBC/332703/297647.pdf

[Leftfield]

News just out.....

29 March 2019 - Rubicon announced today that its CEO (Luke Moriarty) and CFO
(Mark Taylor), have departed the Company, and that all parties had amicably
agreed a settlement in relation to the finalisation of their roles. Rubicon
has agreed to make to Messrs Moriarty and Taylor (in the aggregate) a cash
payment of NZ$100,000 and an allotment of nine million Rubicon ordinary
shares. Four million of these new shares are to be issued on 1 April 2019,
with the balance of the issuance and allotment to be completed by 1 April
2022.

[whatsup]

Lefty, WHAT FOR ?

[Leftfield]

29 March 2019 - Rubicon announced today that its CEO (Luke Moriarty) and CFO
(Mark Taylor), have departed the Company, and that all parties had amicably
agreed a settlement in relation to the finalisation of their roles. Rubicon
has agreed to make to Messrs Moriarty and Taylor (in the aggregate) a cash
payment of NZ$100,000 and an allotment of nine million Rubicon ordinary
shares. Four million of these new shares are to be issued on 1 April 2019,
with the balance of the issuance and allotment to be completed by 1 April
2022.



Lefty, WHAT FOR ?

Exactly! Maybe others know what this is about???.... all I can say is that I lose faith in a company when it starts blindsiding me with 'bad news.'

[minimoke]

..........

[dubya]

Its good news - suggests a thinning of the branches. In Feb they appointed Alex Brown as CFO. They wouldn't have amicable accepted shares if they didn't see longer term value in them.

Yeah I agree.

[minimoke]

..........

[Leftfield]

$1 a share by 1 April 2022!

Great, that gives me heaps of time to buy in when the good news starts flowing. :t_up:

[dubya]

$1 a share by 1 April 2022!

Oooooh .... not sure if I agree with you on that one lol. Sure hope so though. If it gets to a buck by then I can see one of the Sharetrader Christchurch get togethers being a real rough night!!!! :):)

[mikeybycrikey]

$1 a share by 1 April 2022!

If you changed that to "$1 a share within 3 years", it would probably work any time in the last 10 years. It's always just around the corner.

[biker]

I see it as a positive that they have only taken 100k cash total (70/30?) out of the company and the rest in shares.
Moriarty and Taylor know the potential of Arbogen.
They also know that there is is no market for their shares at current levels.
A good indication IMO that they see plenty of upside in Rubicon over the next 3 years.

Disc. Have been the holder of a lot of RBC for a long time and at this point in time there is no merit in that.

[SilverBack]

Now the company raises $772,000 less fees with a placement. Sounds like money to cover administration plus Moriarty/Taylor payouts. Since RBC has no trading revenue other than through Aborgen, I hope this is not the way of the future.

[t.rexjr]

Now the company raises $772,000 less fees with a placement. Sounds like money to cover administration plus Moriarty/Taylor payouts. Since RBC has no trading revenue other than through Aborgen, I hope this is not the way of the future.

I'm embarrassed for them. Failing to deliver for and entire career and having to put the hat out and beg for a parting gift. Good riddance as they say

[Xerof]

Now the company raises $772,000 less fees with a placement. Sounds like money to cover administration plus Moriarty/Taylor payouts. Since RBC has no trading revenue other than through Aborgen, I hope this is not the way of the future.

I don't see any Capital Raising announcement. I think you have misinterpreted the issue of 4m shares to those dearly departed FOR NOTHING. They haven't raised a cent imo

[mikeybycrikey]

Now the company raises $772,000 less fees with a placement. Sounds like money to cover administration plus Moriarty/Taylor payouts. Since RBC has no trading revenue other than through Aborgen, I hope this is not the way of the future.

No. This is the settlement. Well, part of it at least.

The settlement is $100,000 cash and 9 million shares. 4 million shares will be issued 1 April, with the balance to be by 1 April 2022.

So, the 4 million shares issued today is the first instalment of the settlement. It's an expensive parting gift but they don't seem to be raising money for it... at least not yet.

[Elles]

Doesn't cost money if you issue your own shares... Just makes ours worth less. :(

[SilverBack]

Thanks for corrections. My brain got stuck in first gear on this one.

[Schrodinger]

I'm embarrassed for them. Failing to deliver for and entire career and having to put the hat out and beg for a parting gift. Good riddance as they say

Read this the other day. Outrageous exploitation of shareholders funds. Who had the voting power to keep this rort? I would avoid their other investments.

[BlackPeter]

Read this the other day. Outrageous exploitation of shareholders funds. Who had the voting power to keep this rort? I would avoid their other investments.

Absolutely - and they have a long history of doing that. Some call them the "lifestyle" board.

But anyway - I guess the people happy to keep supporting them must have their reasons?

