Pretty negative spin and lots of half truths there, it seems that many are seeking to scare the herd into truly ludicrous valuations. I agree that things still look precarious and with an ugly macro backdrop, but lets have a little balance, point by point:
1. This half takes us to December 31st 2015, sales have lagged behind initial estimates but aren't far off the initial goal of a $5 million run rate for 2015 (equates to a final quarter of $1.25 million income). This number also has nothing to do with the company's guidance for 2016 of $18.5 million USD, or $26 million AUD at current exchange rates.
2. Receivables are only disappointing if the earlier assumption of universally long settlement terms prove to be correct. The company indicated that the major mattress manufacturer wouldn't ramp up until January and even then tweaks including crock ban and expansion to their second line may have stretched things even further into 2016. Still plenty of time to ramp up revenue to hit the $26 million AUD target.
3. Not sure where you get that cash burn will take us to a cap raise in 6 months?! I think you need to re-read the financials and realise that loss booked is not the same as the decline in cash. It looks like we've got comfortably more than a year of capital, and if you believe the $26 million AUD income for 2016 (which again I do) the need for capital looks even more remote.
4. I agree that the company need to issue formal guidance if they want the $26 million AUD to have credibility, otherwise if we here believe that Jstall's email is genuine (which I do), should count ourselves lucky to have more information than the general market and take advantage accordingly.
5. I care more about sealing deals and running the business well than typos, indeed I couldn't really care a great deal about company perceptions right now, I have no intention of selling any more for a long time (indeed will be topping up), and don't see any need for the company to raise capital near term, hence polishing the image isn't so important.
6. Cowen are trying to highlight the OTC availability of AJX (an American success story) to local investors and potentially generate interest/appropriate valuation through that market. Given OTC usually = pink sheet dross I'm not sure why they're bothering or what they hope to achieve but given the stream of nonsense produced by current/former/potential ASX investors today I can't blame them for looking for buyers elsewhere.
I'm now pretty convinced of a bottom near term, and hopefully a strong rally, I see threads trying to paint the company as a failure when we don't have any indication that, that is the case. Technical threads stating new even lower downside targets. I concede that calling the bottom will be very difficult but I also expect the trip there to be brief and violent, hoping to pick it or wait to spot it whilst it happens will be very tricky, and so I'll just keep buying into weakness for now.
AJX Price at posting:
55.0¢ Sentiment: Buy Disclosure: Held
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