Sometimes, you do a lot of research on a company, and the more you do, the less you like it. This is a little bit the case with the company we researched lately.

It started out promising, a proprietary technology for converting low grade coal into combustible gasses. It seemed a particularly promising proposition to us, but we waited a long time doing some more research because it had a rather generous market capitalization.

Also, as energy prices soared and the gap between coal and natural gas became wider (cheaper inputs, more expensive outputs), and demand for (clean) alternatives increases, making the proposition ever more enticing.

But there are a few red flags though’:

• The CEO and a few other officials left
• Gas prices in the US have come down a lot recently
• The market cap is still quite significant
• There are few indications that their facility (there is one up and running) actually provide a very enticing business model, but this might be due to start-up cost.

On the other hand

• they did move to the Nasdaq recently (although it hasn’t done them any good)
• they were able to attract a lot of finance ($50+M and a whopping $100M at $9 per share, roughly double the current share price), but we couldn’t find any filing for the $100M offering (that might be our fault though).

So, we publish the research, sit on the fence, do a little more searching perhaps, and perhaps people have some useful comments to make.