[BlackPeter]

Just came across this little gem when I checked whether there is any update on the latest (September 18) Edison report for Rubicon (and no, there is not):

"Rubicon worth twice share price, say experts"
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11185247

But don't hold your breath - the article I found is more than 5 years old. However worthwhile noting that the "experts" making this amazing prediction have been Edison, and the share price at that stage was 37 cents.

They probably just got the direction wrong and meant "Rubicon worth half the share price"!

And actually - I think this latter statement might still be true ... ;

Edison - the famous people predicting CRP to move well above $1 - and didn't they envisage as well an outstanding future for PEB "on the edge of glory" - this was 2014 as well?

Not sure - did they get it ever right?

[blackcap]

Not sure - did they get it ever right?

Haha yes. I do think Edison got it right. They got paid nice $ for company analysis that was paid for by the company that they analysed.

[Balance]

Haha yes. I do think Edison got it right. They got paid nice $ for company analysis that was paid for by the company that they analysed.

Edison research?

The day they put a sell on a stock, you mortgage the house and BUY!

[Xerof]

Trouble is they never recommend a sell. They are paid to spruik

[Brain]

He who pays the piper calls the tune.

[beetills]

Interesting article by Brian Gaynor in the Herald Saturday.RBC and their departed top men and their payouts get a good going over
Would paste it if i knew how.Two years in the 5th form taking its toll.

[barney]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12221906

Says it all really. Unbelievable.

[Brain]

I have some good news for Rubicon Shareholders. I sold out the last of my shares last week. Based on my previous experience Rubicon Shareholders can now expect a substantial upward rerating of the SP.

[minimoke]

..........

[minimoke]

..........

[Balance]

I was watching this pre-open. and wondering what was happening. How can this be kosher?

What the hell!

Unfortunately, the NZX and FMA will be asleep at the wheels as per normal.

Well, let's see what happens during the course of the day - I will get someone to lay a complaint if appropriate.

[Well Endowed]

interestingly I've had ASB prevent me from executing (even in volume) with the spread this 'wide'. bloody annoying that likely another broker allows this...

https://www.sharetrader.co.nz/showthread.php?11499-ASB-Market-Discovery-issue&p=755011#post755011

[minimoke]

..........

[BigBob]

I'm not minding as I am happy to see a 3.1% gain on this part of my port folio. But on a $10 trade?

Not uncommon, but totally ridiculous that a minuscule trade like that can move the market price - it opens the door to market manipulation...!! There should be a minimum transaction amount or volume required to move the price (which I think is the case on the ASX)...

[SilverBack]

Not uncommon, but totally ridiculous that a minuscule trade like that can move the market price - it opens the door to market manipulation...!! There should be a minimum transaction amount or volume required to move the price (which I think is the case on the ASX)...

ASX? Take a look and you will see trades of 1 share (not uncommon). Algorithmic trading with computerised robots are constantly active. Institutions constantly manipulate the market, if you believe Australian participants, Shorting is OK and prevalent.
So, you think the NZX is going to stymie institutions?

[BigBob]

So, you think the NZX is going to stymie institutions?

No, I dont...

[Balance]

ASX? Take a look and you will see trades of 1 share (not uncommon). Algorithmic trading with computerised robots are constantly active. Institutions constantly manipulate the market, if you believe Australian participants, Shorting is OK and prevalent.
So, you think the NZX is going to stymie institutions?

Actually, the trade of 1 share is a mandatory ASX requirement whenever a broker wants to do a crossing of shares - the requirement being there to ensure transparency and promote liquidity.

So it is actually not market manipulation.

NZX should have simply followed the ASX years ago instead of allowing the unmitigated disaster of allowing NZX brokers to cross most of the turnovers on the NZX.

[minimoke]

..........

[JMKC]

Actually, the trade of 1 share is a mandatory ASX requirement whenever a broker wants to do a crossing of shares - the requirement being there to ensure transparency and promote liquidity.

So it is actually not market manipulation.

NZX should have simply followed the ASX years ago instead of allowing the unmitigated disaster of allowing NZX brokers to cross most of the turnovers on the NZX.

The 1 share crossing quote is not required any more and hasn't been for about 8 years. As Silverback said, a trade of 1 share is enough to move last price on the ASX in any security.

[minimoke]

..........

[SilverBack]

Actually, the trade of 1 share is a mandatory ASX requirement whenever a broker wants to do a crossing of shares - the requirement being there to ensure transparency and promote liquidity.

So it is actually not market manipulation.

NZX should have simply followed the ASX years ago instead of allowing the unmitigated disaster of allowing NZX brokers to cross most of the turnovers on the NZX.

I do not understand. Both the NZX and ASX have trade codes for crossing and these are frequently shown with normal volumes of shares. I have not heard of the requirement for a 1 share trade before, even though this is often commented on in AUS share bulletin boards. Can you provide url for info on this requirement? I would appreciate it if you can.

[minimoke]

..........

[t.rexjr]

Something odd is happening. Take this close from the other day.

3 "Sells" for a total of 724 shares. Or an average of 241 shares. And at the ask value of 18.1 cents that's a piddly $43 trade each.

