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neutralopinions

2,368 Posts.

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23/12/20

11:38

Post #: 49776469
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Originally posted by Groovytam: ↑

@Send2deking

Williams 11 is right. This particular announcement will have no material announcement. If anything it just gives BUD management more time to get their ducks in a row. But them closing out their finances, the announcement expected either 30/12 - 4/1 (depending on when they signed it) will be a material step in the right direction. Let me explain:

BUD is divided into two camps, those who believe in the old narrative (2006-2018/9), and those that believe in the new narrative (2019+).

Those that believe in the old narrative are probably looking to get out of BUD as they have been burnt hard from when BUD was pushing OHM. And honestly, it's fair enough, those days would have been a bad beat unless you were trading/selling it. This culminated in negative sentiment from SHs which has lingered until today - in fact you'll still see post from people on HC from this camp trying to get out, or hold to recoup their losses. The value proposition was to become an IoT (internet of things) company, through the Buddy OHM product. They announced sales upon sales, and the SP rocketed based on future expectations. None of this materialized on the books. And people soon realized "Fitbits for commercial buildings" is a pretty niche market... all the while mgmt were lining their pockets.

This has resulted in the following for the old camp:
1. Lasting lack of trust in management
2. Previous hype/SHs buying in at way inflated prices
3. Association that BUD is mainly associated with the OHM product

At this point, I wanted to iterate that I would also be cheesed off if I bought in back then. (but I fall in the new camp)

The new narrative is refers to everything post the acquisition of LIFX in 2019. They acquired it for a significant portion of their MC. LIFX was a pre-established business on its prior to the acquisition by BUD. This essentially turned BUD from a building tracker company to a consumer retail smart lighting company overnight. There are synergies between the two offerings - but they serve entirely different segments at different price points etc.

The new camp have bought in based on the expectations placed on LIFX. Keep in mind it's the same CEO and similar to the OHM situation, they're pumping out sales notifications again and again. And the old camp are drawing parallels to the OHM days. Not to mention that LIFX has been plagued with production/stock issues long before it was acquired by BUD. Another issue with LIFX is how it's distributed and the costs recouped, as they're selling to large retailers it currently takes over 5m to turn up in a BUD cash flow statement (if we're lucky).

Anyways the announcement they're due to release is confirmation of funding to create a new plant to at minimum 5x their production. Essentially solving the stock issues. But unlike most shares where the price factors in future expectations BUD have a low trust coefficient. So many SH are waiting for confirmation that things actually get done. This being one of them. Confirmation of the cash receipts for all their "Record breaking sales" would be another big one. And the confirmation of LIFX clean having a material impact to Covid would be another.

For me, even though I bought in through LIFX, I did a bit of digging on what happened previously. And I like the direction where the company is going, I don't have the previous lens of the old campers, but I don't want to discount everything that happened in the past. To be honest energy tracking is a solid play (just not for the commercial building segment). I'm optimistic about how Amazon are moving into this space with its Alexa dashboard, and the synergy with LIFX lights could be material.

TLDR:
- BUD SH trust is low
- BUD has changed business models (rather they have added a new entirely different business model)
- SP will move once confirmation of issues is resolved not on future expectation of it resolving
- SP will move significantly once sales figures show up in the books

Full disclosure: I own 2x LIFX 1000 colour lights, 1x new-gen LIFX strip
I welcome all different points of view and if I have missed anything material in either narrative please put it down as it furthers my own understanding.

-T.

Expand

I was one of the old camps folks, parse substitute - what a joke. Dave is a smart guy but pulling that push notification substitute was just not worth the hassle and a complete waste of everyone's time. Add to that there was some really dubious circling of some type of people that kept putting me off. The other problem was it was all intangible : SH could not see the product and hence it all looked a bit pump and dump. You can read some of my posts on BUD before bashing it for pulling that parse/facebook joke.

The I walked into one of the bunnings and saw that they had a premier display for BUD's lifx. Not to mention that it was cheaper in its space compared to some others that were being showcased in that segment. I didn't know that it was a BUD product so hurriedly went home and looked it up. Then to discover that the company that almost seemed like a scam to me pulled up purchasing a physical product, raised money and then bought a business that was tangible got me interested. There was a lot of overhang from the old vultures still so I was cautiously watching while the SP was still 1.4 cents.

Then came the revenue and then the deals with amazon. I think this is as good as having a complete turn around for a business that was spooking some hokum to having a reasonable revenue/product/future. Then slowly revenue kept increasing and this is where I think I believed for the first time that this company had something in the making. Now don't get me wrong, I still think the bulbs can do a lot better than where they are both in terms of quality and connectvity but the sheer distribution network they have built casually commands a big MC.

I don't know whether Dave is pulling all the right levers or taking all the right steps, but I think this stock has a 10-15 cents in it right about now. So whether you believe in the company or not is entirely irrelevant to the fact that this will trade.

Like I said before take it with a pinch or boat of salt, there is a bag or two in here for all the other tech scams that are prevelant on ASX.

Last edited by neutralopinions: 23/12/20

BUD Price at posting: 5.2¢ Sentiment: Buy Disclosure: Not Held
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