As was to be expected with the recent announcements, there's been plenty of commentaries and 'supporting' data provided on HC to feed both sides of DW8's (increasing) confirmation bias schism. With some commentaries and straight-up trolling it has become quite comical observing the back n forth from afar without getting sucked into the fray. If anything, the DYOR and 'read with care and at your own risk' has imo been never more apt, as is taking things with a grain of salt to prevent potentially painful investment decisions. So which side of the argument is right and which is wrong?! Well, that's of course down to each reader to ascertain for him/herself. Simply listening to the loudest voices most likely ain't gonna do the trick without a healthy dose of DYOR.
There are plenty of valid points laid out on either side of the argument but any approach to discussing the pros/cons of investing in DW8 from a right/wrong perspective is simply falling short of realizing that the best anyone -- institutional or retail investors alike -- can do is to discuss probabilities of potential outcomes or the effect things may have as opposed to absolute certainties as some seem to imply. And quite frankly imo that's where most arguments fall short with anyone taking a halfway objective and probabilities-based approach. Rather than trying to convince each other how they are right or wrong, simply assigning probabilities to the risk factors the 'other side' is pointing to or fully fleshing out one's analysis to consider non-quantitative elements such as management quality and track record and its potential impact on execution risk, etc., may result in a better evaluation of what we are actually dealing with here. Anyone taking a more nuanced approach considering both sides of the argument will inevitably find grounds for agreement on specific items and at times, even if not on all aspects or on the conclusion. Outright discounting of current financial performance being not applicable is imo as wrong as stating just because the firm is currently not generating a positive operating profit at this time it will never as the business model is wrong. Quite frankly that blanket statement made is b**locks.
I am as aware of what DW8s financials (pre PWG integration) look like as the next guy and all of us lack the full insight into the financial (performance) levers that management has access to, so none of us truly know if we are 1 quarter or 1 year away from breakeven on one of the firm's business lines. We can make an educated guess, but that's about it. Anyone saying otherwise is just b*llshi***ng and this cuts both ways. So why not then assess what signals mgmt is sending with their actions as guidance with the appropriate probabilities/risks assigned? Rationally it should beat taking a yea/nay punt. Likewise, 6 quarters in and some are already so confident as to calling the failure of a business or claiming it is rotating to "logistics (only)" as the business model clearly has already proven it doesn't work?! Wow, some didn't actually pay attention in the first place to what the firm is doing and others have a crystal ball to make that call with such conviction that I am tempted to offer them my DW8 PnL right now to take possession of their mighty crystal ball. (Obviously, this doesn't account for those simply venting on HC for whatever reasons.)
Back in 2017/18 the former directors of DW8 were approached by DT and over 1-2 years saw how he would reshape and reposition the legacy business they'd run for years with little success whilst draining operating capital and increasing S/O repeatedly. They've had a front-row seat and insight from day 1 to what DT was going to build and how he went about it as the LT strategy has been communicated consistently and clearly throughout. Yet the same people still dumped all their shares at a fraction of the SP that it is trading now with all that insight -- let alone what they could have gotten dumping in the 15-21c range. Is that because they figured the business is a house of cards as some here speculate that would eventually blow up and they wanted to get out before it did, or because they possibly didn't really properly assess risks and probabilities?!
Who knows, I won't speculate about other investors' decisions but rather try to assess if there's still plenty of upside left in the business and SP for me to invest or remain invested. I guess in 3-5 years we will all be smarter than today as to whether the firm will be a consistently profitable business and what its share price does between now and then. Objectively the most anyone can do is make an educated and informed assessment on probabilities (i.e. risk) and place their bets accordingly. Others who like me acquired shares below 1c were called idiots and 'lost causes' back when the SP was 0.5c, and then again when it was at 3.5c, and then again at 8.1c. (From the top20 I guess there are a few idiots sitting quite comfortably on substantial gains that they haven't traded in yet. Wonder why that is?!) Past performance is of course not indicative of future performance and I am the first to admit the SP and the underlying asset's performance are most of the time disconnected. Yet there's one thing that since mid-2019 that's been consistent: that Dean and mgmt have continued to move the firm forward fundamentally along the strategic path they had outlined and executed consistently. And the execution capability and track record of management does matter in small and micro-cap names a lot more than when commandeering an oil tanker like Telstra or BHP. And there is empirical evidence on management performance people can hang their hat on, more some than someone's 5c SP estimate, which of course you are also welcome to do.
Anyone trying to make up their mind about the firm should keep a clear perspective when assessing financials, fundamental developments, risk/opportunities w/ respective probabilities, the current SP/valuation, and most importantly time as a lot can happen in 6-12 months in business. The latter cannot be understated as a lot of investors that rushed in to buy shares above 15c IMO had unrealistic expectations or failed to conduct proper DD which includes timing and valuation considerations. 1Q 2021 for example saw the highest and one of the lowest valuation multiples the firm observed since DT took over, so a lot more can happen with share prices vs. fundamentals over the same time -- and that dislocation can swing both ways!
The latest deal reaffirms my conviction in mgmt and I am looking forward to seeing this play out over the coming months but most importantly years. And judging by the SP performance the past 2 days the true impact of this hasn't actually sunk in yet with investors. Baseload capacity is a big issue for larger players and DT had to repeatedly point this out following the deal as many investors it seems failed to grasp the gaps in the pure 4PL model which were always there for everyone to see, same with last-mile logistics capabilities/requirements and how it relates to Market etc., all of which provided a clear indication last year where we would eventually end up. That's also where there are similarities and differences between the AMZN and DW8 models. Hint: It's a lot easier to use exclusively 4PL when you ship items weighing 1kg or less vs. a case or two of wine. Again, zero surprise to anyone who looked at both models in detail and saw where we would eventually go. And most importantly, the firm has been consistent in executing its strategy. Taking advantage of distressed sits is a bon that I have zero issues with as so far mgmt has been able to execute and DT has shown little patience for non-performing personnel. Check past announcements vs. the staff list and you'll see that those who don't perform or contribute are not sticking around long. That may sound harsh but I appreciate that in a guy who I've entrusted my assets with as I don't take uneducated punts.
My thesis could, of course, be wrong and in 3-4 years' time the firm never turns profitable and the SP drops or goes nowhere, yet that is the risk anyone is taking with investing in firms at this stage of their lifecycle or firms who are not yet profitable. Simply saying it will never be profitable is a call I am not able to make as I lack that crystal ball others seem to possess. Or maybe I am just trying to be more aware of the boundaries of my capabilities and assess risk as objectively as possible without succumbing to my own confirmation bias. So please everyone who thinks this firm is crap keep posting your thesis as fleshed out as possible - my thanks to you in advance. Big game hunting does take time and so far we are still only in the first innings imo. I for one look forward to where we end up in 3-5 years. Anway, good luck to everyone in assessing all the opinions and assigning the appropriate weights to each. DYOR.
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