I dare say someone is trying to run the price down knowing that at these levels any parcels they do pick up are likely to see a return in the not too distant future. It appears as if someone is selling a notable holding and selling to the bid so it'd be an easy game to play. i do think that these games are in detriment to the whole market. Basically conning average Joe out of their savings.

[BigBob]

I dare say someone is trying to run the price down knowing that at these levels any parcels they do pick up are likely to see a return in the not too distant future. It appears as if someone is selling a notable holding and selling to the bid so it'd be an easy game to play. i do think that these games are in detriment to the whole market. Basically conning average Joe out of their savings.

Totally agree and in this case it's been going on for a few moths too... Constantly being sold down to the bid on pitiful volume....

[minimoke]

..........

[winner69]

And another day and another drop (a year ago RBC subject to Price inquiry on leap from .25 to .29. Been a long time between drinks

Not surprising

Doubt whether dreams will burst into reality

Takeover by greater fools only hope for long suffering shareholders

[BigBob]

Not surprising

Doubt whether dreams will burst into reality

Takeover by greater fools only hope for long suffering shareholders

Well, a planned takeover is the only reason I can think of for this relentless forcing down of the share price. Here's hoping anyway..

[winner69]

Well, a planned takeover is the only reason I can think of for this relentless forcing down of the share price. Here's hoping anyway..

Is it being ‘forced down’ ......maybe just punters relentlessly giving up?

[minimoke]

..........

[BigBob]

Is it being ‘forced down’ ......maybe just punters relentlessly giving up?

It is being constantly sold down to the bid often on very small volume - has been going on for months...

Does not make any sense unless someone want to force the sp down... And why would you want to do that...?

[minimoke]

...........

[BigBob]

Isnt that market manipulation?

If you are on both sides of the trade it is...

[BlackPeter]

It is being constantly sold down to the bid often on very small volume - has been going on for months...

Does not make any sense unless someone want to force the sp down... And why would you want to do that...?

Well, I guess if there would be sufficient bidders who want in, than there would be no way to "force" the price down selling low volumes of cheap shares.

So - maybe the price is just an indication that holders are not very confident and potential buyers rare ...

[BigBob]

Well, I guess if there would be sufficient bidders who want in, than there would be no way to "force" the price down selling low volumes of cheap shares.

So - maybe the price is just an indication that holders are not very confident and potential buyers rare ...

Yeah, maybe you're right... But it looks odd... Who knows..

[t.rexjr]

Well, I guess if there would be sufficient bidders who want in, than there would be no way to "force" the price down selling low volumes of cheap shares.

So - maybe the price is just an indication that holders are not very confident and potential buyers rare ...

There's someone picking off the low lying fruit (though seemingly rotting it may be). The small parcel sells down & lowers the price. The despondent holder throws down their shares at the last sale. Whoever is doing the soaking has very seldom placed a bid, rather they have met the ask.

[BigBob]

Yeah, maybe you're right... But it looks odd... Who knows..

And there we go again - the price sneaked up to 18.5c with the bid at 18.3c, and kapow...! 18.3c now gone and bid at 18.1c... I expect to see a small trade end of day at 18.1c...

[minimoke]

..........

[Leftfield]

There's someone picking off the low lying fruit (though seemingly rotting it may be). The small parcel sells down & lowers the price. The despondent holder throws down their shares at the last sale. Whoever is doing the soaking has very seldom placed a bid, rather they have met the ask.

Tricky to read too much into the recent SP movements in the absence of firm info' from RBC.

Anyone know when they will be releasing their next results?? (their web site seems out of date - which is indicative of the problem)

[mshierlaw]

Tricky to read too much into the recent SP movements in the absence of firm info' from RBC.

Anyone know when they will be releasing their next results?? (their web site seems out of date - which is indicative of the problem)

Last year results out 28th May.

If the result does not show positive NPAT & cash flow then time for me to move on & lick my wounds.

[Elles]

Just had a look at the Arborgen website, which thankfully looks a lot better than the Rubicon one. Had to laugh though about the spelling of the main nursery in NZ in 'Wakkatane'...
https://www.arborgen.com/about-arborgen/

[Leftfield]

Last year results out 28th May. If the result does not show positive NPAT & cash flow then time for me to move on & lick my wounds.

Thanks appreciated......agree, best to decide when you have the facts.

[iceman]

Thanks appreciated......agree, best to decide when you have the facts.

Yes we will be reading the presentation with interest. Sadly I think many of us are losing faith in the guys/troughers running this operation. They have shown us no indication they care much for us small SH and are not really yet doing anything concrete to make this the great company it should be. It is a real disappointment but I am still hanging in there.

[ari]

Hard to swallow that over the past 15 years I have held shares in RBC that all I have ever received is....."As usual, I would like to thank all our stakeholders for their continued support"

[winner69]

Yes we will be reading the presentation with interest. Sadly I think many of us are losing faith in the guys/troughers running this operation. They have shown us no indication they care much for us small SH and are not really yet doing anything concrete to make this the great company it should be. It is a real disappointment but I am still hanging in there.

