Sad to see you go mate and hard to argue with your points.
I digested the 4C, which was very average/poor and expected a bit of a dump. I put in a low ball order and got hit - I may have picked up your shares.
While I expected the cash burn, the QoQ ANZ subscriber growth came in below my expectations. Clearly they've had to withdraw guidance as 15,000 by the end of June is too much of a stretch. But it will come.
I appreciate the risk is higher, but at this market cap, my thesis is it's reflected in the price. My assessment is we should accelerate out of this and start to see some operating leverage in coming quarters
One challenge I didn't appreciate as much was the combined impact on cash/operational liquidity of
(1) funding a large order book,
(2) supply chain pressures due to covid/inflation,
(3) expanding into new market like Europe, and
(4) Certus
But the reason I'm still holding is when you look at the above list,
they're all positive. Even the supply chain prepayments will result in cost savings but short term pain. That means that over time, they should provide a meaningful return to the company. That's what I'm prepared to wait for.
At 19c, our market cap is $16.4m and we have $3.1m in cash giving an EV of $13.3m. So with guidance maintained of >$2.1m EBITDA, we're trading on ~6x EV/EBITDA when it looks like the key year will be FY2024 - one year later than I hoped. Very low valuation IMO.
Also, I appreciate the comments on poor liquidity. But that's fairly standard from this end of the market. We've seen this work in our favour as investors had to materially bid the stock up to buy a position back in 2021 and
we went from around 23c to over 60c in 2 months!!!! If things work out like I think/hope they will, then I would expect similar moves. As
@Veecat points out, the run rate of $8m revenue per quarter means even if the stock doubles from here we'll only then be trading at 1x FY2023 revenue. Crazy when you think of it that way hey
I do hope that management stop and pause to rethink any ideas of M&A. At this level, the risk is too high. Deliver on what you said you would. I can't make the webinar but if anyone has the opportunity please tell management to shelve M&A plans.
And as
@Tradingdreamz88 intelligently points out, it wouldn't hurt for Michael to buy some on market!
(20min delay)