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BenXinvest

1,108 Posts.

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15/07/19

22:33

Post #: 39532368
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Originally posted by AtlasRising: ↑

IMO the IPO was pretty fairly valued. Has the company really grown 8x in 6 months? Of course not. 3-4x growth in such a short time would be phenomenal which would put fair share price around $0.75 - $1.00

If I had to make a call I say share price drops below $1.00 before the end of the year. There's a non trivial amount of shares coming out of escrow in August (IIRC) and they'd have to be looking to cash out at least some of that position since those escrowed shares were at the ~25c SP.

Good customer service and a proven management team but it is easy to have good customer service as a small company with 5,000 customers. Add 16,000 Fuzenet customers in one hit, and watch the pains of M&As slap them in the face as the customer service quality drops as the customer base grows 4x overnight. A quick google of Fuzenet reviews will show that they get many complaints. I suspect UWL who is used to providing a quality service will be overwhelmed with the influx of calls from customers on the shitty Fuzenet network that was held together with tape and only grew off the back of an LBNCo monopoly (FuzeNet was a forced sale to break up a monopoly of wholesale/retail after all).

I'm actually tempted to try and hunt down a short position on this stock. If you plan to hold for 2-3 years I think management will see this company beat the index on returns. In the next 6-12 months I see a lot of pain and a stagnant share price.

An M&A strategy for a company without solid foundations is going to be a value destroyer not a value creator. Hard lessons on the horizons I think.

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Management have performed well before - however also have big failures like superloop. Massive pump - cost me a fortune.

UWL Price at posting: $1.40 Sentiment: Sell Disclosure: Not Held
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