@madamswer what is your thesis on Credit Clear? is is just that...

@madamswer what is your thesis on Credit Clear? is is just that with the tougher times ahead and there will be a lot of bad debts? im especially surprised you would buying after your comments on the capital raising thread
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Rather poor optics, this.​

And on more than just one level.​

These guys are tone deaf or poorly advised (both, pro'lly)."​

No, the thesis is not purely a cyclical argument of rising credit risks (not that the risks aren't rising; they obviously are, and I think that things will look particularly nasty in 9-12 months' time). That aspect represents around 10% to 20% of the motivation.

The more relevant investment aspect, I think, is more of a structural one, i.e., that, while this company's products and services are not the next magic catch-all solution to the conventional credit management problem, they do have some degree of value-in-use ... at least, that's what the channel checks I've done appear to indicate.

And I feel that some behemoth enterprises are happy to at least invest the time and effort to trial CCR products is an endorsement of sorts.

Having owned CCR shares at one stage I am fully aware that market expectations have not been met, nor well-managed, over the past 12 months. But that's why its a $70m company today, and not a +$200m company, which is what it was a few years ago.

I think that, if it is the real deal then given its capital-light scale-ability it should be able to demonstrate rapid growth in free cash flow. That's if it is the real deal and it customers really do benefit from using the technology.

Because that's been the problem to date: lots of frogs happy to be kissed, but not many of them turned out into real princes for the company.

But like I said, nothing I have heard independently about people who have used the product suggests that it is flawed or totally lacking in utility.

Management retains unwavering conviction, though, so in a big way it boils down to a "Trust Management" exercise.

So, in essence its a call option on management being correct in claiming that the product is sound, but the issue is that the lead times from getting in the door of clients and being able to invoice them is long.

Because if they are proven correct, it will be a business valued in a few hundreds of millions of dollars (certainly $100m, probably $200m, and possibly even more). And if they aren't proven correct, in that case there is already a sufficient Revenue base of around $35m which could easily convert into EBIT of $3.5m or $4.0m (currently roughly EBIT break-even) if some of the growth-related OPEX is cut, which it would be under an "ex-growth" scenario.

Capitalising that EBIT at a modest 12x would yield an EV in excess of $40m and an Equity Value around $45m, given $13m of Net Cash).

In summary, from here the value of my capital could triple or I could lose a third of it.

Even though the forecast risk are high, that is a sufficiently asymmetrical trade-off for me.

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