Extracts (my take aways):
.......
Mr Sharp said plenty of the under-cooked companies on the boards had genuine potential, but failed because their early listing led to exhausted funds and a bad name with investors.
"We apply a simple rule of three with early listings that we watch," Mr Sharp said.
"These new businesses take three or four times as long as they think they are going to, they take three or four times the money they think it will take and they make a third or a fourth of the money they think they are going to make."
North Ridge looks for those companies that have been trading for a couple of years, locked in customers with recurring revenue and with good software, but which have exhausted the goodwill of the market.
"In reality at that point they just need to be recapitalised, the technology is often proven and a lot of the risk has been taken out of the companies," he said.
"Our proposition is that this is the time they really should have listed and that is when we invest."
..........
"We do it with listed companies because frankly there is better value to be had at certain times in the cycle, and also we like the transparency of an ASX or NZX or Singapore listing," he said.
"There is this myth that tech small caps will just grow and grow and grow until one day they are in the ASX 200, but in reality there is only one Atlassian every few years and 99 per cent aren't in that position.
Now, if you view SOR through this prism where would you place it in the cycle, and will it be a survivor?
Will SOR require continuous CRs over the next period (years?) to take it to profitability?
I hope this article provides some context.
Investors in speccies tend to be chronic optimists - me included (to my financial detriment, dah).
SOR Price at posting:
11.0¢ Sentiment: Hold Disclosure: Held
