Important to remember the ASX has seen no tech success stories. So no one knows how to value this company.
The traditional metrics of valuing ASX200's do not work here - and this is the only way GSW has been valued in any article I have seen... I even saw it valued based on Cash receipts per month by the AFR initially. Talk about misleading.
The dinosaurs smearing this company made all their money during the mining boom - raping the West and selling it to the Chinese when their economy was booming at 10% and they were busy harvesting the organs of a sovereign nation.
One way to value an app would be to look at the number of times GSW was downloaded across Asia, Europe (particularly UK where it is booming), Australia and North America over the last 3 months (AppAnnie). Writing a review of an app, the first place I would go would be to how many times it's been downloaded... not to ask some brave Funds Manager who happens to be walking past that wishes to remain anonymous.
The SME business (downloads) is not GSW's core sales strategy (representing 25% of total revenue per IPO projections for 17/18FY). It's the Enterprise agreements that will count - specifically NA's customer base, increasing food delivery market (Yum, Toast), Amazon (whatever's going on over there), whoever else is in the pipeline...
Importantly, GSW has no debt. Meaning it has no debt to service.
That is a CFO's (and investors) DREAM. Expenses will rise as implementations advance, but they will be expenses related directly to COGS and Salaries - not interest charges, not costs of paying down their debt, no minimum monthly requirements to service Liabilities. Their Current and Non-Current Liabilities = 0. They have over 100 million dollars cash in bank and a functional, scalable, disruptive product in a stale market.
All expenses incurred will relate DIRECTLY to future revenue and business growth
GSW is some salesmen (potentially Disallowed based) and a good technology that transforms a "non-value adding" last mile into a genuine competitive advantage for its customers.
By way of example at the importance of effective last mile in today's marketplace, look at what Amazon did to the US consumer market with the business model of fast, reliable, trackable delivery of consumer goods... and FLEX isn't even as good as Swifty based on user feedback (FLEX has a 2.4 star rating on Google Play).
IMO this stock is going to the moon. Whether it hits the bottom of the ocean first remains to the be seen, but I for one will not be bullied into selling on this dip. The scare tactics used by these hacks to destroy the SP, the reputation of GSW and its founders do not work on this investor.
People wandering aimlessly into this forum based on an opinion piece need to keep eating donuts, as does the AFR and Fund Managers after this episode.
Good luck to all shorters... You will need it.
Get Schwifty
GSW Price at posting:
$2.92 Sentiment: Buy Disclosure: Held
