I suppose this is on topic, as we are expecting CX Partners to...

I suppose this is on topic, as we are expecting CX Partners to do "something" by the deadline.

What we have now to my mind is a "value gap" or lack of sync to market strategy. These terms are explained here http://blog.deloitte.com.au/strateg...08/51126_7_7_5_2015_Closing-the-value-gap.pdf.

I believe TSI India has these values, projections and then some. It is the current structure, that while we see good deals, there is no way to match this to a financial narrative. While we see good potential for growth, we see no financial conversation on how, when and how much. This is because we just do not know (I know we got some proforma EBITDA figures, but cash flow interests me more).

Now AKP has crappy financials and a great growth story and to my mind is still very high risk (I own stock and I am not cross promoting as I am not a seller). Difference is it has a market strategy, revolutionary product (if it works), large management skin in the game and development timeline, which negates the financial issue based on speculated returns..

Here we have a good story, very solid recent announcements, a seemingly great platform, but there is no way to align development or financial goals in the black box PE structure. We just bounce announcement to announcement and try to put our own interpretation to what that means. Financials are important here as we are looking at an annuity business model (which has growth upside), which dampens the speculation. "Trust us, we will get there" is a hard speculation ask when looking at a black box and probably dampens enthusiasm, especially in the current market.

Fortunately or unfortunately, this value gap and lack of sync provides the risk/reward equation. If your research makes you believe that once a CX deal is done (however it is done) it results in the value gap and syncing of market value being appropriately positive based on the risk involved, you hold. Conversely, if you feel the risk is too high for the potential reward, you sell. If we knew everything we would already close the gap, sync to market and the risk/reward opportunity closes.

It all hinges on the CX deal to my mind. Whether you are in depends on your appetite for risk and at what price you accept that risk. Without the inputs to the valuation model any value guess is pure speculation to my mind. No one outside key management and CX can give you that price comfort.

Cheers