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Well worded,well thought out,balanced post (wish l could write...

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Zandra

1,288 Posts.

195

11/03/17

09:19

Post #: 23268812
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Originally posted by joewolf ↑

Hi MLC

By the way love the moniker especially given this stock...

Great to debate as I think you are clarifying for me a lot of things. I also agree with a lot of what you are saying... In fact your comment about valuation has probably shifted mine down a bit so I now think its undervalued but not grossly so. Maybe my $1.00 is now drifting down into the 80c range. The reason for the shift is that you are correct the Pegasus contract is the largest we have by far and even that we have some vagueness around exactly what it means for 2017 calendar year.

I think that my valuation flaw here is that I keep going back to the 22 September 2015 high and say that whilst I did not agree with that valuation if it could trade at that level then it must be at least worth that now given the progress made. So that how I got to my $1.00... My argument is flawed it wasn't worth that then so you cannot take that high water mark as anything other than exuberance and a common understanding of the future which has not materialised.

I based my 10 times $10 million ( which in my 3 glasses of wine actually goes higher - lol) as I worked within the retail arena for part of my career - So a pillow is say $50 to $100 but a set of good quality sheets around $200 and a pillow top for the mattress is around the same and retail for the mattress anywhere from $800 upwards and beyond. You probably have 3 sets of sheets to one bed and 4 pillows for a double bed ... So simply put that;s why I think the bankable objective is at least 10 times the $10 million. Ps: don't look at the bed price as the margins in beds is very large so factory price is much lower...

However that's all in the future and I am making the same mistake a lot of shareholders did in September 2015 - get ahead of the actual into the realm of opportunity rather than valuation so I accept the value right now must be between 40c and say 89 something...

As regards targets. Actually worked for a great retailer. His comment was "The market only understands budgets anything you tell them they will measure you by, so we only put out there bankable budgets. If we cannot quantify something we say nothing or defer guidance to the next reporting point."

I will accept they made a mistake but now you have the latest target or budget $24 million ( $2 million a month ...) Is it US$ or A$...? Is it calendar 2017?

Herewith the real thing I have to answer for you:

Your question: "You told me you want management held accountable for their actions over missed targets (I agree totally), but you still haven't told me how you expect that to happen, there's already been one strike at the last AGM and in my opinion a very real chance of a second at the next AGM (which will be an embarrassment to everyone), but I don't understand what extra you want done."

Let me say at the outset I don't believe management will do this as its hard to do.

Personally I think those that justified their remuneration and incentives based upon targets or budgets and the ASx 300 issue should actually cancel the shares issued at a cheap price last year - short term incentives. Should review their remuneration and agree to take a haircut until we have hit certain goals. In my opinion this only applies to 2 individuals. I mean a serious haircut. I think they (all of them) need to define their roles more clearly. I think the company needs an independent chair. It also needs a cornerstone shareholder in the boardroom - so GR must stay - my opinion. You may think I am living in dreamland but I know of at least 2 listed companies that I am invested in where management have actually done this. Where they have taken a 10% drop in base remuneration and deferred the share entitlements - or to varying degrees achieved the same objectives.

That way you acknowledge that you missed something you put out there. Right now the shareholders are the only ones in pain. In fact the short term incentives were reduced to cash and then they got more shares because the share price was so low. That's adding more insult to long suffering shareholders...

Then to another of your comments: "Which brings me to this small section of shareholders who get extra information (according to you), as far as I'm aware anyone can and does email the company regularly with varying outcomes, quiet often I get no reply and occasionally they'll answer me, there could well be hundreds of the more persistent shareholders in the same boat for all I know, many of which I assume just don't share any of their communications because of both these type of comments and HC rules, they don't allow you to go into specifics."

Alexium friends on FB - has 133 members but it is a public page:

"This page is setup with the blessing of Alexium Inc. CEO Nicholas Clark. The aim of the page is to be able to freely transmit information that is available from the company or company representatives that is not available to public via ASX company announcements. The page is not designed to provide inside price sensitive information in any way shape or form - but, is to allow far more freedom of expression than provided by other types of social media."

I am a member but I think that comment above goes to the style and behaviour of management. I am not even sure if it doesn't go against the ASX rules or at least the spirit of the ASX rules.

Then you have others on this forum who have developed relationships with some of management.

I am extremely pleased that they have , I as we all do , benefit from it.

The big question for me is why is this the only company I see the extent of these communications via other communication methods. This company already has a monthly newsletter. Has a you tube following... Has a lobbyist as CEO...

I think these methods have developed because the company has failed to communicate a consistent and cohesive story. There are too many variables that are not defined - is it US$ or A$ is one... most companies define its reporting currency and then if its outside of that currency will denote that currency.

By the way I am 0 out of 3 for reply to emails. Actually I dont agree with you - My current boss has a view you can reply just saying " your comments have been noted" Not replying is part of bad communication - nor should shareholders have to be persistent to get responses.

Have one person dedicated to communication with shareholders especially if you are in the ASX300 or even if you are not... a US$80,000 cost for creating a cohesive communication process is not too much to ask given the numbers we are talking. I would assume that around 150 shareholders communicate of which probably only 25 do it regularly. This will reduce when you communication becomes more clear and cohesive. In fact there are only 350 shareholders with more than 100000 shares. Above 250,000 I reckon you would be down to 100.

Current behaviour makes me feel like my parenting roles - I have to keep checking my understanding as my kids are not clear about what they are telling me - am I the only one feeling like this. Why can the company not adopt one currency to report in and to annotate when it is not in that currency. Why can they not make clear what they mean about current run rate and current margin. Why can they not separate out the trial chemical cost and show us a real margin - they already quote margin everywhere... Why can we not have one spokesperson on investor issues

Sorry for the long post but to me this debate is critical as I do think you could find a $300 million takeover offer get up because and only because of the current behaviours. I at least want to understand what I am giving up if an offer comes in. I dont want to be sold out because of poor communication.

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Well worded,well thought out,balanced post (wish l could write like that).....and you certainly have covered all my concerns , and l bet the majority of SH here were nodding their heads as they took in your post.....cheers, thanks again wolfie...(sheeeeet l didn't realize l could be in top 100......well I'm either heading to the penthouse or the sheeeet house,either way you've gotta admit it's a hell of a ride..

AJX Price at posting: 55.5¢ Sentiment: Hold Disclosure: Held
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