What’s Up with Graphene Stocks? Remember Graphene?
Over the past 4 years we’ve dedicated 27 articles to educating investors about “the graphene industry” and so far, we have to say it’s been a bigger disappointment than carbon nanotubes, which were also expected to change the world. Graphene stocks just haven’t performed leaving us wondering if graphene will ever live up to its expectations.
If you’re new to graphene, or you understandably already forgot about what it was, graphene is a nanomaterial with some incredible properties. Here’s a wonderful infographic from Compound Interest that will bring you up to speed quickly:
Now that you know what graphene is, you might be thinking about investing in it. Since graphene comes from graphite, why not invest in graphite miners? We dispelled that myth in an article titled “Graphite Miners are Not a Play on Graphene“. So what about investing in companies that produce graphene? We’ve written quite a bit about private graphene producers like XG Sciences, Perpetuus, and Angstron Materials. What we want to start by doing right now is looking at the performance of all publicly traded graphene companies that we’re aware of. Here is the list:
| Company | Ticker | IPO Date | Return to Date | Market Cap |
| Directa Plus | (LON:DCTA) | May-16 | -30% | $42 million |
| Haydale Graphene Industries | (LON:HAYD) | Apr-14 | +14% | $50 million |
| Applied Graphene Materials | (LON:AGM) | Nov-13 | -56% | $60 million |
| Versarien PLC | (LON:VRS) | Jun-13 | +56% | $37 million |
That sort of performance is not indicative of a hot market theme that investors can’t get enough of. Instead, it looks like a rather dismal theme that just hasn’t really panned out yet. The last company in the above table, Versarien, is one we haven’t talked about before. Let’s take a quick look at what each of these companies have been getting up to. We’re primarily interested in meaningful revenues which show us that graphene is being sold and used in end products.
Directa Plus (DCTA)
Looking at the Directa Plus results for 2016, we see that they delivered 3.1 tons of Graphene Plus (G+) materials compared to 1.3 tons in 2015. They have more than doubled their customer base to 16, with end products ranging from textiles to a graphene 3D printing filament. Still, revenues for 2016 came to just $963,600 which didn’t do much to cover the $5.35 million in losses. The end of the yearly report states that “the Board is disappointed to report that the Group now expects a significant reduction in anticipated revenues for 2017” which is attributed primarily to reduced sales of their graphene tires which were responsible for a “significant increase in 2016 revenues“.
Haydale Graphene Industries (HAYD)
Haydale managed to secure $1.52 million in revenues for 2016 which was offset by $4.68 million in losses. They have a promising relationship with Huntsman (NYSE:HUN) which is expected to produce revenues this year from “joint development of “graphene” enhanced resins“. Over 2016 they made a few complimentary acquisitions which included a “profitable, high-quality USA based silicon carbide producer” called ACM with an “existing $3.8 million of annual sales of silicon carbide nanomaterials“. They also announced a “graphene loaded polylactic acid (PLA) 3D printing filament“.
Overall, there seems to be a lot going on at Haydale (you can read the report here), and hopefully going forward they break out their graphene revenues separately so we can see how this area of their business is performing.
Applied Graphene Materials (AGM)
For 2016, AGM saw $391,000 in revenues against losses of $5.47 million. During the year they raised just over $11 million, it looks like they have money to survive on for a few more years if the losses continue. Highlights included the launch of a new range of performance Graphex® fishing rods and a new collaboration project with Sherwin-Williams Protective & Marine Coating. AGM supplied in excess of 264 pounds of graphene to customers in 2016 in the form of over 170 evaluation samples. At some point, all these samples being sent out need to turn into customers, ideally for non-sporting products.
Versarien (VRS)
Versarien isn’t a company we’ve talked about before so here’s a short introduction. Founded in 2010, the company began trading in June of 2013 and operates through three segments: Hard Wear Products, Graphene Products and Thermal Products. 2016 saw revenues of $5.73 million across all three groups and losses of $2.34 million. Graphene sales were just $20,850 during 2016 but four partnerships have been formed to expedite adoption of graphene into key markets: batteries, carbon fiber products and enhanced composites for 3D printing and the aerospace industry. In January of this year, Versarien plc acquired a majority stake in University of Cambridge spin-out Cambridge Graphene Ltd. which has commercialized graphene ink. Versarien also has a working relationship with Haydale.
