If P&G's sales and marketing objectives are met the royalty fee schedule will amount to a lot more than 6 figures to OBJ.
P&G redefined the measures and metrics it uses to invest in value creation, and back in September/October 2010 the consumer giant announced two new goals for its open innovation program with the aim of taking Connect+Develop to the next level of strategic value creation. Only a matter of days separated this news from an ASX announcement released to the market on 28/09/2010 which informed investors that OBJ had entered into a strategic alliance agreement with one of the world's largest consumer goods companies to evaluate OBJ's technology platforms across multiple product categories.
Another 20 months (almost two years) would pass before the identity of that global strategic alliance partner was known to the public as per announcement released during May 2012.
Not surprisingly, a blinded market showed little reaction to the news, however for some of the long termers among us this disclosure in conjunction with the new goals announced by P&G for its open innovation program back in 2010 added significant value to our investment. Inevitably, the market would eventually follow...
In hindsight I'm expecting to see a new set of posters sharing a similar view next year... "those that got in cheap @ $0.10c last year..." - but in my personal view I don't necessarily think that OBJ is a stock without any potential negatives, just that with all things being weighed up this company still remains significantly under-valued today.
It would be futile in attempt to value this company on the basis of one successful product launch with the world's largest consumer goods company, when we are also aware of 7 additional programs coming down the pipeline which will almost certainly evolve into many more PDA's over time.
Of course this only represents one of a number of disclosed and undisclosed global partners to OBJ Limited, however in terms of managing risk mitigation when investing in OBJ it's important to understand some of the major changes taking form around the world today, and appreciate that the successful business models of the future will have very little in common with those of the past. P&G's recent announcement confirming that it will only be focusing on its core multi-billion dollar brands moving forward sends a chilling message to the competition, and I know which side I'd prefer to be on.
Don't underestimate the sheer magnitude and marketing prowess of The Procter & Gamble Company. This one relationship alone mitigates a majority of the risk for OBJ investors.
On a personal note, Oslo - I hope you find what you are looking for to encourage you to come and join this 'friendly' OBJ family soon, and a very quick opinion on another stock that you are currently invested...
A leopard never changes its spots and $16 million in capital expenditures above normal quarterly cash burn rates can go a long way in helping a company to meet its full year revenue guidance
OBJ Price at posting:
10.0¢ Sentiment: Buy Disclosure: Held
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