Ok, thanks for the explanation.I'm thinking a takeover by a non...

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gruntov

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17/01/24

13:11

Post #: 71922411
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Originally posted by Mayi: ↑

Apologies if I wasn't clear, I meant a takeover by DRO since that's what you referred to in the original post.

Undoubtedly, DRO will expand their product offering with anti-drone related products, but I would be very surprised if they move outside their core interests. I am not a fan of the way DRO management treats shareholders; however, I am a fan of the way they have target their market and grown sales.

Management is priming DRO as a takeover target (probably for Thales). It just needs to become a bit bigger and demonstrate a history of being profitable. If that occurs DRO will become very profitable for both management and Thales, and hopefully for shareholders too.

The constant dilution of shares and greed by management is adding a lot of overhead, which lowers the value of the company and hence the share price, and Thales will take full advantage of that as it will extract tremendous value through so-called synergies.

For example, the first thing it will do after a takeover is replace Oleg. DRO has about 100 or so employees and they will be able to replace him with a line 2 manager that they will pay about 500k pa. Oleg's package has worked out at about $5 M per year so that saving alone justifies the 30% share premium that they'll have to pay. Then they'll consolidate the sales teams and integrate all the administrative functions into their existing system giving a whole bunch of extra savings, lose all the overheads of being a listed company as well as other highly paid executives and the board.

Oleg will do what Peter James (the current Chairman) did after selling out of Nearmap and joins boards of other ASX listed companies.

Takeovers usually work out for shareholders, but not always. As I have posted before Nearmap's worked out very badly for many shareholders.

My view is that although DRO is currently running red-hot (up again today) and that may or may not continue. I hope it does for the sake of existing shareholders.

As I have advertised I am out of the stock (at least at the moment) and have always said I take a much more conservative attitude than most posters here and am happy to miss on a big gain if the risks become too high (actually I've already had a big gain with DRO - percentage-wise that is, as it's always been too small for me to invest in seriously). I have always found that my big winners come from stocks with good management that are generously priced (usually because of an overaction of some kind). My big losers have always been from stocks that I think are going to shoot the lights out and I've been drawn in by big promises.

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Ok, thanks for the explanation.

I'm thinking a takeover by a non Australian defense contractor, who might look at this as a nice ad on to their current business.
Clearly, imo, drones are here to stay, and have fundamentally changed how wars will be fought going forward.

Cheap offensive drones are prolific.

If you have something to defend, you are going to need drone defense, whether as a nation, or even as a large business.

Ican see drone defense being common on shipping, on each ship.
Too expensive for a navy to be everywhere.

I'm excited to see where AI takes this, even by 2030.

DRO Price at posting: 41.5¢ Sentiment: Buy Disclosure: Held
2 Upvote

1 Great analysis

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