Investing is often about believing a story and keeping the faith.

Hang in there might be best option

[THEONE]

12 months ago people were talking like Rubicon was going to make them rich...Now it is the end of the world.

As far I can see if you believed the story 12 months ago, you should still believe it now...

The company seems much the same...if this trade agreement is resolved...Then maybe the timing would be ok for an IPO?

I

[Biscuit]

...As far I can see if you believed the story 12 months ago, you should still believe it now...


Or, if you don't believe the story now, maybe you were wrong about it 12 months ago?

[Leftfield]

12 months ago people were talking like Rubicon was going to make them rich...Now it is the end of the world.


Not quite the end of the world....however some of us consider our money as a precious scarce commodity and only put our $ in shares that are trending up, or performing better than the NZX 50.

By taking my money out of RBC there have been better gains elsewhere in the last 12 months ( think ATM and even PLX) while RBC has lost value had I held it.

Should the RBC story change, I'll be back. But until RBC prove themselves, I'm happy to have my money performing, not sitting idle.

[winner69]

Ive never worked out why there’s been so much hype around Arborgen .......after all all they do is grow seedlings and hock them off......and because the seeds are apparently so special the gathering of them looks rather labour intensive if the videos are anything to go by.

But then again I often don’t see the whole picture.

[SilverBack]

Its not about the seeds. It is about beating the competition with a superior product. Mr Ford could not make money on a single Model T but he made a fortune selling 100,000 of them even though there was a factory full of people adding components to the vehicle. Actually, Arborgen sells plants, not seeds. It grows "seedlings" and sells them by the millions.
Arborgen has to succeed with a superior tree for timber or for pulp and trees grown from seedlings. So, what drives demand for Arborgen's seedlings?
Firstly, marketing itself with a superior product. When did we last see any announcement about an industry presentation?
Secondly, meeting demand. What causes a demand for seedlings? The need for new trees to replace milled or damaged trees (as in windblown) of course. Trees are milled to feed into pulp and paper mills, or for building construction, or for crating (e.g. pallets).
Thirdly, what delay is there after losing a tree or felling it and replacing it? 12-24 months? I guess it depends on the country and I am not a forester but my observation from driving through forested areas in NZ is that they stay fallow for a good while.
Commercial forests do not increase in size very much, although carbon sink initiatives may start to change that. However, replacement planting which drives Arborgen sales opportunities will be more or less in line with the consumption of mature trees but subject to the replanting delay.
Drivers for timber are mostly building construction and pulp while the USA is Arborgen's big market. Tree destruction through hurricane or other strong winds must also provide demand for seedlings for replacement planting with a longer delay to allow for removal and sale of windthrown timber.
The other factor to affect timber sales is competition from other countries. Remember when Russia was felling its "endless" taiga of firs. The NZ forestry market was heavily impacted even though the Siberian timber was low grade.

It does indeed appear that Arborgen has little awareness of Rubicon shareholders and Rubicon has little management. Hence the neglect of shareholder information, other than statutory. What is the point of retaining Rubicon as a holding company any longer? May as well list Arborgen in the USA with an ADR setup for overseas investors and wind Rubicon up.
A pox on Rubicon and its management is all I can say at this point.

[Leftfield]

Good post SilverBack.

I would like a good environmentally friendly 'green' stock in my portfolio, but need to be convinced that RBC offers a 'leading edge'.

[winner69]

Its not about the seeds. It is about beating the competition with a superior product. Mr Ford could not make money on a single Model T but he made a fortune selling 100,000 of them even though there was a factory full of people adding components to the vehicle. Actually, Arborgen sells plants, not seeds. It grows "seedlings" and sells them by the millions.
Arborgen has to succeed with a superior tree for timber or for pulp and trees grown from seedlings. So, what drives demand for Arborgen's seedlings?
Firstly, marketing itself with a superior product. When did we last see any announcement about an industry presentation?
Secondly, meeting demand. What causes a demand for seedlings? The need for new trees to replace milled or damaged trees (as in windblown) of course. Trees are milled to feed into pulp and paper mills, or for building construction, or for crating (e.g. pallets).
Thirdly, what delay is there after losing a tree or felling it and replacing it? 12-24 months? I guess it depends on the country and I am not a forester but my observation from driving through forested areas in NZ is that they stay fallow for a good while.
Commercial forests do not increase in size very much, although carbon sink initiatives may start to change that. However, replacement planting which drives Arborgen sales opportunities will be more or less in line with the consumption of mature trees but subject to the replanting delay.
Drivers for timber are mostly building construction and pulp while the USA is Arborgen's big market. Tree destruction through hurricane or other strong winds must also provide demand for seedlings for replacement planting with a longer delay to allow for removal and sale of windthrown timber.
The other factor to affect timber sales is competition from other countries. Remember when Russia was felling its "endless" taiga of firs. The NZ forestry market was heavily impacted even though the Siberian timber was low grade.

