The Good, The Bad and well, The Reasonable.

I decided I would make a topic taking in some of the good and bad points, all I am seeing currently is down rampers who don't even hold. I will miss some things so perhaps other members can add constructive points to the topic, this is a discussion about RFN. Nothing else.

First let's just knock out the fact many people have lost a lot of money, people got excited and greedy, expectations became unreasonable. I have lost many thousands of dollars myself, I haven't calculated exactly how much yet, but based on the fact that my last buy in was 36 cents it could possibly be over 50% including profits I made on the way, but also heavy losses, and it sucks, especially when you think about all the work you put in to make that money, the hours at work, the saving, the endless hours spent studying the stockmarket and searching for opportunities. However do remember that there are companies that explode upwards, there are quite often more than 10 companies blowing up over 20% every day, you can make that money back. I had a turn of good luck on a very risky gamble and SGH increased 100%. Just like that I recovered a lot of losses, if I was lucky enough, you could be too.
I also just want to point out the importance of diversification, I keep seeing comments saying "Diversification is for those who don't do their research" - Warren Buffet. How many companies does Berkshire Hathaway hold?

Also a note to the down rampers here, congratulations, you were right, we were wrong, good job, you saved your money. We get it, there's no need to come here daily to remind us that you are smart and you do not hold and proceed to talk the stock down, it's a waste of time and it ruins the discussion and causes arguments, if you spent half the time you do negatively talking a stock you are not going to buy to boost your ego and used it researching other stocks you would probably make some money. the trajectory of RFN now is clearer, and that it will be slow going, so let us have our discussions and you can move on to a different stock. Thanks.

So on to the points, They are not in a particular order of importance for the most part, the first point is however, I am just laying them out as they come to mind, I am slightly hungover so we will see how it goes. So here is the good, the bad, and the reasonable.

1. It is a small cap tech company: - There were a few pros on here after IPO that knew, and they said it would take probably four years before they made any revenue, some of them sold up after the 4C and disappeared after that, and to be honest we are all quite foolish for believing that it would be any different, these smart few obviously had more experience and saw how this was going to go, however the good news here is that RFN is actually quite on track if not doing better, when you look at it on a reasonable timeline compared to other start up tech stocks.

2. Management : - Misleading, they too were fools for forecasting the break even time, perhaps they legitimately thought that too, however I have always been under the impression that profit forecasts are a bad idea, especially for small caps. They may not have lied about rate of signups, however the drop off of clients wasn't accounted for, so again it was misleading. The poor graphs and that stupid accrual revenue one that didn't make any sense, all poor choices. To their credit they perhaps weren't sure where RFN was heading either, but they should have been far more conservative. Put the pitchforks and torches away, they have listened to us now and are changing the way they do things. They have share incentive to make this company do well and I do point out that I believe they are competent, they all have good experience behind them in similar fields and have had many successes. They have also hired some pretty significant people, people that know what they are doing. While past f*ups make me nervous, these are competent, successful people and that gives me a lot of confidence.

3. What we know : - On the upside, management has now shown they are not trying to mislead us, they've put together nearly all the info we need to know together, easily displayed in a simple to read document. We now know exactly how much each client is roughly worth, which is $13,338 per customer per annum, which is not bad. We also know that there is no free trials for anybody. We know all the pillars of pricing. We know how much they estimate cash burn to, be very important. We know exactly how many clients we have, and what rate that has been growing, which is important and we know who 25 of those clients are at this time. I point out that some of these clients are significant. Reffind actually does a very large amount of research on the HR sector and has a lot from Wooboard, this database is going to bring value to the company over time.

4. Revenue : - Excluding one off costs, Revenue has increased 14% from last 4C. Not a lot and is less that we need, which is bad news, especially since cash burn has increased significantly more than that, however Revenue will be lumpy for the company, and there is a valid point made that client uptake overseas will be slow to begin with. The longer Reffind is around, the more people will hear about it and a snowball will form. It is still too early to see where this is headed, current numbers are pointing upwards which is a good sign. Reffind perhaps could evolve and become complementary to something, perhaps integration with slack, it is a good product and is still improving, so it may provide more worth to customers in the future, and more value means more clients. Also bear in mind if the average is $13,338 per client, and we have 80 clients, that is $1,067,040 which is about 250k per quarter which is not bad. However it begs the question if the lowest tier is 2000 per month how we can be earning less than 24k per year per client, unless of course that is taking into account previous pricing and discounts offered to wooboard clients. That needs to be cleared up ASAP.

5. Cashburn : - This is a point of particular concern, and it always is for Start Ups. If someone could comment exactly how much JP is being paid directly and indirectly, what is this D4GE arrangement exactly? Spell that out for everyone that would be fantastic, I have seen the numbers thrown around, while it is common for directors to serve on many boards, this does seem like a wrought, buying shares right before bad news and a cap raise to increase confidence makes it look worse. Paying yourself many times more than the company earns when you have other revenue streams and ripping off shareholders for that money isn't fair, and it's possible we can actually do something about it if we can get the exact numbers and be civil about it, again put the pitchforks down. If JP does want this company to succeed and make him more money I am sure he will need our help, and if he thinks that his salary is counterproductive to this then perhaps it could be negotiated that he takes a pay cut. Between the 19 staff listed on their site, average annual pay is 157k per year, if I am looking at salaries correctly, which is extremely high considering some of the smaller roles in the company would be earning much less than that. It states directors fees as 149k for the last quarter.

6. Buy out: - Apps like these which could be integrated into something else in the HR space do leave a nice prospect of a buy out, there's always the chance the product offering RFN offers doesn't suit clients well enough, however integrated into another platform that is already very successful it could be a game changer, rather than RFN doing all the R&D. However this is just a little speculation.

7. Future ahead It is uncertain, this is a speculative stock after all. Bearing in mind the average 4 year timeline to profitability, the extremely strong background of nearly every role in the company (link @ bottom), the fact we have strong clients, and despite moving HQ and that January is a quiet time for business deals, we still have increased overall client numbers even with drop off, and that there is a snowball effect which could help us along, and that we now have nearly all the information we need, does RFN still look so bad?
The answer is no, it doesn't. It doesn't mean the company will ever go anywhere, or turn a profit, however all the doom and gloom being spread here and all the disappointed shareholders and downrampers make it look a lot worse than it is. Not many tech startups have made a profit in the first 9 months after listing, it's highly unlikely, again I point to the four year timeline, and the closer it gets to that profitability mark, the more excitement is going to build and the more money we stand to gain, Tech stocks historically have had some of the craziest growth stories and made many people rich, but these things do take a lot of time and money to get going, and anybody with patience and a vision can see that it still has just as much potential as 9 months ago, and that nothing has actually changed. In fact it has only improved, more features, more clients, more revenue, more understanding of where it is going, how much money it will make per client and how long it might take to profitability is all much clearer now and overall it is a better investment (It is cheaper too.) And let us not forget that they have now found themselves a nice little spot in Silicon Valley with a veteran expert now helping them steer the company.