Hi Superheat,
Great question. I believe we could analyse a number of different factors and weight them -
Prejudice aside, I will do my best to review each…
1. Covid
2. Karl
3. Competitors
4. Product Offering
5. Market
6. Cash burn
1. COVID - While I do believe COVID has affected the sell in of LiveTiles product suite into enterprise clientele, enterprise based SaaS sales have been affected across the board yet prices have been tracking north so I don’t give this reason too much weighting.
2. Once again, prejudice aside, Karl has made a lot of promises that haven’t materialised (even when the company has been tracking well but not to the standards Karl has projected to the market). Add to that the employee lawsuit a few years back directed against him and Peter. Add on top of that the lawsuit with his brother that has cut our cash balance considerably and investors just get a “we can’t talk about it any further” response. Add on top of that his lack of acumen in investor calls and his inability to communicate strategic direction. Furthermore, he has publicly come out stating he believes no further credit raises would be necessary, only to credit raise shortly after. When investor calls are saying you’re ingenious, it’s usually because you’re ingenious and the market doesn’t trust you. Case in point, the market doesn’t trust Karl with their funds (especially when he pays himself over a million per year while those companies you mention whose prices are performing strongly have modest remuneration packages). Prejudice aside and just looking at the facts stated, Karl hold a lot of weight as to why the price is where it is at.
3. Competitors - While there are a number of competitors in the market, I would go as far as saying there are none with the pedigree of clients LiveTiles has (and has maintained for a number of years). I would rank this as low with an asterix condition as I would want to know what influence the inception of Microsoft Viva is doing to market confidence.
4. Product Offering - once again linking to point 3, I think we have a strong placement in the market with a strong global product offering. Would be great to give potential investors more visibility of the product offering, not just potential clients. I would rank this as low.
5. Market - there has been some SaaS gurus on here saying intranet is dead and there is no need for it. I believe to bundle LiveTiles product suite as simply intranet is too simplistic. I believe there will be a strong growing market post COVID for LiveTiles product suite (remember global business districts are not as fortunate as we are at the moment). However, I do believe at present there may be concerns in market that businesses are not looking at upgrading their communication and collaboration suites just yet. Medium ranked impact.
6. Cash burn - The company has reduced their rate of cash burn but this hasn’t really changed perception in the market. Hopefully when LiveTiles gets to break even this will improve and LiveTiles shakes the cash burn mocker. Given the hit from the lawsuit to cash balance this has probably resurfaced as an issue. If cash was still at “in the clear” levels then I don’t think it’s be any issue to the price. Medium to high impact.
Overall, my view is that the market just doesn’t believe or trust anything Karl is communicating to the market, which is having a high impact on the price. Coupled to this, the lawsuit that directly involves him and his brother has put the “needing more cash” and “cash burn” mockers back in the arena unfortunately. Even if cash levels are sufficient, it still has created a perception.
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