Hi Rhama,
Those of you who know me (as I have posted here and in my Its Over thread since 2018) would know that I don't short stocks. I am merely cautioning investors about a particular stock I may have invested in before, and as you know I have been one here awhile back.
I too invested in this micro cap (but during the tech boom of 2017) viewing it as potential even before they announced "blockchain". Alongside this with GSW, the next hot logistic app stock at the time. Announcements after announcements were made and both were going gangbusters- but in retrospect and some hindsight now, it was all hyped up - you can check how many of those collaborations came to fruition. The one that came about was Scharf, a Fedex partner in SA with significant volume - but the sad truth is that everything went quiet about their contract until it was learnt that there were operational issues - so to me that clearly signaled to me that they were not ready to work with the bigger boys. I had also expressed numerous times here that I felt all the announced large prospective collaborations (UPS, DBS Schenker etc) would be just fact finding by the MNCs and cautioned not to be carried away until further developments are announced. But typical (and of similar microcaps) , 4C after 4C came and while they continued commenting on everything else that were less significant, the significant news about UPS were silent.
Microcap investors need to not just look at what was announced but what was visibly absent as well. You can also check that while Blockchain was mentioned in 17 Oct 18 Investor Presentation it was visibly absent in most recent 22 November 19 AGM Presentation. I may be wrong but it could be interpreted that blockchain is now not emphasised because it has fallen off its tracks (either it would be more $ consuming that the money they had or it could be shelved for the time being or it is beyond their operational capability). And Rhama, when you pressed and got no answer, then it appears that the company is not wanting to divulge and be transparent on its position and status. No answer basically sends a bad vibe, this is a public listed company.
But the one that caused me to express caution here was the ridiculous amount of performance shares issued to the owners of Yojee, I believe 200m shares that bloated the share base. This was issued nil of consideration and substantially diluted the shareholders of YOJ, unjustified for a company with miniscule revenues. It may have been structured as part of the deal of Yojee back door listing into Southern Cross Resources then but was cleverly structured by Ed at the future expense of YOJ shareholders. He is already way ahead despite the share price tanking. I believe a lot of holders were not happy with this but they often forget to look at the share base when determining the valuation of the company- since the value of the company is not its cheap 5c but its shares X share price ( A company with 1 billion shares at 5c is worth $50m and more expensive than a company with 10 million shares at $4 ($40m) ).
As for valuation see my post below
https://hotcopper.com.au/threads/its-over.4002109/page-738?post_id=37658921#.XiOTEDIzappFinally, my concern around its revenue model. I often expressed that its revenue model while recurring and scalable but unlikely to generate enough $$. Short of a big ticket contract with the big boys, the SEA adventure even involving subsidiaries of MNCs (like Geodis) will likely only deliver not material revenues after conversion to AUD. Their recent wins in Malaysia are not contracts with substantial contract values. And if you look at their pricing model, what was announced in their 17 Oct 18 presso, licence fee for MNC and SME were USD50k+/month and USD2-10k /month respectively had been reduced to USD1.5k-4k/month for MNC and USD400-1500/month for SME.
In a space of 1 year, they brought their pricing model down by 80+% - that tells you IMO that they were originally too dear for the SEA market that is cost conscious. Now if assuming they can win 1 MNC contract a month @ USD4k/month licence fee and with 200,000 transactions per annum @ USD0.20 per parcel, thats USD88k per month X12 =USD1 mil/pa =AUD1.47m pa revenue prospect [ I even doubt they can win 1 MNC contract every month, if so they would surely be announcing this, even winning 1 they would announce ]. And this is already much more than their stipulated contracted win forwards of $1.2m over next 24 months. So working out the maths tells you that numbers are not compelling and unlikely to get them even on break even basis , UNLESS they can land a big deal. But the big deals are not in SEA.
Which leaves me as I mentioned here in my previous post, their prospect would be a lot better ,as an investor looking at multi bagger in the future, if they were focused in the more advanced economies with larger spending power. The question lies in whether in the face of a crowded (many players) and competitive market they can gain any foothold over there in those advanced countries. Are their app good enough for those markets and if they are, they shouldn't be worried about competition - (example Promedicus Visage imaging software app is gaining foothold in US outbidding the GEs of the world there) .
Investors are left to ponder if they ought to subscribe for more shares and have an even greater skin in the game. Of course that is your decision and yours to consider, but in my view throwing more good money after bad , just to avoid dilution, probably makes little sense. And for a company that is very much now beholden to continued support from Thorley, they would need to generate all the cashflows they need to sustain that support, and when support is no longer there, you would be the last to know.
Take care and good luck.
(20min delay)