IMO Education businesses (like NXD) are not enduring or quality in nature. These businesses are simply a collection of rented rooms, a few virtual filing cabinets of documents and very little 'goodwill'. The only saving grace for the model is the negative working capital provided by receiving student fees upfront. Any acquisition would have 'goodwill' included in the price and arguably shouldn't. This is evidenced by the recent closure of a small NXD competitor, where the stranded students simply transferred over to NXD courses. Customers (students) are one-off and have to be continually acquired, there is very little value in the brand of an education provider such as NXD (or a prospective acquisition). The exception of course is the large universities around the world who are extremely well resourced and respected and have incredible brand value. There are two cohorts of international students. Firstly, those wishing to attend a large university mainly for the purpose of the education. Secondly, students wishing for a life experience by living/working/studying in Australia (or else where) where the eduction component is less important and the course (such as those provided by NXD) simply facilitates the visa application process. Both are extremely important to Australia's economy and hence the continual government tampering which we should expect to continue. My point is that it does not make sense to pay for any goodwill through an acquisition will little brand value or enduring qualities when you can expand organically which they have shown they can do. If NXD acquired a competitor, what would they be inherently getting? I am all for an acquisition to use this money up, but I would expect it to be on an extremely low multiple. Which is perhaps the reason for the stall.
@aryabhatta1. Glenn had very little ownership of Redhill and now the merged company. If they (collective boards/ New board /shareholders) didn't want him as CEO, why is he the CEO?
2. Glenn and Micheal discussed all these capital management initiatives on the investor call on 17/08. I do not work for NXD or am affiliated in any way, other than being a very tiny shareholder.
3. There has be geographic expansion, just have a read of the last few presentations.
@mackum8I will again point to how your sentiment appears to be based on the short-term share price moves. I noted your posts this year and the corresponding sentiment below. Blue = NXD daily close price, Green = Buy sentiment, Yellow = Hold sentiment, Red = Sell sentiment. My view is that the current share price is much closer to fair value than it was at highs earlier this year where there was clearly a crowded fund manager trade, which now seems to be unwinding. I am happy to continue to hold with a lower share price now improving prospective returns from here. I wish you well with your investing but I won't be conversing with you any further as I find it frustrating and unproductive.
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