LIFX Acquisition - A few thoughts, page-5

ah i see what you mean.  my mistake.  seems odd to write something you know cant apply but...

as for my thoughts on transaction - won;t know anything until detail is announced, esp as you dont know the resulting dilution

id be v surprised though if anything you can buy for low $10s of millions has meaningful positive cashflow unless it has a big debt or similar liability

but we shall see.  BUD does have a listing and sometimes purely giving a private business a liquidity valve is attractive enough (though that tends to be a factor on bad investments that the private market no longer has much appetite for)

the market behaviourist in me sees this as a nice shell cup move.  raise money without a deal and the stock would plummet - raise money on deal from fresh investors and you bring in new source of support  that will potentially soak some of the selling from old/disillusioned holders

ostensibly if acquisition brings positive cash flow you can then also say you;ve met your fy19 breakeven target - even though thats bollocks in terms of the commitment to the original investors

the track record of company management is incredibly poor - because they overegg every outcome. so - given that fact - you;d have to take whatever the deal is positioned as and cut the assumptions in half

thats the challenge with the stock - at a granular level its actually made ok progress imo - consistent with what i;d expect from real world 2 steps forward 1 step back.  thats life

but the ceo keeps overpromising so much and relying on caveats to escape regulator opprobrium - shown zero capability of pulling his head in.  until he does i have to discount all his statements aggressively

quality management plays it the reverse - downplays the outlooks and overdelivers.  but tech is full of this reverse method and they seem to get away with it scott free - only the shareholders who buy the bumf get slotted