Earnings increasing & multiples expanding (Re-rate commencing), page-567

Hi guys, as much as it doesn't assist speculating on the reasons for why Lucerne are dumping their shares right now, one just can't help it. There are two risks that I've identified upon further research I thought I would share in case it hasn't yet come up and wonder Lucerne have made the decision to now sell.

First, the contract with GM was announced in August 2018 for a 3 year period with an option of 2 further years exercisable by GM. So unless GM exercises this option this upcoming year will be the last contractual year with GM. When GM has to exercise this option by we don't know, but whatever GM's decision is, it will be price sensitive and will need to be announced by the company. Of course everyone knows this is the main source of revenue, so there is possibility of the tap being turned off by next year.

Secondly, is there a chance that GM may not exercise the option and decide to go with another company? We know that Junior Barrett was the CEO for a very short period of time in 2017. According to his LinkedIn profile, he was previously working at GM in the OnStar division so is presumably well connected with GM. He then joined CXZ from 2015 to 2017. More importantly he has since moved to a company called Fleet Complete, which then entered into a partnership with GM in April 2018 to provide its telematics and connected vehicle software platform in GM commercial vehicles. Now I should note this was 4 months before CXZ were awarded the contract with GM, so there may be a distinction between the products offered by CXZ and that offered by Fleet Complete that I, with my lack of technical knowledge, cannot distinguish.

With the above in mind - and especially Junior Barrett working for Fleet Complete - the question I have now is whether there is a possibility that GM may now ask Fleet Complete to take over the CTP being delivered by CXZ? I know the idea of CXZ's moat has been discussed before but I'm not knowledgeable enough about the technology enough to know whether CXZ's products can be replaced by Fleet Complete's - and would be happy to be corrected / clarified. Of course the vice versa could also occur.

Full disclosure I'm presently out. Fundamentals are excellent but with the lack of clarity about future prospects along with the recent large Lucerne sell off and the questions I have in mind at the moment, I'm simply too unsure to hold the necessary conviction for the long run (which is my usual strategy). This may be a regrettable decision for me personally especially if the company announces another contract soon and the train leaves the station.

Please note there is zero intention of down-ramping here (as people I know personally still hold) and I am happy to be corrected / clarified.

DYOR / GLTAH