It does indeed appear that Arborgen has little awareness of Rubicon shareholders and Rubicon has little management. Hence the neglect of shareholder information, other than statutory. What is the point of retaining Rubicon as a holding company any longer? May as well list Arborgen in the USA with an ADR setup for overseas investors and wind Rubicon up.
A pox on Rubicon and its management is all I can say at this point.

Silverback ....you haven’t convinced me that Arborgen is that special or unique (if that was your intention)

The seedlings (plants) might be special but are they that special they will command a premium price over a long period of time.

The videos showing how they collect seeds gives me the heebie geebies - seems very labour intensive.

And you have outlined the risks very well.

Will watch with interest - one day it might worth a punt

[ari]

Originally Rubicon was set up to also establish and commercialise selected emerging technologies....yeah right. As for US listing surely the conditions are better now than for failed attempt in 2010.
Fletchers were never really shareholder friendly...Fletcher Energy and Capstone comes to mind.....

[SilverBack]

Silverback ....you haven’t convinced me that Arborgen is that special or unique (if that was your intention)

The seedlings (plants) might be special but are they that special they will command a premium price over a long period of time.

The videos showing how they collect seeds gives me the heebie geebies - seems very labour intensive.

And you have outlined the risks very well.

Will watch with interest - one day it might worth a punt

Yes, Arborgen's MCP seedlings do command a premium price but recognise that they also sell large quantities of OP seedlings (open pollination). If you could refer to the 2018 presentation http://rubicon-nz.com/media/1414/18-06-20-arborgen-presentation.pdf then Slide #19 shows a price graph (tried copying into this post but exceeds max size).
The MCP process is no doubt expensive but since the company can produce many thousands of seedlings from one seed using cloning, then that cost will be much reduced on a per seedling basis.
Arborgen indicate that their compelling strategic advantage is the genetic database that they own. This contains the results of trials and research over decades in a number of different countries. They state that it would be very difficult for a competitor to put a similar database together and of course, Arborgen will continue to progress its own findings. Arborgen used to have several multi-national owners from the forest and paper industries who contributed their own genetic libraries and although they sold out of Arborgen they left the libraries behind. With the genetic libraries, Arborgen is able produce more quickly and reliably, seedlings adapted to particular purposes, climates and environments.
If you refer to slide #8 then you will find the significant economic advantages to forest owners by using Arborgen premium seedlings.
I thought RBC was worth a punt last year after it became the holding company for just Arborgen, while Arborgen with new significant shareholders was freed from the inertia imposed by the old industry holders but it is taking longer for net profits to come through. The hurricane had an impact both on Arborgen plantations but more so on its customers in the southern USA, while the Brazil market is still building up.

[BlackPeter]

Is there any truly independent assessment or review on the "worth" of Arbogens database and IP? Even "audits" are not really independent as we have seen in many other cases.

The value of IP is like any other "goodwill" - and can be very fickle - and just remember that Bayer thought as well that Monsanto is a great company with highly valuable IP before they bought them. They didn't see that the value of compensation claims will soon exceed the value of any questionable IP.

The purchase of this IP rich company destroyed (depending on how you value other independent factors) between 50 and 100 Billion Euro of Bayers shareholder capital. It might still kill them.

But yes - Arbogen is not Monsanto ... and Rubicon is not Bayer, but an empty shell of a company with a long history of destroying shareholder capital, run by a board with as it appears quite expensive "lifestyle" directors.

No matter how good the "story" of Arbogen might be - if the board and management fees (including golden handshakes et al) exceed the returns and the management has not even a proven track record of delivering shareholder returns, than one needs to be a true believer to stick around with them.

Clearly - not my cup of tea.

[minimoke]

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[winner69]

Bob over on the PEB thread pointed out that PEB has been going for over 20 years and still trying to convince the world that they have something special

I think Arborgen has been going longer ....hmmm

[t.rexjr]

Bob over on the PEB thread pointed out that PEB has been going for over 20 years and still trying to convince the world that they have something special

I think Arborgen has been going longer ....hmmm

The trouble with trees is they take a long time to grow...

[t.rexjr]

Can anybody enlighten me as to what constraints are on the MCP varieties? I half listened to the topic as I was busy internally mocking the directors efforts of conducting a business like AGM. They briefly touched on constraints that were lifting. Something like current year 65%, then 85% following then no constraints the year after. Did anyone attend last years meeting that can remember what it related to. My research into what that might have been has come up blank

[t.rexjr]

Strange things are afoot at the circle 'K'

[ari]

The trouble with trees is they take a long time to grow...

Perhaps they should be looking at Paulownia.....fastest growing tree in the world. http://www.nzwood.co.nz/forestry-2/paulownia/

[blackcap]

Full Year is out

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/RBC/335230/300795.pdf

Loss of $4.3m but that is behind us now.

