BRN (ASX) Why I have not sold all my shares and added more

Originally posted by patientvalue ↑

Why purchases of brainchip product may take longer than expected...

1) being first and/or best is no guarantee of success - the classic biz case of betamax vs VHS is enough to forewarn us all. This is not the only even the main criteria when buying a business to business product. What if, for example, samsung is looking to develop their own AI chip in-house? They may have an NDA with brainchip to see where their chip comes up short and get ideas of what they need to do (without copying - eg reverse engineer). so not all NDAs should be assumed to be genuine but rather a part of normal business intelligence. Continuing with the Samsung example, they may find that after some efforts they cannot match Akida. but even then they may prefer a proprietary chip that they can integrate more quickly (or easily) with their existing chips or software.

2) The sales process for business to business is typically long and complex. The complexity of the assessment of the chip is unknown including for example how to integrate it with other components as well as software changes. These 'challenges' maybe a lot more time consuming than we can imagine.

3) Right now there is a major supply challenge for chips. I would not dismiss this factor with companies too quickly. If a buyer asks for a guarantee of 10 milllion chips every 12 months. can brainchip deliver? this supply issue is a potential sales hurdle. While socionext is a partner how much can they do on this front? they still have to stand in line at TSMC. If intel get there act together (or IBM?) and offer a chip that can do the same as akida (or maybe a bit less) but is able to guarantee supply of said chips, this would be an important factor in a purchase of AI chips by a potential buyer.

4) what if for national security reasons the USA govt tells NASA it must go with an American co if the govt decides it it to become part of the new Space Force (miltary)? What if NASA is going to outsource even more of its space activities to Space X et el and in talks with them they discover tesla is already working on its own AI chip (i understand they make/design their own chips entirely at tesla).

5) I think the way to understand Renesas purchase of the IP is to see it as an option. It is my (possibly mistaken) belief they have (for a relatively small price from their perspective) blocked the ability of other companies in their competitive space from accessing akida. We may think $1M is a lot of money (probably brainchip does too - it is cash flow poor at present - not a criticism just a statement of fact) but it is not.

I like the brainchip tech and the management. the open nature of communication around the sale of Peter's shares was impressive. We need to remember that it is his personal property and if he is denied the right to sell some then what is the point... just for the love of it??? He has family commitments and promises to fulfill too...maybe you do not.

Please understand that for now ... Brainchip is a story stock - without news it will tend to drop if the market is falling or if there is an absence of news/announcements. I think it has a great story but it is just a story until there are actual purchases. And this is liable to take some time to happen and is entirely in the hands of other businesses.

We need to get past the excitement of the potential and look at the business case. That is what potential buyers are doing.

I would be surprised if there was a purchase agreement this year. I do not think a new CEO can change that time line. It is not within his/her power. To be transparent, I hope it will go down further on the lack of news of any sales. And it is with this assessment that i am delaying purchasing stock.

On a personal note: I am not presently a holder as i can only buy through my super (i wish they allowed purchases of All Ords stocks rather than limit it to asx300 companies). I am presently delaying my intended purchases due to a) hopes more fear creeps in - yes i wish to profit from the fear of others or a general market decline and b) there is an opportunity cost - i could buy something else but i also fear missing out on this opportunity.

cheers

PS - I am quite ignorant about Brainchip (I am sure it shows). So 'grain of salt' and all that. These musing are more of a general business nature. They may be helpful or not.

Expand

On a personal note: I am not presently a holder as i can only buy through my super (i wish they allowed purchases of All Ords stocks rather than limit it to asx300 companies).

BRN is in the ASX300 so you can buy if you really want to ?

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0.210	1198206	19
0.215	422560	18
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(20min delay)
Last 20.0¢		Change 0.000(0.00%)		Mkt cap ! $371.1M

Open	High	Low	Value	Volume
19.5¢	20.5¢	19.5¢	$656.1K	3.281M

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