There's a serious disconnect on this stock between the under performance to the Prospectus and the stock price ... now essentially less than half the prospectus price. There's lots of people running around saying get out get out, Macquarie have raped everyone, this is a lemon. There's a hysteria about the stock.
How about some facts - revenue is forecast to miss prospectus by about 15%, with mgt inferring timing differences, not lost share as the major culprit. EBITDA is still being forecast to basically hit prospectus. If one just looks at that these facts - SP sell off seems way way overdone.
However - it is also clear that there's serious problems with the leadership, and the market has lost complete faith in them. I know the CEO was out selling the business to the biggest retail brokers in the land last week, as well as likely insto's as well ... everything was being sold in a positive light ... yet Monday they announce a revenue downgrade - NOT AN EARNINGS DOWNGRADE mind you, but still very bad form and the market has punished them again.
The CEO is a not well regarded by the market, and I also have this from some of his ex work colleagues in the US. Nor is the CFO is the feedback I get from my network.
I have mentioned before that the company's product is well liked by those that use it. I would urge those who can to speak to the legal profession or other NXL customers and find someone who uses it - my bet is that you will get a positive response. "Can't do without it" was one persons's feedback to my network.
So here is how I see it. There's going to be more movement in the senior ranks - the market & major share holders will demand it. There's going to be sharks circling because the product is good, and the share price leaves them very vulnerable. The AFR already has stories of consultants being hired to prepare defensive strategies to take overs.
The sell off is way over blown if one just looks at the 2021 forecast result versus prospectus. The share price rise to $11 was just as absurd, but because the IPO was so oversold, demand ensured a crazy price rise.
Just as Warren Buffet bought Amex back in the sixties when it was embroiled in scandal, and other shareholders fled, he bought because he spoke to Amex customers who all said they would continue to use the card because it still best suited their purpose; I will be buying NXL at these levels and below, because their customers also highly rate their product. All this other noise of poor mgt, staff loss, and scandal will disappear, ( just like it did with Amex) and in time I suspect new leaders and maybe even new major owners will ensure NXL reached its potential ... and that is way north of $2.70 something
There may be even further downside in share price because of year end tax losses being taken, but I see that as an opportunity. I won't be doing anything crazy, but will be buying NXL at these levels and lower. The disconnect to my perceived value of the share is too large at present not too. NXL is no lemon - their mgt team maybe.
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