Path To Profitability, page-9

appreciate you sharing that, writer.

bears out what i;d been surmising- though i'll take more convincing than a one off anecdotal that smart city buyers are fast buyers en masse. Though i reckon if they focus on rich hippy states like Oregon, Washington and California the takeup rates will tend to be faster.


the thinking he outlines is lucid, the plan cogent - the problem he has is matching real world time vs the damaged expectation profile of investors who bought 25c-8c.


however- he;s simply wrong about how the market was pricing the 2 failed deals.

1) Both of them were earnings dilutive year 1 - ie they didnt bring visible earnings sufficient to support the added share dilution required to buy them. His own message was that both Noveda and Zentri were largely about tech and lead acquisitions but that would require further BUD investment and resources to turn into cashflows that would make the acquisition premia worthwhile


that leaves the market no choice but to partially price in (ie sell down) the dilution prior to a deal being cemented - and only add back the earnings value once they occurred

esp in a risk off market - as was case for tech for 9 months or so of 2016

2) the SP reaction post the event hasnt added anything back because the stock is not yet intrinsically 'cheap' given there's been no tangible sales/earnings lift that would bring buyers to the stock

essentially he announced dilution that deflated the inflated/hype time valuation - then when smoke has cleared the dilution is much lower - but the stock still boasts a 20x sales/ev valuation with no clear momentum in the financial reporting just yet (ie still high cash burn) - though Parse certainly sounds prospective for that.

more importantly the management misadventures mean BUD is not longer in the Aussie tech investor narrative. It now needs to hit some runs to become a stock worth talking about again.

it reads like he's been reading what i've posted.

cough* Dave - i really should be getting paid for this level of clarity.

again - appreciate your sharing that information. im comforted that the thought process is what I think it should be.

and i do think the stock is positioned now with more upside surprise risk than downside.