Hat tip to
@OllieTwist,
@ilikethestock, and a few others for injecting some commonsense back into the forum.
For the long-term holders - I've been doing a bit of digging into the Kaddy acquisition...
Purchase price of $34.35m ($6.75m cash + $27.5m in shares @ 0.05672, or 484,85m)
What I was interested in is the vesting schedules and performance requirements, in light of the commission changes and recent Q4, and how these impact value if not met.
Consideration Shares = 340.4m shares with 50% (170.1m) to vest pending certain conditions, GMV targets, and continued employment. I reached out for confirmation from Dean, and the GMV for consideration shares have a
3-year expiry post completion.
Performance Shares = 100m shares with the below conditions with a
4-year expiry post completion.
Kaddy acquisition priceConsideration shares = $9.648m
Performance shares = $5.672m
Everything else = $19.03m
Therefore if Kaddy doesn't hit its GMV targets and Revenue targets, there will be a material reduction in the acquisition price.
In addition, the recent adjustments to marketplace commissions down to 1.25% on the largest plan, works in the favour of shareholders. It means in order for the 'TTM Revenue Milestone 1' to be met, GMV needs to be well north of $100m...for example, $400m GMV if all suppliers opt for the 1.25% plan (unlikely but provides a solid example).
I think it's highly unlikely that Consideration shares won't be met, but Performance Shares will be considerably more challenging to achieve.
As C.Munger said, 'Show me the incentives, and I'll show you the outcome"... Imo, considering there are 270m shares as a proverbial carrot, this will keep Kaddy founders & employees hungry. Overall a win-win for lth.
As for the Q4 result and the doomsday dummies...read a book. Only fools make investing decisions based on a quarterly, especially on a seasonal business. Fundamentals remain solid, Kaddy/DW8 solves a real problem and has an excellent team in place to navigate the intricacies of running a business.
Also, the Kaddy amalgamation appears nearing completion...Dean is now using kaddy across all emails and branding...Looking forward to the GM where we officially vote to become Kaddy (ASX:KAD ?), and when the first lot of Kaddy trucks/vans start rolling out.
Cheers
(20min delay)