Ann: Capital Structure, page-31

Fair call, though if they said $40m rather than $4m I’d understand. It all just seems way too low to deliver anything of worthwhile scale and of Tier III or IV standard, not to mention hooking up power to DC’s costs a bomb (that’s the upfront connections, I appreciate the ongoing power is passed through).
Moreover, let’s just say they can generate an incredible ROIC of 25% on these modules right - that’s EBIT of $1m or so. You’d need dozens (eventually hundreds) of these to generate meaningful earnings to generate any return to shareholders. So even at $4m you’d eventually be spending tens/hundreds of millions down the track to scale this biz, which brings back the dilution ogre.
Ultimately whether it’s micro or macro scale, a DC biz can’t escape the reality that they will be competing against others on a ROIC which sets a cap on customer pricing.
Scale is everything, modular is not enough, imo