It is a nice product add in . I would not say it changes the company or the business model. They own the front door (providing a cloud based intranet portal to a list of large enterprises and blue chip customers) so they will be doing JV and license deals like this for add on products. LVT becomes a very attractive partner for smaller companies and start ups that have developed an interesting piece of enterprise software that makes the workplace better and more intelligent.
I think there are 2 observations we should be careful not to miss:
1. They did not buy TestFire, instead they did a license/JV. I'm reading from that, they are deadly serious about managing cash burn and careful capital allocation.
2. The share price moved through the 45 cent resistance level like a knife through butter and absorbed all of the overhang at that level.The overhang dates from the 45 cent stock placing in Feb 2018. The placings at 34 cents and 45 cents are now solidly in profit and any weak holders cleared out. There is not going to be much stock available between here and 59 cents.
We stick with our 85-1.25 price target range dependent on seeing whether cash burn has continued to decrease and ARR increase.
LVT Price at posting:
50.5¢ Sentiment: Buy Disclosure: Held
