I respectfully disagree with you here
@Romann. Sentiment is indeed a bigger driver than anything else in equity markets and this announcement in the coming months will swing the sentiment pendulum from
fear to
greed.
There are many investors that I have spoken to, both retail and institutional, that are waiting for entry
once/if they have confirmation of GM renewal. The current share price at a $10 million AUD enterprise value does not factor in a guaranteed renewal currently -- it is thus
not a status quo event.
I'm grateful to have been able to pick up another 500,000 units at 1.4 cents. Shares are being consolidated into stronger hands who understand the opportunity that lies ahead and are backing Aaryn Nania, the
new VP of US Sales, the
new board, and a
growing team (see below) to execute.
Sure, there are plenty of traders/investors who might sell out in the 2-3 cent range once they are up 33-100% (upside relative to a 1.5c AEP), but many investors will be entering at this point once the path forward has been completely de-risked with confirmation of renewal.
Another point to consider is how the new T20 will act going forward. The current T20 is materially different from a couple of years ago or even from 12 months ago. Are they in this for a quick profit or do they understand the upside that is possible here over a couple of years? I'm willing to bet it is the latter.
Aaryn's approach of under-promise and over-deliver is currently flushing out short-term investors and traders, who are impatient and fearful of lack of news/progress updates.
A GM renewal strengthens the investment thesis, creates a runway of future cashflows and presents further growth opportunities within the GM ecosystem and with commercial partners. Many savvy investors may even average up into the news once/if the proposition here is de-risked.
Depending on the specifics of the pending announcement with their blue-chip client (i.e. pricing, contract length etc), a shift in valuation from ~$13 million (~1.5 cents) to ~$30 million (~3.4 cents) overnight is
not at all impossible.
Based on ASX and NASDAQ comparables, even a SaaS company with
no growth should trade on a minimum of 2x ARR in a trade-sale. If CXZ can generate some growth out of GM in the next couple of years (or other OEMs), a 5-10x ARR multiple is possible. That would be a multibagger opportunity.
The incentives of Aaryn and other key CXZ personnel are aligned with ours -- let's wait and see how the coming months play out.
https://www.seek.com.au/job/52087278?share=li
(20min delay)