I expected SFG to bring a lot more to the table , but in hind sight the merger should have been 50/50 instead of 30% MWS/70% SFG.
To my mind MWS had better "tools"/platforms/IP , but it lacked the scale....I thought SFG is big enough....this proved wrong.
MWS used to generate >1m in revenues/quarter.....One would expect 3x revenues ( this is minimum without factoring in cross sales) with the addition of SFG (which is supposed according to the merger deal to be twice as big)....But revenues have only doubled.
I expected SFG to have a bit of cash , but as a matter of fact it had next to nothing.
Borrowing of $0.865m during the quarter.....Debt stands at $1.113m.
Staff costs have doubled....Need to cut a lot of dead wood.
I reckon MWS holders have been screwed by an unfair merger deal....Should have been 50/50.
We wait a couple of quarters to see the effect of cost cutting & synergies....also the acquisition of SWG (of which SFG is a share holder....let's hope it is a fair one to MWS....Do we have a say?)
In short....MWS is not dirt cheap at 0.002 or $8m MC....Perhaps just fair value & highly unlikely to drop to 0.001.....But it is quite expensive at 0.003 or $12m MC.
Share consolidation should happen soon....$4bn shares is an obscene figure (with more to come).....It makes it highly illiquid....Why should anyone pay 50% premium for one "pip" , specially when an SFG founder is selling at 0.002.
SEQ Price at posting:
0.2¢ Sentiment: None Disclosure: Held