3D Printing with Graphene
Since a few of these companies are manufacturing graphene 3D printing filaments, this reminded us about a company called Graphene 3D (CVE:GGG). When we wrote about this firm, we warned readers about potential conflicts of interest and also challenged the $40 million valuation which seemed to appear from thin air. We were met with comments like this one from Gary Anderson over at 3Dprintingstocks.com:
Hopefully, nobody actually followed that advice. Fast forward to today and we see Graphene 3D Labs is now worth a whole $5 million and we can touch that stock for just 10 cents a share. If you listen to the advice of stock promoters out there who try to cram garbage like this down people’s throats, then you deserve to lose -87% of your hard earned dollars which is exactly what investors in GGG have lost since we wrote an article aptly titled “Is Graphene 3D Labs a $40 Million Company?“. Do what institutional investors do and always stay far, far away from OTC stocks or anything behaves like an OTC stock.
Graphene Isn’t Selling
The common thread we see here is that graphene just isn’t selling yet at a volume and price point that can result in significant revenues. We’ve been sending out “samples” for years and still haven’t seen any meaningful revenues come from large orders. If you recall a few years ago, graphene producer XG sciences filed for an IPO and presented their financials which were equally dismal:
That big drop you see is the result of a one-time order for $600,000 worth of graphene. Why was that order just one-time and not recurring? It’s probably because there aren’t any economically viable applications for graphene that require large amounts of the nanomaterial in volume. Fishing rods and tennis rackets just aren’t cutting it.
In previous articles, we focused on the production capabilities of each graphene startup but that seems pointless because there just aren’t many products out there that utilize graphene aside from some sporting applications. Still, we continue to hear about new breakthroughs and potential applications. Even Goldman Sachs is trying to peddle graphene as an investment thesis:
Research and development continues with advancements keep being made regularly. A Cambridge startup called Novalia claims to have a high-speed, low-cost manufacturing process for printed electronics which uses graphene-based inks. Scientists are now able to “see” the flow of electric currents in graphene which may open up some applications in quantum computing. IBM claims that they can trigger the body’s immune response using graphene. Just yesterday, Rice University reported that they built a prototype that stores 3 times the energy of lithium-ion batteries. The Rice battery stores lithium in a unique anode, a seamless hybrid of graphene and carbon nanotubes. Maybe carbon nanotubes are making a comeback after all.
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“I have just recently returned from the Graphene 2017 conference in Barcelona where I gave an invited talk. There is tremendous scientific progress, both on CVD and platelet type graphene, and across many graphene applications. Interestingly, the participants however repeatedly suggested that the industry has now passed the peak of hype and is well into the disillusionment period.” By Dr Khasha Ghaffarzadeh for IDTechEx.com
That’s very encouraging to hear Paul. It’s interesting to see the chart in that link which shows all the producers. From the perspective of producers, it seems like their focus was always on “how much they can produce” and of course “purity”. In any case, the volume they would need to sell in order to make them interesting to investors isn’t supported by a sufficient number of products yet. Hopefully we can see some of these applications in the form of commercial products very soon now.
Well as somewhat of a knowledge person about these things, I gotta say: Firstly I agree with a lot of what this article states, as usual, you guys do a good job. But more generally, first comes the hype, the speculation. Then comes realizing that it takes longer from the hype to reality/market. I do models on exactly this. I focus much like this wonderful site on innovation and disruption using economic and physical laws to make forecasts (I also use some basic ideas in information theory, dynamical systems, a lot of publicly available data combined with machine learning and then knowledge extraction to fuzzy rulesets, so yes, I am not just talking trash, see my research paper and videos below)
So the hardest thing for a development after it occurs at all, is when will it actually make an impact, when will it be “a thing”. That is when will it leave the lab and be used in everyday products and new ones. That’s the big question. Always (and much like the article stated it’s all about economic viability, finding out techniques that increase quality needed to make awesome stuff while the price drops to the point where it has that viability due to the same techniques and production capacity of said needed quality).
Let’s take carbon nanotubes. I did a lot of research on them (I also happen to have a background in mathematics/physics, which is super helpful), I analyzed them both from their theoretical properties, to trying to determine their actual properties using a lot of research papers. Then on top of that I was able to get data on the price of CNTS in connection to quality and production capacity from the last ten years, and some not so good data from the last 15. Price/volume is always a factor. New methods to make higher quality (purity, such as only semiconductor types, or even with less flaws), will of course happen and have happened (especially in the last couple of years!). I was able to analyze that and find a trend in that, as well as make good physical predictions on how far they can go with things such as tensile strength or properties for semiconductors.