[Leftfield]

Sneaking out their result at end of business is not a good look.

Indeed the report (http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/RBC/335230/300795.pdf) is not a good look IMHO (they seem to be paid by the word!.) GLH.

[SilverBack]

Perhaps they should be looking at Paulownia.....fastest growing tree in the world. http://www.nzwood.co.nz/forestry-2/paulownia/

There was an attempt to establish paulownia plantations in NZ a few decades ago. The timber sells for very high prices in China (used to anyway, I have not checked for current). However, the strain of paulownia planted was different from what is favoured in China and did not have a market and so the whole exercise was a flop.
We used to have a mature tree in our backyard until it got blown down. It has attractive purple flowers and very large leaves and is quite decorative. A plantation must look quite special in the flowering season.

[sb9]

Sneaking out their result at end of business is not a good look.


Speaks very poorly of their management and governance.

[GTM 3442]

My understanding is that when Fletcher Challenge was split into the four "operational" companies (Paper, Forestry, Building and Energy), there was a perceived need to find homes for those with "non-operational" or head office roles.

Hence Rubicon.

The original rationale for the company's existence long since gone, and now it serves no purpose - an investment company with only one investment has no role in life other than to clip the ticket.

The next step seems obvious. . .

[whatsup]

What was the admin expenses of $16,800,000.00 made up of ?

[minimoke]

..........

[blackcap]

What was the admin expenses of $16,800,000.00 made up of ?

That's the bit that caught my eye too.

But mini does make an interesting point about sales...

[THEONE]

The report wasn't great, but I thought was ok. Underlying earnings growth looks good..

I thought thanking Luke Moriarity was a bit much though...Maybe he did work hard...Who knows..

I think would have been best to have kept quiet...considering the destruction of value over the years.

[SilverBack]

What was the admin expenses of $16,800,000.00 made up of ?

Good question seeing that this is nothing more than a holding company. Can I suggest that you put the question in writing to be answered at the AGM. That gives them a chance to give a proper answer but then you need to attend the AGM to take on the Board if you do not like the answer given.

Before you draft your question, you need to refer to notes 7 and 14 where there is more detail on administration expenses covering intellectual property. US$5.8M of expenses comes from write-off of intellectual property.

NZ$1.837M of restructuring costs relate to disposal of senior officers (Moriarty and Taylor) but this will not be brought to account until the 2020 accounts.

[SilverBack]

My understanding is that when Fletcher Challenge was split into the four "operational" companies (Paper, Forestry, Building and Energy), there was a perceived need to find homes for those with "non-operational" or head office roles.

Hence Rubicon.

The original rationale for the company's existence long since gone, and now it serves no purpose - an investment company with only one investment has no role in life other than to clip the ticket.

The next step seems obvious. . .

Agreed but the next step could be expensive and now that they have reduced RBC's costs with the new structure I am happy to defer on this. Reducing the number of RBC directors is probably appropriate all the same. Shoud RBC take-over Arborgen and remain listed in NZ or should Arborgen take-over RBC and then list in the US? There will surely be tax implications in any such move. Listing fees on a US exchange are substantial. At the end of the day Arborgen is a very small company for the US.

[minimoke]

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[minimoke]

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[minimoke]

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[whatsup]

I'm still trying to go through the numbers - but notice this gem form last year isn't in this years report "Were it trading at book value, it (i.e. Arborgen/RBC) would be (worth) circa NZ 40c. "

That has always been recognised, but legacy issues have held it back, Q is when will that change ?.

[minimoke]

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[minimoke]

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[SilverBack]

Excellent news; "Rubicon announced today that Hugh Fletcher has advised the Company of his intention to retire as a director of Rubicon prior to the upcoming Annual Shareholders Meeting." Tiem to keep clearing out the dead wood and planting some new seedlingsf
Agreed. Without wishing to diminish Hugh's contributions over the years, we need new blood. In fact, why do we need Rubicon at all? Why not just Arborgen with ADRs listed in NZ? Two sets of directors and two company structures for the same business makes no sense, although I suspect there are some parties apart from the independent directors and officers who stand to benefit.

[whatsup]

f
Agreed. Without wishing to diminish Hugh's contributions over the years, we need new blood. In fact, why do we need Rubicon at all? Why not just Arborgen with ADRs listed in NZ? Two sets of directors and two company structures for the same business makes no sense, although I suspect there are some parties apart from the independent directors and officers who stand to benefit.

So who should take over who ?

[iceman]

f
Agreed. Without wishing to diminish Hugh's contributions over the years, we need new blood. In fact, why do we need Rubicon at all? Why not just Arborgen with ADRs listed in NZ? Two sets of directors and two company structures for the same business makes no sense, although I suspect there are some parties apart from the independent directors and officers who stand to benefit.

Agree. This seems to be a completely pointless double up of overheads. Arborgen is all we need. Could it not just takeover Rubicon ?

