It was back of the envelope stuff - based on both projection of exponential seat sales, but also expanding into new districts (which should also show an exponential trend!) e.g. the 'organic growth' model.
Also factored market size and what I thought was a reasonable chance at them leveraging bigger opportunity and not just 'selling seats' - i.e. large-scale pilots, also the ability to penetrate not just US but also Aus etc.
On the financial front is also the fact we are going to be cash flow positive within 1-2 months if they hit their targets, which puts this small company technically near the point of paying dividends if it wanted! Not that I hope it does don't get me wrong lol, still, it's a cool thought and a welcome change from the usual spec plays - also speaks highly of management ability and the business model which is, again, going to show exponential revenue to sales ratios because of the nature of their model. Also on the commercials front, they didn't even need the CR to grow, let alone the amount they raised, and the oversubscription is confirmation that the investors who know this space much better than I see the potential here, and the stock isn't overly liquid and register is tight enough that we won't see a short-term play here IMO.
Anyway, the real kicker is that this company has its head well above water in its own right, and now with a cash injection, what do you think they are going to do with it? continue organic growth on 2000 seats a month etc? No.
We will see some very strategic plays here I think, and whether that's large-scale pilots or not I'm not sure, but they have the products, they have the demand, they have proven their worth, they now have the means...
Once KNM is noticed properly in the market by investors, and it's potential gets factored into the SP, we will see a genuine re-rate here, and gone will be the days when the SP gets tickled by every monthly seat update.
Be here for it or don't
This is not a buy recommendation (although my sentiment is 'buy', lol, HC forces us to give financial advice whether we like it or not!), nor am I just trying to ramp, just my view on the potential here, I could be wrong! Very happy to be challenged on anything here as I am interested in learning the sector better myself and set my own expectations about SP prediction and eventual sell targets. I have not gone into numbers here as I need to do more research and don't want to be called out on getting things wrong and mislead other investors, if I get the time I might do a deeper dive into the opportunities as I see them and share with others in the coming weeks.
KNM Price at posting:
6.6¢ Sentiment: Buy Disclosure: Held
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