In addition, I took a look at the semiconductor industry. I took a good look at the current FinFET technology and realized that there are also physical/economic limits on that, and actually three major factors have already stagnated in the last few years (for example clock speed). I realized within a certain degree of truth (risk), the economics and physics behind Moore’s law will break down just with current technology soon (around let’s say 5nm nodes for example), and the price per transistor is actually going up instead of down as it always was for like 50 years.
So when you look at this, and then analyze CNT-FET technology and how far along it is, as well as the economic incentive behind Moore’s law (It is responsible for a lot more of our economy not only directly, but indirectly in growth than you’d imagine!), I predicted with a good degree of certainty that the price point of CNTs, quality (you need a VERY high purity of semiconductor CNTs for electronics!), and production capacity will meet the demands in enough time to extend Moore’s law, saving our economy from a huge problem and allowing the huge semiconductor manufactures to continue a road map that basically makes all your awesome stuff smaller, cheaper, faster, and consume less electricity. This is course made possible because companies like IBM spent like mad to overcome 3 major problems, which I won’t get into here.
However the problem with CNT predictions before were they were too optimistic on the time-line. Besides simply being able to build an industry to mass produce enough, you need higher quality for tensile strength (the awesome tensile strength you want is based on many factors but the HUGE one is reducing imperfections in the CNTs themselves), and also to be able to separate the metallic from the semiconductor type (while also having a high quality) for electronics which when they start using them there (and that will happen very, very soon), it’ll all explode. The price of lower quality CNTs that still have enough tensile strength will become cheaper (because that’s just what happens when you get a higher quality, price drop of the less higher quality), and you will actually see products with CNTs rolling out slowly.
Now I decided to write it all down in an academic paper, for free for the public along with some biotech (bio nanotech) stuff and put it in a review of nanotechnology and making future predictions of this technology, which is very popular (hottest trending paper for many weeks in a row, and possibly the hottest trending paper ever on ResearchGate). If that is too difficult, I also turned them into three videos.
So now with all of that out of the way, without even knowing anything about the graphene industry (besides that structurally CNTs are simply rolled up graphene), I can say the exact same thing is happening here.
So my (unofficial) investment advice: Go out there and grab up some CNT industry-related stock before it pops off (think longer term, like selling again in 5 years or longer right when chip manufactures start really making CNT-FETs and its turning massive profits at least).
Wait a while longer on the graphene (un-researched claim). CNTs will pop first. Graphene will of course pop and it’ll just go right into the same companies/industry that make CNTs (most likely, however I HAVE NOT RESEARCHED THIS YET, SO GRAIN OF SALT ON THAT). I’ll look into other nano-materials later on, I just got an offer from a researcher who messes with physical chemistry in graphene to do some work together, so I will know more in the future. We will probably use my methods to make some predictions (mostly physical, but I might sneak an economic one or two in there if I can for you guys).
And yes, you can totally hire me to do innovation & disruption research in many areas (not as The Amateur Academic brand which is to educate the public to make better decisions & engage researchers in the future of their fields for free, but as me as a person), whether to write research, give a presentation, or write just an article. I have a killer portfolio and CV (such a blatant drop for jobs, sorry nanalze and readers!)
Have some links to find out for yourself (and more shameless promotion, but I am for real and here is proof as well as it might help the readers know what’s up)…
Here’s a link to my mini-lectures on nanotechnology (2nd video is just CNTs):
https://www.youtube.com/playlist?list=PLvhGePofvqyrDOIu99J7FM07zE9k1pnC0
Thanks again to this site for being so great. I’ll make sure to share you on my social media.
Thank you very much for taking the time to elaborate so much on a topic that is really fascinating. Regarding your comment on chips, ever since the Nanosys days we’ve been waiting for NRAM (nanotube RAM) and while NVEC ended up doing quite well anyway for investors, the whole thing just never really panned out.
While there is a lot to talk about here, most investors want to look at things outside the technical aspects and focus on what is commercialized already, funded by the private sector, or being researched heavily by multiple large corporations. Others are equally optimistic but we’re likely to check in about once a year or if we catch wind of some major commercial breakthroughs!
how about this story ?
https://phys.org/news/2017-06-breakthrough-technology-batteries-safe-sustainable.html
Thank you for that Harel. Batteries are a viable application of graphene so hopefully that pans out.