The 3rd bit of good news in a few weeks

1. Director buying stock
2. Index inclusion later this month
3. NPAT surging 20% plus

The not so good news

1. It is an Arms Race in Data Centres. MT have their $450m debt facility but is that enough to keep up with the hyper scalers? Will they need to sell more equity to continue to grow? From my estimates they sold $290m of stock ($260m primary, $30m secondary) in the last 12-18months at $65.55. With the stock at $98 that was fine but back at $68 its less fine
2. They upcoming mediation/court case v Cocoon Data that has been going for 5 years. Here is what MT and CD have to say..

Cybr5 Cocoon Data Holdings Update

November 8 2021, by Macquarie Technology Group | Category: Government

Cybr5 Pty Ltd (parent entity of Cocoon Data Holdings Pty Ltd) dispute.

We are constantly scanning Australia and across the world for the best products that can support our Government customers. Sometimes vendors change direction, approach and ownership, and move from being good products and fit for purpose to no longer being such. In those cases, which is rare, we need to make the right but difficult decision to change the underlying component suppliers. That’s what we did some time ago. We swapped out Cocoon Data, now owned by investors in Cybr5 Pty Ltd for an alternative vendor. We haven’t looked back. It was the right decision to be made. This minor product was no longer what was needed by our Government customers.

While most vendors understand that losing an account is part of business, this is not universal. Unfortunately, some end up in a legal dispute that can achieve little for either party (At this point is it important to note that we deny the claims made against us by Cocoon Data Australia Pty Ltd, a former vendor. Their claims and assertions are entirely without merit).

Ultimately, good products support great businesses.

Cocoon Data vs Macquarie Telecom

by AFR

October 19, 2020

“Macquarie Telecom has been accused of copying the product of a former software partner and misleading government agencies about product upgrades that could have left them vulnerable to cyber security problems.

In a statement of claim to the Supreme Court of NSW, seen by The Australian Financial Review, Cocoon Data accuses Macquarie’s Government division of failing to honour the terms of an agreement for it to resell Cocoon’s Cocoon Data security platform, and eventually creating its own copycat version, which it passed off as an incremental upgrade.” – Paul Smith | AFR Technology Editor

It will be interesting to see whether the good points win or the bad points.

One thing we do know, companies with founders who are large share holders tend to out-perform most stocks...