Tiresias; On Valuation

My friends,

Last week, Tiresias waxed lyrical, and perhaps at excessive length, on another field application of CLE(confocal laser endomicroscopy); immunopathology, in vivo and ex vivo. This week he thought he would be a little more concise and just touch briefly on the subject dear to his heart. You see, Tiresias is Patriot. He wishes for Optiscan to remain in Australia. He wants it to be that rare Australian medical technology company to make it onto the world stage. Some shareholders seem to be excited that the price has risen a bit. Some might even be thinking that the current price is something to celebrate and to sell into. This would be a shame. The current price is trivial. This is revolutionary technology which will transform cancer surgery and cancer treatment. How much is that worth? Certainly a lot more than its capitalised at now. Some people keep bringing up sales. This is not an industrial company, and not yet at the stage where it is to be priced by sales revenue. At this price, Tiresias thinks that an overseas predator, with a lazy few hundred million dollars to throw about, will seize a once in a lifetime bargain, and take Optiscan overseas. Some short-sighted shareholders will rush at the offer. Tiresias thinks this would be a real shame. Just recall, it’s almost 40 years since bill Gates struck the bargain of the millennium and bought QDOS(Quick and Dirty Operating System) from a Seattle soft company, Seattle Computer Systems, for $50,000 dollars. This became Microsoft DOS. SCS rushed to make the sale too! Who has heard of SCS. Unless Optiscan price is a lot higher, Optiscan shareholders might well feel like the SCS partners have felt like for the last forty years. Unless the capitalisation is much higher, Optiscan may well join the pantheon of Australian medical technology companies such as Cochlear, ResMed , CSL and even its former stablemate, Polynovo, but not as Optiscn and not as an Australian company. You see, my friends, Australian technology companies are at a great disadvantage. There is no venture capital market in Australia. What venture capital exists goes into mining, and money gained in mining and quarrying steers away from technology companies. Optiscan, and such companies list on the ASX far too early, at great cost of capital, and at greater cost of compliance to ever more suffocating ASX rules. When there are inevitable delays, the public market becomes too disenchanted to quickle and reacts irrationally, and the results are self-defeating and inevitable.

Australian market and shareholders have a lot to learn in this sector. Tiresias knows humanity but is still hopeful.