On the tenth of May, in a piece about Merlin, we put SCHMID Group on a list. "EVLV, BAER, SHMD, SRTA, CLBT, VELO: the list of de-SPAC failures is long and the pattern is consistent. High redemptions, dilution from sponsor promote plus warrants plus PIPE, over-optimistic projections, lockup expiry, low-float volatility."
SHMD closed the Friday before that piece at $6.00. It closed yesterday, the twenty third of September, at $3.68.
So the line aged well. But it was a line about a category, and a category is not a company. We had not read a single SCHMID filing when we wrote it. This piece is what happens when you do.
We did not stop at the filings, because this is a company where the filings are the least reliable instrument available. SCHMID reported €66.9 million of revenue for 2025 after guiding to "up to €110 million". It projected €130 million for 2024 when it listed and delivered €60.8 million. It cut its 2026 margin guidance thirty nine days after repeating it in a registration statement. When a management team's numbers move that much, you stop listening to the numbers and go and weigh the machines.
That is literally what we did. A SCHMID wet-process line is a physical object. It weighs somewhere between three and sixty tons. It is built in one of two plants, one in the Black Forest and one in Guangdong, crated, declared to customs under a tariff code the company itself types onto the shipping documents, loaded onto a ship, and delivered to a factory that usually has to file for a permit to install it. Every one of those steps leaves a record that management does not write.
So we pulled 42 United States bills of lading naming Gebr. SCHMID as shipper. We pulled 44,089 rows of monthly European export statistics and matched individual shipments to individual machines by weight and month. We ran a census of every land auction in the Zhongshan district where SCHMID says it is building a new campus. We read the Korean regulatory filings of its joint venture partner, the Taiwanese stock exchange filings of thirty two of its potential customers, the Chinese state tender results, the Air Force Research Laboratory's delivery address, a Michigan economic development grant, 243 patent families, two earnings call transcripts, every SEC comment letter, a New York federal docket and the property records behind its own headquarters.
What we found splits cleanly into two findings that do not fit together, and the rest of this piece is an attempt to hold both of them at once.
Two findings that do not fit together
The first finding is that the business is finally working. SCHMID booked €96.6 million of equipment orders in the first eight months of 2026, more than in all of 2025. Its backlog of €95.0 million on the twenty first of August is the highest figure it has disclosed since 2022. First-half revenue of €46.0 million was up 172 percent. The Chinese plant is, in the CFO's words, "pretty much booked out". The orders are coming from the part of the electronics supply chain that AI servers and optical transceivers are stretching hardest: high-layer HDI boards, mSAP lines, flip-chip substrates and panel-level packaging. Customs records, export statistics and customer filings independently confirm that machines are moving.
The second finding is that the equity is still a financing. The share count rose from 37,974,862 at the listing to 61,637,954 on the twenty second of September, a 62 percent increase, almost none of it for cash at a premium. The company's convertible noteholder converts at a discount to recent trading prices, with a floor of $1.93, and has done so eleven times, usually on or right after an up day. A Chinese state-linked fund that received 12.5 million shares at $2.15 to settle a debt sold 2.8 million of them between February and May at an average of about $6.49. The chief executive sold 1.9 million shares in the four trading days after the company's biggest press release of the year. Total equity was minus €132.2 million at the end of 2025. It has published twenty two press releases since the listing, several of them market-moving, that it did not furnish to the SEC when it issued them.
Both findings are true. The mistake most people make with a stock like this is to pick one and ignore the other. Bulls see the backlog and assume the equity will follow. Bears see the dilution and assume the backlog is fiction. We think the backlog is not fiction and the equity will not simply follow, and the gap between those two statements is where the trade lives.
