Wouldn't be surprised to see a couple pips down today, but...

Wouldn't be surprised to see a couple pips down today, but should have strong support from the mid-to-low 2c range. Most of the traders figured bad news was coming on Friday, trading the stock down when they knew there was no report coming before COB.

Have spent the weekend considering why the quarterly hasn't met expectations and have come up with a short couple of reasons.

The market expects a lot out of NZS. Whilst we do own part in a high growth company, not all quarters will be hitting the ball out of the park, and some contracts take a while to fully ramp up. This is obviously the case with the SMB contract, where only 5% of the contractual value was fulfilled in the few months after the deal had been struck, prior to them announcing that they won't proceed with the entirety of the contract. However as time progresses you can obviously expect more out of these contracts as clients get repeat customers themselves, and holiday periods such as Chinese New Year (Jan/Feb 2021) roll around.

Whilst it was mentioned that the month of July was very strong for NZS, including the fact that $468,000 worth of invoices was generated, these are not paid instantly. Often, if you have a good ongoing relationship with a client, these invoice cycles can be anywhere from 30 to 90 days, therefore, I imagine lots of this revenue was not included in the Cash Receipts. I'm yet to put an email towards management, but this will be one of the included questions. It would be standard practice for NZS to mention in the quarterly why invoices were sky high in July, but seemingly similar for the entire quarter. This is probably my one gripe with the results announced on Friday.

Also, one of the better parts about NZS, is that not only do management have significant skin in the game here, but are more open to having lower salaries, with higher proportion of shares/performance rights. Obviously management are truly vying for the best interests of the company, Aldo owns 54M Shares and 13M Options, Peti is taking a $150k salary (small compared to some small cap ASX listings) with a 50k performance rights in the case of 3 months of consecutive CF+, and other Directors own either Shares or Options in the Millions.

This has become a bit of a bottom drawer one for me as the SP dwindles, but I'm hopeful that management can turn it around if you have a tiny bit of patience and let the purchase orders roll in.