What Are The Limits in Scale Economics For Indoor Vertical Farming Companies?
Discover our Monday edition, focusing on the stock market and publicly-listed companies.
Good morning readers, the current macro-economic trend is sending all sectors tumbling as the markets fear additional interest rate hikes and an uncontrollable inflation rate. Since the start of the year, indoor vertical farming stock performance such as the likes of AppHarvest, Local Bounti, CubicFarm, HydroFarm, Edible Garden Ag among other companies have lost about 50% of their share price.
These losses are not always due to poor financial results, or markets not believing in the company’s future plan but, in the overall market sentiment as comparable losses have been incurred in other sectors as well.
On the other hand, investments are still increasing throughout the globe in indoor vertical farming companies as we noted in last week’s editorial:
Most of the companies that are publicly-listed appear to rely on scale economics to fuel their growth over time but aren’t we experiencing the limits of this business model? Should we expect additional losses incurred by these companies?
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