I’ve been giving short term SP direction some thought and...

I’ve been giving short term SP direction some thought and unfortunately I think we’ll test resistance at 25c. Whether we go through that I’m not sure but we’ll go lower before we go higher.

The key reason for this is I’m not expecting any material announcements for the next 6 weeks until the 4C drops on Friday 30 April. That will be received negatively IMO because it should show negative operating cashflows.

Sure the headline revenue growth will be strong but I think the casual investor will look through that and focus on the weaker operating cashflow. This will also show a trend in declining operating cashflow as Sep was +212k, Dec +60k and March will/should be negative.

We can be pretty confident that cashflows will be negative as equipment sales, primarily Zoleo, have been ramping up to support growth in North America. So payments to suppliers will be high as this is incurred BEFORE sales are generated.

Secondly, as margins on Zoleo are low there’s not much GP to offset the rising COGS to support increased demand.

Finally, we know that Zoleo airtime is excluded from the 4C as it sits in the JV. So unless there’s a huge reduction in trade receivables that’s the way I see it playing out (note: I don’t see SatShop or the other parts of the business materially offsetting the Zoleo impact this quarter)

I think a weaker 4C will be good for us long term as Michael really needs to start showing the market some operating stats and financials on Zoleo otherwise we just won’t see any interest in the stock until full year results where they’ll certainly need to improve disclosure. I know he’s hearing the feedback and we know he has some skin in the game so the ball will be in his court to start marketing what most of us here already know - that there is some serious upside here.

So unless we get some material news about expansion into international markets soon, the next market sensitive announcement will be the 4C and that won’t be great - IMO and yes I could be wrong. I also don’t think another retailer selling Zoleo will move the needle much if an announcement for something like that comes out. Hopefully I’m wrong as we all want a higher SP but I call it like I see it.

Just for the record I’m still super positive on the outlook outside of the next month or two. Buying window perhaps?