Do you still hold your ISD position? Would love your take on recent developments.
No, I don’t. As I have mentioned before, I reduced my holding in August, and by the end of September I was out altogether; the latter selling had more to do with a broader portfolio re-positioning towards a more conservative stance than with anything company-specific.
So, it looks like I’ve dodged a bullet here (as well as forgone profits on other things I’ve sold, whose SP has kept going up since).
Regarding my take on ISD’s recent developments, I don’t have much to say, except that:
a) A 7.0-8.5m$ NPBT hit looks pretty big, for a single cyber security incident,
b) the concomitance of the incident with the bank debt renegotiation is far from ideal, and
c) there are likely going to be reputational repercussions, especially in Government space, with consequent likely loss of future revenue,
which is probably just a statement of the obvious.
In terms of what the risk/reward looks like at current price: once the increased uncertainty around copyright costs is factored in, in addition to points a), b), and c) above, I am not sure whether the prospective risk-adjusted return as of today is any better than it was three months ago.
So, for the time being, I’m content with just sitting it out.
Cheers
