“Doing nothing” is far from accurate. We know that a lot has been going on to address the Ohm sales. Digicel didn’t meet their target and so Buddy exercised their right to cancel digicel’s exclusivity. We know that the head of sales was down in the region speaking to other potential partners around the same time. He wasn’t down there on vacation, so I don’t see how you can say the company is doing “nothing”. Digicel didn’t make their target. Ok, that sucks, but has the company responded to that news? Yes. What more are you expecting? Buddy can’t force the resellers to make their targets, and they can’t shiv them in the cafeteria as punishment. The best they can do in this case is terminate the exclusivity and sign up more partners. I can only fault management for the things they can control. I can be disappointed in the resellers but I’m happy to see the company is responding accordingly.
As for a more broad response to Ohm sales, we were told that the LifX deal has been been in the works since September 2018. So this wasn’t thrown together at the last minute, and it looks like a complicated deal. Cash to the largest LifX shareholder, stock to everyone else, with funds via a placement (including Fidelity evidently) and debt. That all sounds very complicated and I image consumed a great deal of time. That’s hardly “doing nothing.”
Overall this LifX deal is a fantastic opportunity. Not only are we getting a fast growing company with a different product and revenue stream, we are also getting a fast tract for a residential Ohm product and service. The commercial Ohm sales have been disappointing, and I expect the company to continue to address that, but I’m also happy to see buddy hunt for other openings in the market. How many homes have LifX bulbs? How many of those would be willing to add another product and a monthly fee for a better insight into their energy usage? I think there’s some great possibilities here.
Put the disappointing 4c aside for a moment and look at what the company is doing about it, specifically with regards to the LifX deal. Bulb sales are on the rise (record January sales numbers) and they are projected to be cash flow positive this calendar year. 1.8 million bulbs sold. That’s a lot. In my home I have the Phillips Hue lights. I started off with just one thinking it was a rediculous extravagance but quickly got a total of 12 bulbs and light gizmos, plus remotes and motion sensors. It’s addictive once you start swapping out the normal lights. The lights themselves are pretty good, but the app kinda sucks. I’ve seen the LifX lights in action and I think they are a better bulb. Brighter and richer colors, plus the app is better. If I had to do it over again I’d go with LifX, and perhaps I’ll make the switch now.
All that rambling basically leads to the point I want to make that although the share price is disappointing, is the company’s future better or worse today than it was a month ago? With LifX now in the mix I think it’s a lot better. We know that Thor is doing well and there will be three months of payments in this Q as opposed to just one from the last Q. Commercial Ohm sales are being addressed, and LifX opens up a whole bunch of great possibilities (and includes a roadmap to cash flow positive this year). Buddy can bundle in bulbs with their Ohm packages, and the million or so LifX owners out there may be future Ohm (hOhm?) customers. And don’t forget about the data. Parse is on hold thanks to GDPR but that doesn’t apply to smart gizmos in a home. Maybe there is opportunity there as well?
Bottom line, all that is a far cry from doing nothing. Lots to be excited about here.
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