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Similarities between ZIP and Norwood Systems (NWD), page-29

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Stockrocker

7,057 Posts.

98

02/01/15

11:01

Post #: 14527242
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Originally posted by Amused observer ↑

Stockrocker, Sure but I tend to only reply to smartass rhetoric with like....however you ask with slightly gritted teeth it seems so I shall take your request as genuine. Here is my view summarised into bullet points, in no particular order.

1. Future revenue is extremely thin and based on a single product in a non-domestic market - presents a company survival risk as this product is the single source of company profits and it has a currency issue it seems as well so as a shareholder there is not a lot to hang on to.

2. Future earnings based on the pricing samples offered in HC over the last 2 weeks might seem sexy from a user perspective so long as the user is prepared to waste an inordinate amount of time getting it to work but the reverse is for shareholders the margin, if any, would appear to be ghost-like for exactly the same reason.

3. It is still in development it seems (and as quoted by others) with the usual app. dev. teething problems - early in development cycle or using an iterative development approach and either way they will need funding for ongoing work and with no cash-flow this will need to be funded from somewhere, either debt increase or further equity raising resulting in dilution of existing shareholders value. They can do this up to 15% of issued value without shareholder approval by the way.

3. Low on funding to support existing costs so no robustness around possible delays of product release, market build-up, lead time to revenue etc.

4. Marketing I hear someone cry, gotta get it out there, gotta give it away for free....anyone have any idea how many single thread apps are thrown out into the market for free, daily? Specially in the telco, mobile app space if not then consider the dotcom era and the junkyard left behind let alone the destitute shareholders and punters who were holdings low cap narrow revenue listed entities. History should be a good lesson. Yes I am aware of various marketing techniques and approaches but am also well aware of the requirements a company needs to be able to sustain these.

5. Business retention - this single app. is highly market mobile as there is no user retention other than transaction price and there are and have been other offers in the past and are current today. So how is this company with a potential single revenue source expected to have any sort of consumer retention and security over its revenue.

6. The company is very light on in regards its governance structure, let alone directors with business depth or presence. Investment confidence factor and the seconde part is given what they are trying to do it isn't exactly exciting a large pool of possible directors to join them.

7. The dotcom era in Australia was a harsh lesson for many start-ups and young guns who thought they were going to rock the world, including Michael Vallender for that matter (will be interested to see if anyone here knows who he is and his connection to this forum). Australia is not exactly flush with successful ICT companies and the current appetite in Canberra for the tech sector is beyond ignoring, it just about wants to remove it from any economic basket or conversation. Where does this leave a little guy like ZIP?

8. Their own website isn't exactly readily available for whatever reason or excuse and this is a cost issue as running and maintaining a web presence, certainly as an ASX listed company, is not a cheap exercise. It raises alarm bells in terms of professionalism, funding, resourcing and general capability, are they not a tech. company?

9. Want any more?...

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Thanks for the reply Amused:

1 They do have other products, one is called Assiesim- but I don't have much faith in it as it could easily become obsolete when big telcos start tightening up. Yes there is a risk when a company's future rides on the success of one product. You could say that about Facebook as well - a single free app. And what currency issue are you talking about? The lower AUD gives us freebies as everyone pay us in USD. $1 USD= $1.23 AUD does it not?

2 Not hard to use, just download, register, and use. How much easier can it be?

3 ZIP have about $7 mil in bank, enough to make an impact quickly. It's mc is under $20 mil. The target market is, well, the whole world!

4 Not familiar with the Dotcom era but from what I'm guessing a bubble was created when every dick with a Dotcom website gets listed and their shares took off. ZIpT is a communications tool targeting the global communications market - not just any free app. That's a big market, there should be enough room there for a mere $20 mil mc cap company to eek out a living if their product is proven to be usable. Still speculative to a good degree obviously.

5 Being mobile has its advantages, anyone one anywhere in the world can access it. Having a very large market means ZIP only needs a small percentage of the users to retain and use its product, namely the premium service, in order to grow revenue. It's calling rates are very competitive.

6 Agree. I feel more comfortable if a hacker is on board as well. But if every success requires a hotshot with a formidable track record then the world will get nowhere. One thing ZIP founder seem to have is a good business plan and they are following it.

7 Yes Canberra loves resource companies, maybe they shouldn't rely too heavily on one sector. ZIP does not need to be the next multi billion dollar company. When it starts making small profits the business will grow and evolve - hopefully.

8 Maybe too many visitors to the site causing it to crash? Or maybe they want to limit the uptake first? Money isn't the issue as I can't imagine it costing $7 mil to keep a simple website going. Their company website has no issues. You can get all your facts there.

9 If you have.

MRY Price at posting: 1.7¢ Sentiment: None Disclosure: Not Held

ZIP Price at posting: 27.0¢ Sentiment: Hold Disclosure: Held
5 Upvote

0 Great analysis

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