For me, personally I don’t care either way if they obtain the extra shares or not, it’s the major implications of the last announcement that are a red flag for the company and investors. Management can have the shares and keep their positions, they are what made the company to date. Its bigger questions I think need to be answered about the future of the company, and particularly its confidence in success.
Here is a scenario to explain why. Lets pretend I am new to OBJ, and have $1 million to invest. Why should I?, well Lets do some very, very basic due diligence from how i see a new investor thought train occurring.
"OK, OBJ -
-WOW, look at the official client list on their website
SK-11, COTY, GSK, Philosophy, Olay
-Obvious implications of Further - branded Product Demos for panadol! And very advanced discussions and or agreements with Pfizer, J&J, Clorox, Reckitt Benckiser, L'Oreal, Galderma & Beisdorf. Strong indications of Gillette and others as well!!!
-Great Internal Program - Bodyguard( very promising), DCE, Beauty Connect, Surface Hygiene, Surgical Patches, and more... again very promising.
-5 year Master Agreement with P&G!! on the way with others!!
-Excellent global Patent coverage that continues to grow IP.
-They have had 10 years of R&D
-Massively wide ranging products with truly Enormous profit channels to tap into
-Significant validation of the products capabilities, evidence of being significantly better than competitors in -almost all applications,
-Extremely cost effective for clients.
-Company has said its out of R&D into commercialization as of 2016
BUT:
-NDA’s are signed everywhere … damn, I cant ask or know anything about the clients or what going on. So a wall of silence is forced upon the company. “I know NUFINK!!!!!”, so communication is pointless.
-Revenue to date hasn’t arrived, no official indication when it will
However:
-Cash reserves fantastic, excellent management.
-Directors and staff behind the development of the product are brilliant, well respected and leaders in the field.
-Basic calculations show a very realistic share price target of 35c achievable once full scale commercialization begins.
-Peak Price in the company’s history has been a spike of 13c, but it’s never really cracked and sustained breaching 10c, so huge gains available.
-Massive potential, Looks fantastic, commercialization is happening, 2 products out already, share price should be set to explode, big revenues and clients set to be pouring in. What’s not to like? Let’s get invested….Oh, …Hang on, What’s this announcement here?
-Management are now indicating that in 2 years the share price will needs to be an average for only 5 days at 10c to get their performance plans pushed through... hmmm
-10c? That’s really no better than any time in its SP history. Maybe that’s just arbitrary number they used…
-but why not put down 15,20,30,40 cents then?… why 10c?Thats within the current/typical consolidation patterns of the SP.
-Is that their level of confidence? Do they not believe it will be 11 cents in 2 years? no growth at all?
-Maybe it will be 35c, in 6 months, but I now have no choice but to assume that management see that as in impossibility.
-And why 2 years and not 1 year or 6 months?
-How is it other companies can build from scratch far more complex products, and bring them to market in a much less time frame, but that can’t happen for OBJ in 2 years AFTER 10 years of R&D?
-Perhaps it will only be a couple months, but why don’t they use a lower figure then? again no growth expected?
- where is their confidence? Why not say 1 year, or 6 months? Again I now have no choice but to assume that management see that as in impossibility also.
-So now have to assume that after 2 full years of more hard work, everything will just remain the same, including peak SP, how can that be?? No company growth at all?? after 2 years in a commercial phase?
-why? Do they expect products will be so poor/low in volume that they can’t affect the share price in two years?-Or is it that they don’t expect to have products in the market for 2 years?
-Maybe Im wrong, maybe they will have 10 products, and $300 million revenue, but they can’t tell me anything due to NDA’S!!! so we have to assume based on their weak confidence its not going to grow??
-So as an investor, If I put down 1 Million now in this trading pattern, and in 2 years it’s still in the same pattern with no reasonable ROI, then I stand to lose up to $50k through CPI, let alone other opportunities, and would still have no idea when the company is going to be profitable after 2 years…
Bottom line is this - If after all the amazing things they have done so far, they don’t have the confidence to be able to do in 2 years what other companies with less R&D have done in 6 months, why am I investing then? Do holders really have to wait approx 15 years to see the expected returns? This becomes too much like gambling, where no one can tell me anything.... I need strong, official and confident forecasting based on qualitative or quantitative evidence... without it, investment isn't feasible"
To me, that scenario above highlights the big questions that have now been put into play, and going to cause of lot of insecurity and low confidence in the SP. Confidence in the future was needed from OBJ, but instead just got pancaked, and i see it spooking the market and sophisticated investors.
We need something from OBJ showing confidence in its product, the company and its success. Holders need to actually feel the company is arriving at at a clear goal that provides investors the means and confidence to reach their goals for investing. Right now, that simply doesn't exist. Its become like wondering lost through the desert, hoping each mirage we see is the real deal, only to have it evaporate into nothing, and no idea how far or how close we are from anything.
I truly wish OBJ had never made that last announcement, or instead set in it goals which were far more aligned with expectations of investor expectations. I hold for now, Will review my position in 2 months if nothing substantial by the end of the year, and if still holding then, will review in the new FY and see whats changed to base a holding position on.
I am very rattled by the current climate for OBJ, but I am hopeful the assumptions are wrong, that the company making commercialization and SP upward explosion is much much closer, - logically, rationally and operationally it really should be.
My main fear however is that my own hope is much higher than managements.
The above is ALL IMO of course.
DYOR, you need to. OBJ is a tough coconut to crack.
Expand
(20min delay)