The Short View

To begin with, I have no position in CL8 neither long nor short. However, being a student of a fundamental stock picking. I would love to hear it from the long view of the cl8.

Collaborate Corp previously, known as Qanda Technology, marketed itself as a p2p car-sharing/ caravan-sharing/stuff-haring company. There are a few shocking points. First, the administration and staffing cost are almost unbelievable. For a "tech start-up", CL8 is very labor intensive. CL8 has admin& staff to its revenue at 87% in 2012-2013. It has since gradually increased to 363% to its revenue, peaked in 2014-2015 with 398%. When a company earn 1 dollar, the employees are putting 4 dollars in their pockets.


Secondly, the asset account made up of a HUGE chunk of goodwill, intangible. The intangible assets inflated the whole account as much as 2 million dollars plus. The net assets was merely 260K in 2016 and 570K in 2015. Given that the company has raised 26M and a loss of 25 M till 31.06.16, this company has a serious problem of deploying its capital. The company has so little asset that I doubt any banks would loan them money.

My last point was the company itself. There was basically no boards. There were no transparency in the STI, LTI remuneration scheme. The employee stocks options seem to exercised anytime the employee wants without any restriction period. The only "profitable" period in 2013 was inflated by the sale of one of the subsidiary. They have accounted the disposal of the underlying debt from the subsidiary as part of the sales revenue. But you can clearly see that the company was still losing money in that particular FY through the cash flow statement and the footnotes.

The hype that the long view investors are building up based on the RACV investment arm with 1 M investment. This move really raised my eyebrows. Although its RACV, it is not exactly the car insurance arm. I dont understand why RACV would put money in CL8. I am sure they can start something on their own and better.


PEACE