DD. Surely the headline of "Record Quarterly Result" really means very little to those vital big money people, when it goes on to say that that 242% rise was on "the corresponding period to March 2015". For goodness sake, one would bleeding well hope so when they have spent around $32 million to literally create a totally new company from the one to which they were comparing results??
I wouldn't think that that would have stirred the excitement of any fund managers to pump big money into the share price.
They, surely, would also have compared statements from each of the Dec Q and this announcement.
21 Jan 2016.
“The earn-out payment agreed is at the top end of the capped earn-out which is reflective of Track profit performance. This is a very positive outcome for Crowd Mobile and provides strong profitability and cash flow momentum for 2016.
But today.
"Revenue and EBITDA from Track (Subscription division) is consistent with the lower end of our original modelling forecasts as the Company ramps up its investment to build a more sustainable business. Crowd Mobile has already hired an experienced CEO for it’s Subscription business and has recruited the right talent across sales, business development, marketing and technology."
I always thought that Track was a "mature" business and definitely NEEDED new blood AND cash to even maintain their previous 5 years' performance, upon which both the purchase price and the earn out numbers were settled. In other words, IMO, they paid a premium price to get Track. BUT, in saying that, that opinion is based on what Track was worth in its own right IF someone just wanted to continue to collect the cash from the ATM.
That is certainly not the case with CTM as stated in that same announcement, where "the company ramps up its investment to build a more sustainable business".
CM8 was fully aware of the "condition" of Track's business model and that in its "old" state, would NOT have been "sustainable", but, saw it as a great platform upon which to build CM8. Despite Track being a "going concern" with great cash income and margins, it needed a huge shot in the arm just to sustain that performance, and, I'm certain, to greatly expand on that performance. Come in CM8.
Now, THAT is the stage that CM8 is currently in!!!! It is building the new "sustainable" Track business together with their own products and to judge them in this developmental, frankly, embryonic, stage is totally unfounded and illogical. The current S.P. is still a fair price for where CM8 is at, but, watch out when all of that development is in place and working. The writing is on the wall for everyone to see.
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