mate, these are very sensible comments! risk return ratios are a real thing and need to be understood so kudos to pointing them out, they are sorely neglected here on HC.
the opportunity cost of holding HMD is real, I think about it a fair bit too. For me, the $500k or so that I’ve put in could have delivered a reasonable amount of dividends as well as options income from setting up structured positions. At these current prices I am well in the red considering what else could have been earned coupled to the price now being below my average entry price.
the C-Notes have become a bit of an albatross around the neck of HMD and that is lamentable indeed! It’s unfortunate too for had the conversion date been in 6-12 months then perhaps something of material benefit would have happened and conversion would have been far less dilutive. I’ve ended up with about 500,000 more shares than I had budgeted for… I haven’t sold them but I would have much preferred fewer that were worth more.
The Macro environment is real and very gloomy to say the least. I agree that an announcement will be worth less now than 6 months ago. I have 2 VC investments that have scaled back their valuations for a raise and a merger respectively at the moment. Reduced multiples are real too, expectations must decline somewhat.
However… the big if still remains…. If real traction happens (which is still likely) then there is plenty of room for gain. I had a couple of meetings with Altor, OC Microcap and Microequities a couple of years ago to talk to them about looking after some of the family office money I deal with. All 3 of those groups all had plenty of experience in making good money from Micros in bear markets. Their experience was that the Micros get smashed hard by Macro downturns, harder than big blues, but equally they rally and succeed much more strongly in adverse conditions too. Should HMD gain traction it’s not much to go from $20m to $80m MC if you’re the only hope out there. I’m staying long. 2 reasons, the first being that having seen the thing in action and spent far too much time with the HMD people I believe that there is a solution to a problem and we have it. Second reason… bloody near impossible to ditch over 4,000,000 shares right now.. hahahaha whoops…. Lol
all in all the business case is as it was. The market is cactus right now until China sorts out Covid and we have our election and the US gets inflation under control. Lots of MASSIVE cogs to turn there but no reason that things can’t fall into place? Definitely could go lower, absolutely. Might bounce? Might get taken out? Might flatline? Dunno?
HMD Price at posting:
12.0¢ Sentiment: Buy Disclosure: Held
