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GSW Takeover Target, page-5

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kobbie

552 Posts.

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23/01/18

08:42

Post #: 30486937
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Originally posted by shaunmac ↑

I have to say that I totally agree with HC member Tcb007 who posted this link to demonstrate what type of questions the ASX compliance team were asking of another up and coming tech company DUB:

https://newswire.iguana2.com/af5f4d73c1a54a33/dub.asx/6A817448/DUB_Response_to_ASX_Query

As an investor in GSW I hope that the ASX compliance team have asked the same questions about every single contract that GSW has announced as a public company so, as a shareholder I can then make an informed view of what this company is worth based on predicable revenue that is forthcoming. My valuation of this company to date has been based solely on the announcements of the company, which as a shareholder you hope are true and correct. Lets see what the company announces to the market tomorrow.

Overall GSW as a "business" is in great shape as a growing tech company based on actual numbers that we know of. It has zero debt, $100m in the bank, 100m odd shares listed and a business that as Joel put it has "geometric Growth" of 50% per quarter.

This so called Geometric growth of 50% per quarter which would equate to 340% pa is so far as we know it revenue growth based on smaller contracts that have so far been signed. I doubt that NA Williams, Amazon and Yum have contributed to revenue as yet so one can only imagine these contracts will increase that 340% annual growth figure many times over when they start contributing.

So with $100m in the bank and a company that is growing at 340% pa min, this company then becomes a very attractive takeover target if the SP does take a hit when it opens again tomorrow., which is still an "if" as the company may well still surprise us with their response.

Its a no brainer.....show me another company on the ASX that is growing is revenue at 50% per quarter, not 50% per annum, that has no debt, $100m in the bank and management that own a substantial part of the company

It could be an existing customer like Amazon? Paying a net figure of $200m ($3 per share minus $100m in cash) for the last mile software that they need to complete the puzzle is a drop in the ocean - it would take them years to build something similar and they have shown already that they cant get this part of their application right, hence the deal with Getswift.

If Yum are spending $37M pa with GSW once fully deployed (250m x 15c) paying a net figure of $200m for a technology that they can own and take the fight to dominos head-on and also pickup up a business that is growing at 340%pa.

NA Williams conglomerate of customers could band together and buy the business, especially if the conservative figure of USD138pa (AUD170m) of annual revenue spend as a group is true, its a no brainer if someone has the foresight to put a deal like this together.

It could be a potential customer like UPS, Fedex or DHL?

In my view a more opportune acquire would be a private equity group - if the SP does take a hit then this is right up their ally and you would think a number of these groups are already running the numbers - I know if I was in PE I would be frothing at the mouth with an opportunity like this potentially coming up. Take the company private for a net figure of $200m ($3 minus $100m cash), take it out of the spotlight for 4 - years or so and build it into a $3 - $4b business - this business would easily list back on the ASX or even better the NASDAQ at 30+ times earnings once it is highly profitable.

I think if the ASX compliance team do their job and ask these questions that they asked of DUB earlier this year, then it will-give us investors and also potential acquirers a really good look at where the business is and what its potentially worth - https://newswire.iguana2.com/af5f4d73c1a54a33/dub.asx/6A817448/DUB_Response_to_ASX_Query

Remember the "Business" is a very strong "Business" - a business that is growing at 340% pa minimum, is a very strong business. The daily share price movements have no effect on the actual business. The share market is full of opportunist players who will do anything to make a buck - and in this case I am referring to the hedge funds that dug deep enough to uncover this information, took it to the AFR columnist who they knew would create a frenzy by publishing this story and then conveniently opening their short positions for the initial onslaught, then get the hell out of there - I would do the same if I was a hedge fund manager - thats what you do try and find ways to line your pockets.

To summarise, this business has no debt, has $100m in the bank, has signed some monumental contracts and there would be plenty in the pipeline about to be announced, and is growing at minimum 340% pa.

Yes their name will take a hit from this but thankfully their big revenue will come from the USA and other countries much bigger than Australia, where this tiny storey from an unknown newspaper will not even cause a blip on their radar.

Once this blows over and the short sellers have covered their positions and lined their pockets, there is massive potential for this very healthy business.

On the flip side, if management do come back to the market with the right response then all bets are off I would not even consider parting with my GSW shares for $3.

Also, be careful of all these new HC posters that have just come onto the GSW thread in the last two days – most of them will be hedge fund traders trying to install the fear of god in all holders by talking the SP down to ridiculous numbers so they can line their pockets.

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good point, I always thought that there is an agenda here, as I have said before there is lot of people who do not want this company to succeed especially those who have a vested interest in what this company does, I wouldn't rule out some under the table stuff going on either

GSW Price at posting: $2.92 Sentiment: Hold Disclosure: Held
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