One final thought; it's fascinating analysing how interdependent the share price and market participants are. Or rather, how infatuated and completely absorbed by the share price the financial community is.
Holistically, ask yourself and try to answer this question: 'in what specific way/s has Fluence failed since the merger, and how significant were these failures?'
I have brainstormed long and hard as a means of reassessing my investment thesis, and have only a handful of failures that I can conceive - all of which I can dispel immediately with sound retorts demonstrating strong fundamentals and robust financials:
Failure 1): The company missed revenue guidance of US$90M. Resolution: the company has stated that whilst it expects CY17 revenue of US$60M, it has its largest ever recorded backlog of US$95M of which US$75M is already locked in for CY18. In other words; before 2018 even started our revenue had already grown by 25% from US$60M to US$75M. But that's just backlog; throw in a further US$40M - US$50M from fresh new 2018 orders, and jesus ... we're achieving 100% annual revenue growth.
Failure 2): Slower uptake in China. Resolution: this is actually a common misconception that has been propagated across HC and the wider investment community. Yes, Emefcy undoubtedly made statements that Chinese partners would be making 10,000 unit orders (i.e. $100M); however, management never stated it would happen in 2017 - they didn't actually specify a year, for that matter. It was the general populous within the investment community who came to the outlandish expectation that China partners - some of the most regimented and cautious global players - would immediately throw $100M into a foreign run project. I am by no means not saying this won't happen, given the strong Israel and China ties, but it takes a moderate ramp up prior to such orders being placed. On top of this; we already have had our first two C-MABR deployments in China - with the latest 6 unit order valued as a multi-million dollar sale. Additionally, as I mentioned a few weeks ago, after speaking with Johan - the Canaccord analyst who wrote the FLC research report - he stated that material ramp in China would occur in H1CY18, but the true orders would precipitate in H2CY18.
Failure 3) Delayed time to profitability. Resolution: this is again, another unrealistic expectation imposed by the financial community. Never before had Emefcy outlined when it expected to reach profitability, and when Fluence provided a realistic guidance, the impatient and short-term investors / traders threw up their hands in indignation and p*ssed off, stating that it was a delayed path to profitability. This is factually just incorrect. Ironically, those 'hypey' companies in the market at the moment which don't give guidance of time to profitability, but which clearly won't reach break-even for 5+ years, are the ones that do the best - as investors can continue to live in their fabricated, misinformed worlds of profitability being hit tomorrow. Nevertheless, as I also mentioned a few weeks ago after speaking with Johan, many global and domestic funds have stayed out of FLC because it won't reach profitability until Q1CY19 and the opportunity cost suggests investment elsewhere. However, all these funds will begin entering FLC in 2018 in the lead up to profitability being achieved.
Failure 4) allowing material dilution through the 10th largest hedge fund in the world entering the share registry with a $10M capital placement. Resolution: fun fact ... we won't to get rid of as many transient, flipper retailer investors / traders as possible - best way to do that, is bring on institutional investors to the register who will the continue to buy on market. Oh, and also ... it's the f*cken 10th largest hedge fund in the world ... what stronger endorsement can you get.
I have racked my brains for weeks trying to find what I missed, which might justify this share price pull-back. But as I mentioned today, there is nothing and it prompts me to believe we are sitting in Phase 3 of Phillip Fisher's market appraisal theory. 2018 will bring Phase 4.
(20min delay)