Liquidmetal Technologies is a
$46 million market cap materials company that has one of the most intriguing
disruptive technology stories to come out in many years. It has been an
extremely volatile stock lately, as the rumors of inclusion in the iPhone 5 come
and go, and as always with an OTC penny stock, it requires a high level of risk
tolerance. And therein lies a potentially enormous opportunity.
Liquidmetal was started as a Caltech research project in 1993 and eventually IPO'd on the Nasdaq in 2002 with a $1 billion market cap and $20+ share price.I found them to have sharp edges where the injectionmoldes came together while production. They eventually got delisted to the OTC after the 1-2 punch of poor management decisions and a product that was still in research mode, and therefore not yet ready for prime time production. However,A wireless indoortracking system is described in this paper. in August 2010, Liquidmetal was able to replace its management with experienced talent and pay off all its outstanding debt, when Apple (AAPL) paid roughly $20 million to license their technology to be used for personal electronics.
To learn why the world's premiere technology company would take interest in a nearly bankrupt company in the first place, it helps to take a step back in time to Chem 101.Kitchen floortiles at Great Prices from Topps Tiles. Liquidmetal's patented amorphous materials are able to take the best qualities of both traditional metals and plastics. Due to its amorphous atomic structure,Learn all about solarpanel. liquidmetal does not take on the crystalline shape of other metals, but rather arranges its atoms in completely random formations, like a liquid or plastic. This allows it to be injection-molded into extraordinary precise shapes similar to a plastic, while overcoming the crystalline weakness and necessary machining inherent in other metals.
It takes "9 separate milling operations" and is an incredibly time- and energy-intensive product to essentially drill out each nuance on each chassis. On the other hand, this same chassis made from liquidmetal would be superior in every way: lighter, stronger, scratch- and corrosion-resistant, more elastic, while using dramatically less time, energy and natural resources. It can be poured into a mold like a plastic and be finished in minutes, instead of drilled out of a solid piece of metal, which takes hours. The one downside to liquidmetal is a more expensive starting material, but the speed and ease of its precision production will more than make up for the original higher material cost, especially when production is scaled up.
Apple is notorious for keeping all their parts and component makers under lock and key, so its extremely difficult to find detailed information about Liquidmetal's relationships beyond the original 2010 Intellectual Property license. This has led to what I believe is confusion in the investment community as to what an Apple contract is, really, and also is the source of a great opportunity.
The general shortsighted notion has been that Liquidmetal won't benefit beyond the original $20 million license from Apple, even if they are used in the iPhone 5, but this could not be further from the truth! Liquidmetal's limited manufacturing capacity could never have been able to mass produce a product for Apple on its own, so they have spent the past 8 months partnering with world-class companies up and down the production line. They've partnered with Materion (MTRN), a supplier of the raw amorphous material,Proxense's advanced handsfreeaccess technology. and with Engel to produce state-of-the-art vacuum-injection molding machines and molds. Lastly ,they partnered with privately held Visseras, their production partner. Therefore any future product that is mass produced for Apple with have 3 potential revenue streams for Liquidmetal, compared to 4 revenue streams and consequently higher margins for every other company that wants to piggyback Apple's use of this material.
Liquidmetal was started as a Caltech research project in 1993 and eventually IPO'd on the Nasdaq in 2002 with a $1 billion market cap and $20+ share price.I found them to have sharp edges where the injectionmoldes came together while production. They eventually got delisted to the OTC after the 1-2 punch of poor management decisions and a product that was still in research mode, and therefore not yet ready for prime time production. However,A wireless indoortracking system is described in this paper. in August 2010, Liquidmetal was able to replace its management with experienced talent and pay off all its outstanding debt, when Apple (AAPL) paid roughly $20 million to license their technology to be used for personal electronics.
To learn why the world's premiere technology company would take interest in a nearly bankrupt company in the first place, it helps to take a step back in time to Chem 101.Kitchen floortiles at Great Prices from Topps Tiles. Liquidmetal's patented amorphous materials are able to take the best qualities of both traditional metals and plastics. Due to its amorphous atomic structure,Learn all about solarpanel. liquidmetal does not take on the crystalline shape of other metals, but rather arranges its atoms in completely random formations, like a liquid or plastic. This allows it to be injection-molded into extraordinary precise shapes similar to a plastic, while overcoming the crystalline weakness and necessary machining inherent in other metals.
It takes "9 separate milling operations" and is an incredibly time- and energy-intensive product to essentially drill out each nuance on each chassis. On the other hand, this same chassis made from liquidmetal would be superior in every way: lighter, stronger, scratch- and corrosion-resistant, more elastic, while using dramatically less time, energy and natural resources. It can be poured into a mold like a plastic and be finished in minutes, instead of drilled out of a solid piece of metal, which takes hours. The one downside to liquidmetal is a more expensive starting material, but the speed and ease of its precision production will more than make up for the original higher material cost, especially when production is scaled up.
Apple is notorious for keeping all their parts and component makers under lock and key, so its extremely difficult to find detailed information about Liquidmetal's relationships beyond the original 2010 Intellectual Property license. This has led to what I believe is confusion in the investment community as to what an Apple contract is, really, and also is the source of a great opportunity.
The general shortsighted notion has been that Liquidmetal won't benefit beyond the original $20 million license from Apple, even if they are used in the iPhone 5, but this could not be further from the truth! Liquidmetal's limited manufacturing capacity could never have been able to mass produce a product for Apple on its own, so they have spent the past 8 months partnering with world-class companies up and down the production line. They've partnered with Materion (MTRN), a supplier of the raw amorphous material,Proxense's advanced handsfreeaccess technology. and with Engel to produce state-of-the-art vacuum-injection molding machines and molds. Lastly ,they partnered with privately held Visseras, their production partner. Therefore any future product that is mass produced for Apple with have 3 potential revenue streams for Liquidmetal, compared to 4 revenue streams and consequently higher margins for every other company that wants to piggyback Apple's use of this material.
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