There is an entirely new board and new management team compared...

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webbj

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25/03/24

17:31

Post #: 73048685
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Originally posted by Snax ↑

Like most on here, I don’t really understand this transaction. Given the directors have unanimously agreed to this divestment, which is, in short, to own 20% of Opin instead of the existing 100% ownership, they must believe that a greater Net Present Value (NPV) can be derived from only owning 20% of Opin.

I can only picture two scenarios where this could be valid (please feel free to add additional scenarios that I may have missed).

The first is that Opin actually has a negative present value and therefore giving up 80% would be beneficial, however if this was the case why wouldn’t they be selling the entire business for $1 instead of 80%.

The other scenario is where they believe that greater value can be derived from a 20% ownership of Opin being externally managed as opposed to 100% ownership and internally managed. But if this were true, wouldn’t that be an admission that external management is at least 5 times more effective? And consequently, an admission that the current board and management is ineffective?

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There is an entirely new board and new management team compared to the same time last year.

So I think your last sentence is pretty bang on. Just that there are optics and professional civility, so they haven't spelled it out quite like that. A new board, chair and CEO + most of the other staff in the business as well.

They have spent 5 years on Opin trying and the results speak for themselves. Patchy revenue that could never cover the costs of providing the services.

Luckily, whilst developing that service they ended up with a huge and unique dataset. Which TrialKey was able to be spun out and developed from. A unique and scalable software product which doesn't have huge staff or other overheads to run.

Those insights and data as well as the tech expertise means now Opyl is truly an AI company, not just a clinical trial recruiter trying to say they are.

With a business that is truly leveraged to sales now, if they can monetise this product every dollar hits the bottom line. The same cannot be said for the - proposed to be disposed of - consulting business Opin.

Only one game now. Sell TrialKey subscriptions and get it out to the world.
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