[minimoke]

..........

[SilverBack]

Consolidation into Arborgen means that you end up a shareholder in a US registered company. Hence, need to list Arborgen in the US but retain listing in NZ. NZ shareholder protection would be diminished and could end up without any NZ director. In US terms Arborgen is a pretty small company and so what exchange would it list on?
Guess, I do not mind what approach is taken provided I can get out with a reasonable return on my investment. Some way still to go for that to happen.

[minimoke]

..........

[iceman]

They could just do a name and ticker change then remove the piggies from their troughs so there is only one trough to feed from.

Exactly. Shouldn't have to be complicated

[SilverBack]

ArborGen Greenhouse Approved for L3 Quarantine
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/RBC/336980/302837.pdf (http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/RBC/336980/302837.pdf)

Some newsflow at last. Good to see some wider thinking by Aborgen, employing its local skills and infrastructure. Likely to be small scale revenue but applying the Te Teko nursery to horticultural production will help to defray costs at the establishment. It could become a growing business in NZ and will help the horticultural industry.

[ratkin]

Mr. Mann said, "Forestry is our core business, but we can use the assets and
plant-growing skills we have to grow a range of high-value horticultural
species such as hops, blueberries and strawberries.

Marijuana perhaps

[SilverBack]

Yeh right. CBD could buy out Arborgen NZ. Lots of cannabis is grown amongst trees.

[ari]

https://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=12247170

[Balance]

https://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=12247170

Like RBC, will take time but inevitable.

[BlackPeter]

https://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=12247170

Not good for Rubicon. The researchers talked about planting indigenous trees, not the fast growing and exotic monocultures Arbogen sells ...

Arbogens trees are used to produce huge monocultures of exotic forestry significantly changing the natural soil organisms. They are killing off biodiversity and they are highly receptive to all sorts of pests. This is exactly the opposite to creating sustainable forests and increasing biodiversity.

[Balance]

Not good for Rubicon. The researchers talked about planting indigenous trees, not the fast growing and exotic monocultures Arbogen sells ...

Arbogens trees are used to produce huge monocultures of exotic forestry significantly changing the natural soil organisms. They are killing off biodiversity and they are highly receptive to all sorts of pests. This is exactly the opposite to creating sustainable forests and increasing biodiversity.

Excellent point and for the sake of future generation, let's hope that the tree huggers & wood pushers understand that requirement.

Nobody is seriously expecting any single company, be it Arbogen or whosoever, to be a major contributor to the planting of a trillion trees (1,000,000,000,000)!

Question of who has got the expertise and grunt to supply as many as possible - considering Arbogen's trees are meant to be harvested in any case.

Guess like our Jacinda's 1 billion trees to be planted, the world will be lucky to do 10% of that trillion trees unless it is commercial - like plantation forests.

[GTM 3442]

Guess like our Jacinda's 1 billion trees to be planted, the world will be lucky to do 10% of that trillion trees unless it is commercial - like plantation forests.

Planting a trillion trees might just be a good way to get a whole bunch of politically excitable young people out of the cities, where they have a propensity to protest, riot, and revolt.

Five years in a barracks on the volcanic plateau should keep 'em out of mischief.

[SilverBack]

Planting a trillion trees might just be a good way to get a whole bunch of politically excitable young people out of the cities, where they have a propensity to protest, riot, and revolt.

Five years in a barracks on the volcanic plateau should keep 'em out of mischief.

Does the Government sell carbon offset rights as part of its tree planting? Back in the 1930s when squads of employed were sent to plant Kaiangaroa, the aim was to create a forest with future economic value. Perhaps that is too bourgeoisie for the Labour-Greens?
Maybe Arborgen NZ can clone native trees as well as pinus radiata? Where there is a buck, there is a way.

[Xerof]

Accumulation is occurring on this puppy, in consistent 125k lots under 19 cents, but unfortunately, it also consistently gets dumped into (probably by those troughers, who were given a bundle of free shares as an exit package, for doing such a wonderful job in destroying shareholder wealth)

Anyway, we live in hope for a merciful takeover at 40 cents by those American dudes.
I notice a lot of very obvious price manipulation in robotic sizes, but again, the regulators are asleep at the wheel, and couldn't give a ****e. So much for transparent price discovery

back to my cave

[ari]

All time low to finish the week.....lost a lot of confidence in RBC....is there a future?

[Leftfield]

All time low to finish the week.....lost a lot of confidence in RBC....is there a future?

I hope there is a future...but think management needs refreshing.

I got out around the time of the TA 'death cross' convergence of 90/180 day MA (posts #975 & 983.) The other decider for me was management mishandling of the cyclone damage, firstly there was no damage and then later admitting damage was substantial.

I see little evidence indicating the declining trend is over and management have improved.

[mikeybycrikey]

I got out around the time of the TA 'death cross' convergence of 90/180 day MA (posts #975 & 983.) The other decider for me was management mishandling of the cyclone damage, firstly there was no damage and then later admitting damage was substantial.

