I can't remember where I heard it, but I think it was either a movie or a story about Formula 1, it goes a little something like this.
There is a person who is being walked around the factory of the championship team.
Everywhere this person looks, they can see state of the art warehouses and offices, filled with people, the best equipment, facilities, R&D etc etc etc.
And they turn to the person giving them the tour, and the conversation goes something like:
"Wow, this is really impressive... How much did you spend last year to win the championship?"
"About $200m"
"$200m! In a year?!"
"Yeah, all of the top teams spent around the same amount"
"But $200m a year is so much money"
To which the person replies "If you think $200m is a lot to spend on winning the championship, you should see how expensive it if for the guys who come second and third, let alone the guys at the back of the field."
Basically, the point I am trying to make is I'm certain this CR is so we can accelerate the development of our world beating technology.
The primary take away for me is this: WP initiated this CR ***BEFORE the AGM***, he is doing this with the full knowledge that there will be backlash, and he will face it head on.
That takes stupidity, bravery or confidence. I'm betting on confidence.
Sure, we could NOT do a CR, and let things grow organically by just nibbling at market share over the next 3 years, OR we can raise the money to take the fight to our competitors.
I actually think it would be irresponsible of management to not take this CR and fund growth of the company because "Capital Raising" is a dirty word due to former mismanagement.
There has been a string of positive news which has seen the SP rise from 20c in November to 40c just last week.
The pipeline is solid, revenues are forecast to grow extremely strongly, and the thing to remember here, this CR isn't about survival, it is about growth.
YES, there was a promise. YES, the previous ones were poorly handled, and YES you will take a hit.
BUT I can't help but think the CR will be compelling, meticulously crafted, and most importantly it will demonstrate that this is not just so we can fight for the championship, but actually dominate for the next 10 years.
I know it is easy for me, I sold my position last week for a small profit, but I'm actually still down by about $80k (I made SOOOOO many mistakes on this stock).
I will be buying back in, with an even larger position, once the dust settles.
Money where my mouth is... I am calling a low 24c, but setting my buy at 26c. I'll post my trade confirmation once it fills.
I honestly hope holders get options or some other incentive to soften the short term hit, and I still think a 50c BBQ by the end of the quarter, and the original 50c BBQ by the end of 2020.
IMO - DYOR - NOT ADVICE - BLAH BLAH BLAH
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