On Track to Profitability, Price Target Increased (MST), page-19

CR is one of the popular words people like to throw around on this platform, I have another stock that has hundreds of millions in cash sitting in the bank and that prints many millions (growing fast) each year and is buying back shares, and I heard a punter the other day who reckoned they’d need to cap raise soon. Such a useless thing to spend time speculating about as none of us really know their specific capital needs, but assuming (and it’s a big assumption) that they are happy to remain focused on the US market and that the trend in the bottom line continues, then $6.5m should be more than enough cash in the bank to see them through this current financial year and into the next (where it is predicted they will be cash flow positive). $3.3m is plenty when you’re predicting cash flow positive in the next financial year, especially if a cap raise would require raising at a large discount at a low price. Obviously it wasn’t enough in March given they weren’t predicting cash flow positive in FY24, FY25 will be very different given the prediction of CF+. Again, even I don’t know for sure though which is why the whole CR discussion becomes so pointless. Maybe there will be a substantial increase in expenses this financial year (unlikely but we don’t get guidance to tell us otherwise), or they will want to speed up the global expansion for whatever reason, or perhaps the share price will rise to $1 by November sales update and they’ll do an opportunistic raise. We don’t have ears in their conference room…

I’m certainly not waiting on the sidelines or making any actions based on a CR and I do believe those who do this are a bit silly. At the end of the day, they’re the necessary cost for growth and will never prevent investors generating solid returns so long as they are invested in a solid company. If they need to do it they’ll do it, in the meantime they’re continuing to grow fast towards profitable growth.