This isn’t quite what happened.

They announced little damage early on. They didn’t change this but then posted an update to say there was damage to customers and sales were impacted. So, I don’t think their story changed but maybe they could’ve managed it better.

[ratkin]

All time low to finish the week.....lost a lot of confidence in RBC....is there a future?
Probably been hit by trade war sentiment, with log prices crashing. Volumes have been pretty tiny, nothing to make anyone want to buy at the moment.

[winner69]

All time low to finish the week.....lost a lot of confidence in RBC....is there a future?

The future is hoping that greater fools will fall over themselves scrambling for shares if /when Arbogen is IPO’d

[iceman]

The future is hoping that greater fools will fall over themselves scrambling for shares if /when Arbogen is IPO’d

I think you sum it up nicely winner. I sold half my holding a few months ago and stuck the rest in the bottom drawer where it will stay for some years I suspect.

[ari]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/RBC/339810/306249.pdf
Quote-"Rubicon sought and received independent confirmation that the interest rate is reasonable to Rubicon"......reasonable to the lenders too!

[iceman]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/RBC/339810/306249.pdf
Quote-"Rubicon sought and received independent confirmation that the interest rate is reasonable to Rubicon"......reasonable to the lenders too!

I would have given them a few grand at 7% !!!

[ratkin]

I would have given them a few grand at 7% !!!

so the directors and certain other parties are lending 20% of the amount themselves and getting 7% back. Pretty outrageous in the current low interest environment.

[mfd]

The 7% rate seems a little excessive given the annual report shows the company can borrow at 5%, and it's only a couple of mill they needed to find. Slightly tarnishes some good news, an extra million in earnings and cashflow will be pretty handy. Just about covers the excessive directors fees.

[sb9]

so the directors and certain other parties are lending 20% of the amount themselves and getting 7% back. Pretty outrageous in the current low interest environment.

One word sums it up "daylight robbery", very inept board. Glad to be out of this at beginning of this year.

[Xerof]

One word sums it up "daylight robbery"

That's 2 words

The loan is subordinated behind all other debt, so higher risk requires higher rate of interest. 7% is not all that bad for that sort of borrowing. Bringing the building onto the Balance Sheet might also open up possibilities in the (near) future. Remember they have been giving the house a spring clean, with only one or two options in mind. The accumulator is still lurking btw, and the algobot is doing a good job with the lack of real liquidity, to walk the price down. Balance might like to provide a cryptic update if he has the inclination. I know nothing more than the next guy, but the price appears to be going in the opposite direction to the underlying activity, which always raises my suspicions of naughty behaviour behind the scenes

[Balance]

That's 2 words

The loan is subordinated behind all other debt, so higher risk requires higher rate of interest. 7% is not all that bad for that sort of borrowing. Bringing the building onto the Balance Sheet might also open up possibilities in the (near) future. Remember they have been giving the house a spring clean, with only one or two options in mind. The accumulator is still lurking btw, and the algobot is doing a good job with the lack of real liquidity, to walk the price down. Balance might like to provide a cryptic update if he has the inclination. I know nothing more than the next guy, but the price appears to be going in the opposite direction to the underlying activity, which always raises my suspicions of naughty behaviour behind the scenes

Squeezing Luke & Mark out of their 'ill-gotten' compensatory 4m shares plus their 4.5m shares they held before they left the company?

Seems fairly obvious to me that there are a couple of sellers and volumes done to date (since 4m shares issued) mean it will be a while before the sellers (whoever they are) get out.

The big boys who were selling left the scene at 19c.

[ari]

Is there now a larger opening fo Arborgen in Sth America, or will it be turned into farm land?

[percy]

Trump golf courses.!

[ari]

Not looking good for Arborgen HQ in Sth Carolina with evacuation order given.....

[Well Endowed]

Anyone have any idea on potential insurance should the Hurricane hit them? Presumably structures would be insured, but guessing plant stock wouldn't be?

[Leftfield]

Not looking good for Arborgen HQ in Sth Carolina with evacuation order given.....

Storm also gathering over the AGM.

NZSA opposed to latest attempt to increase pay and shares for Mr Adams (Director.) "Rubicon a serial destroyer of Shareholder value," they say.

"If the share offer is approved, the proposed remuneration for Mr Adams will total NZ$137,127. This will be made up of NZ$62,500 in cash remuneration, NZ$50,000 in share-based remuneration and NZ$24,627 of tax paid by Rubicon on behalf of Mr Adams for the share-based component of his package. This is an excessive amount given that Rubicon has a market capitalisation of only NZ$89m, is not profitable, does not pay dividends and has been a serial destroyer of shareholder value."

[winner69]

That Mr Adams could impart some of his learnings from Cavalier (Deputy Chair) which could help Arborgen/Rubicon

[ari]

Will not be sad to see Rubicon name go...onwards and upwards for ARB???