Burning lots of cash, and the one off RnD rebates, ForEx gain and other income from the failing acquisition targets is shadowing the underlying impact from a cash flow perspective. Even if they grow another 150% which is very unlikely, the cost model appears they get no material scale from 2023 to 2024. This would see our investment ultimately become mercy to a cap raise to keep it afloat.
My doctor used to use Microba but moved to another lab, which I think is in Melbourne, which is apparently the same technology at a better price. If they were to follow this model, they would just burn more cash quicker. when I look at the active users and then the quarterly users it looks like they have a large churn and or low usage rate, which is always alarming.
The good thing about this is they have Sonic in their corner who might choose to keep backing the business which might be a good return in 5-10 years.
Ahhhh this is tough to digest...
any thoughts anyone else why this should continue to be a hold and not a sell?
I'm borderline hold for now, just because of the potential in Pharma development which is obviously the holy grail for them and they painted an image on prior announcements of other takeovers of similar businesses at very large valuations.
Add to My Watchlist
What is My Watchlist?
