“I, also believe that not in any way. Have, you put hard earned capital like I and others have. My input, went up to $210,000.00. This input, along with other investors from the start of this. Have enabled financially, for these people to do and have what they have”Believe what you like. I’m not going to start posting proof of my personal financial holdings online in a public forum.
I do feel for investors like yourself who invested large sums of money in the IPO at 20c and in the months after in the run up to 80c or whatever it was and never sold.
Having said that, you had a great opportunity to make a serious return post IPO. I’m not sure when you invested your so called $210,000, but if half of it was in the IPO, you would have been sitting on a substantial profit in the weeks following listing.
The Company had a $30m MC at its IPO issue price of 20c.
At that point the primary investment thesis was expansion of the NZ operations and working capital to increase sales into growing demand in China.
Taken from the initial prospectus for Keytone below, if you were investing at IPO or shortly thereafter, you were investing in:
- A business that had struggled to grow top line sales in the last two years.
- A business that was generating a small operating profit in FY16 and FY17, however where JG and VC, the founders, were barely drawing a salary.
- A business that acknowledged in its prospectus, that under a listed, consolidated, model it would not be profitable.
How this ran to 80c, or a MC of $100m+ after IPO on annual revenues of $2m is just purely ridiculous and shouldn’t be used, in any way, to compare and complain about the downtrend to the SP today.
Again, you were in a fantastic position as an IPO investor to sell into this post IPO hype or even free carry your initial investment. Instead, you state that you invested more at these lofty and unsubstantiated inflated valuations.
View attachment 3503927Don’t let poor investment decisions in the past cloud what it a great opportunity imo right now with KTD. I’m not sure what DD you carried out pre IPO or just after to make you invest more, but there is no point in looking back and being angry. You, and only you, made the decision to not sell at 4x your entry price and to buy more.
Right now there is a plethora of information available, along with a track record which shows the inflection point is here or very close.
Right now, there is a lot to support that the Company couldn’t be sitting in a better position for investment in terms of risk/return.
- Revenue has grown to well over $50m, with lots of short term upside from recent client wins, new protein bar facility etc
- Gross margins are holding relatively well
- The NZ and Australian CM businesses are EBITDA profitable
- Substantial cost outs have been undertaken recently to move the consolidated business to EBITDA profitability and cash generative
- The business is now well diversified into the health and wellness sector, a sector that is growing quickly and is about to see serious take up in countries like China
- Working capital is guaranteed via the recent debtor facility, which will support a doubling of revenues
- Market Cap is a minuscule $31m, yes the same as at IPO when the Company had $2m in annualised revenue
The only other comment I will make on the current SP is this. The Company currently has a “register issue” not a “business issue”. My short theory:
- The business was not performing to the Board’s expectations under James Gong
- Revenues were not growing and the second factory was significantly delayed
- The Board did what a Board was required to do in this situation to protect shareholder wealth, rather than letting the business deteriorate
- They replaced the executive team, while at the same time considerably diversifying the business, setting a new and wider focus in the health and well-being space. I’ll just say, at this point, if any investor was not happy with this, and bought in for the pure milk powder play, there was ample opportunity to sell at a reasonable SP.
- Ex founders did not agree with the acquisition of OB but were outnumbered- they were were not happy with being replaced
- Ex founders continue to sell into any good news that the Company releases in spite of the nature of their exit
- This is supported by the appearance of selling into news and selling regardless of the SP
If the above is correct, then there is a limited opportunity here, as the ex founders sellout, for investors to take a position in what is, in my mind, a compelling investment opportunity and what could be one of the best performing stocks over the next 24 months.
(20min delay)