Tech/communications sector start-ups inevitably have an extremely capital-intensive first few years; as 5GG are a telecomms company, they will need to spend aggresively to establish their network infrastructure and market their product to secure the revenue that will support the infrastructure in the long-term. Given the abysmal performance of NBN - I have never heard anybody speaking positively of this abomination of a Federal Government policy catastrophe - I hope the marketing and infrastructure roll-out are taken up in the Eastern states as quickly as in WA. The pitch is simple - cheap fixed wireless internet that avoids the nightmare of NBN cabling and easily scales over time with new developments in wireless technology. I've ranted elsewhere about what I consider to be 5GG's foolish SAAS game streaming platform strategy so I won't repeat what I've said about the capital allocated to that project, but I believe fixed wireless is a long-term winner and these guys know how to work this new technology pretty well.
5GG is a volatile early-stage tech/comms company. If you want to bank a ten-bagger then you have to buckle down for the ride. If money were easy none of us would be here. Basic value investing states reward is a function of strategically investing under-valued stocks, which in turn are undervalued as a product of risk and uncertainty. The reward comes from your recognising value in the risk and uncertainty that other people have missed or don't appreciate. Maybe you're wrong, maybe they sellers are right. Maybe you're right and maybe they're wrong.
These guys are better than most of the shills and swindlers who proliferate in a bullish tech start-up sector IMHO. But risk is the key issue here. Start-ups are risky. There is the chance you could lose everything. You could also win the lotto tomorrow.
Do your own research, compare to peers, be cynical but don't panic.
5GG Price at posting:
65.0¢ Sentiment: Buy Disclosure: Held
