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"'The company is cash flow positive, already,' Mr. Anderson said." How is this possible?

redthrowaway 14y ago
Advance orders, I'm guessing. Lots of people would be more than happy to get their hands on a few tons of platinum, even if it takes 15 years.
maaku 14y ago
Technology development contracts.
- waterlesscloud 14y ago
  The article specifically mentions laser communications development contracts.
krschultz 14y ago
Because they haven't hired the engineers yet. A couple founders raising money and taking pre-orders can be cash flow positive. Then they will build out the team, it likely will be cashflow negative for a while (or else they wouldn't have raised money), and then hopefully it will be cashflow positive again.
- pjscott 14y ago
  No, according to the NY Times article, "the company employs about 25 engineers and has development contracts for technologies like laser communications that it believes it will need for prospecting and mining missions."
molsongolden 14y ago
It's a slightly deceiving statement. A company can be "cash flow positive" as long as they are bringing in more cash (by any means) than they are paying out (for any reason). A company that gets a $1m loan then spends $100k would be "cash flow positive".
guscost 14y ago
It sounds totally insane, but I read somewhere that the backers just bought a bunch of platinum puts and then announced their plans to mine it from space...
- joejohnson 14y ago
  An article that mentions the put options scheme: http://venturebeat.com/2012/04/23/planetary-resources-asteroid-mining-2/ http://venturebeat.com/2012/04/23/planetary-resources-astero... It says that Diamandis (the founder of Planetary Resources) may have been joking when he made these plans to buy options.
  - guscost 14y ago
    Yep, that's it. But why wouldn't it work? There are orders of magnitude more platinum-group resources out there than there are down here.
    - joejohnson 14y ago
      Yeah, that's true. Maybe it will work if they keep their plans secretive until right before they are able deliver large amounts of platinum-group elements? They're only going to make a significant amount on these options if very few people buy these options, otherwise a large rush would shift the market prematurely.
- burke 14y ago
  I'm sure I wasn't the only one that was curious about this, so: > There are very limited laws against "insider trading" in the commodities markets, if, for no other reason, than that the concept of an "insider" is not immediately analogous to commodities themselves (e.g., corn, wheat, steel, etc.). However, analogous activities such as front running are illegal under U.S. commodity and futures trading laws. For example, a commodity broker can be charged with fraud if he or she receives a large purchase order from a client (one likely to affect the price of that commodity) and then purchases that commodity before executing the client's order in order to benefit from the anticipated price increase. [edit]

Advance orders, I'm guessing. Lots of people would be more than happy to get their hands on a few tons of platinum, even if it takes 15 years.

maaku 14y ago

Technology development contracts.

waterlesscloud 14y ago
The article specifically mentions laser communications development contracts.

krschultz 14y ago

Because they haven't hired the engineers yet. A couple founders raising money and taking pre-orders can be cash flow positive. Then they will build out the team, it likely will be cashflow negative for a while (or else they wouldn't have raised money), and then hopefully it will be cashflow positive again.

pjscott 14y ago
No, according to the NY Times article, "the company employs about 25 engineers and has development contracts for technologies like laser communications that it believes it will need for prospecting and mining missions."

molsongolden 14y ago

It's a slightly deceiving statement. A company can be "cash flow positive" as long as they are bringing in more cash (by any means) than they are paying out (for any reason). A company that gets a $1m loan then spends $100k would be "cash flow positive".

guscost 14y ago

It sounds totally insane, but I read somewhere that the backers just bought a bunch of platinum puts and then announced their plans to mine it from space...

joejohnson 14y ago
An article that mentions the put options scheme: http://venturebeat.com/2012/04/23/planetary-resources-asteroid-mining-2/ http://venturebeat.com/2012/04/23/planetary-resources-astero... It says that Diamandis (the founder of Planetary Resources) may have been joking when he made these plans to buy options.
- guscost 14y ago
  Yep, that's it. But why wouldn't it work? There are orders of magnitude more platinum-group resources out there than there are down here.
  - joejohnson 14y ago
    Yeah, that's true. Maybe it will work if they keep their plans secretive until right before they are able deliver large amounts of platinum-group elements? They're only going to make a significant amount on these options if very few people buy these options, otherwise a large rush would shift the market prematurely.
burke 14y ago
I'm sure I wasn't the only one that was curious about this, so: > There are very limited laws against "insider trading" in the commodities markets, if, for no other reason, than that the concept of an "insider" is not immediately analogous to commodities themselves (e.g., corn, wheat, steel, etc.). However, analogous activities such as front running are illegal under U.S. commodity and futures trading laws. For example, a commodity broker can be charged with fraud if he or she receives a large purchase order from a client (one likely to affect the price of that commodity) and then purchases that commodity before executing the client's order in order to benefit from the anticipated price increase. [edit]