Congrats holders. The investment is RKN is looking like a very good bit of business!
Assuming the sale goes ahead and they receive the special dividend, there'll have 12+ months runway. This'll give them some much needed breathing space to execute their growth ambitions, but they'll still be under pressure to reduce their cash burn. I don't think that they necessarily have to start producing positive cash flow by this time next year, but neither can they continue to burn $15m+ per annum (unless they can demonstrate explosive organic growth which is unlikely).
Product manufacturing costs consume 75% of sales revenue, before any normal operating costs are factored in, such as, staff, marketing, admin etc. The latter are over $8m per quarter, so the business has to generate enough sales revenue to service an annual cost basis of $32m+ per annum.
Even if we are generous and assume that operating costs remain constant whilst revenue grows, NOV would have to generate approximately $128m in sales revenue to break even.
It seems a big ask to grow sales 3x, which could take years. What are the other levers that NOV can pull to improve margins?
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Last
5.7¢ |
Change
-0.003(5.00%) |
Mkt cap ! $20.27M |
Open | High | Low | Value | Volume |
6.0¢ | 6.0¢ | 5.5¢ | $3.037K | 52.29K |
Buyers (Bids)
No. | Vol. | Price($) |
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1 | 10000 | 5.5¢ |
Sellers (Offers)
Price($) | Vol. | No. |
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6.0¢ | 15000 | 2 |
View Market Depth
No. | Vol. | Price($) |
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1 | 40000 | 0.054 |
1 | 85000 | 0.053 |
1 | 135000 | 0.052 |
4 | 80000 | 0.050 |
2 | 299167 | 0.048 |
Price($) | Vol. | No. |
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0.060 | 5000 | 1 |
0.063 | 27000 | 1 |
0.064 | 10000 | 1 |
0.065 | 20000 | 1 |
0.068 | 21741 | 1 |
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