Trumps tariffs are avoidable All they need to do is manufacture...

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Send2deking

902 Posts.

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09/02/19

12:10

Post #: 37384935
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Originally posted by retiredyoung ↑

Originally posted by 1ronnie
If you have another round of share issue to be made around the date of the general meeting to approve the deal, you would expect vested interests to try to maintain the sp around the 8-9c mark. The real test comes post-completion of the exercise when the share base is enlarged to ~ 1.8b shares.

My personal assessment is that far from seeing LIFX acquisition as a 'get out of jail card' for BUD, it is perhaps more a 'get out of jail card' for DM as he cannot deliver the Ohm business as promise. Now LIFX fills in the shoe, but as I indicated in my earlier post, unless LIFX can deliver $12m NPAT in the coming FY , the post-completion MC of $160m won't likely hold. The future assessment IMO would be earnings base not revenues. The Price/Sales applies to tech stocks with no immediate earnings, otherwise companies like Beacon would justifiably be priced higher than what it is.

Any short term upside in the sp in the interim period leading to the approval of the deal, represents IMO a good opportunity to lighten up exposure.
I do not think that comparing a high growth business like Lifx to Beacon (more than 50 years old) is a good comparison. Trumps tariff's will make it difficult but revenue of $70m in CY19 and Lifx could be profitable.

In my opinion the biggest problem for Buddy is the expenditure on the Ohm side of the business. They cannot afford to keep burning more than $3m per quarter. So far Ohm has only generated modest revenue so what is the point of the high expenditure ? It is time to right size the business.

Beacon is a retailer of Lifx products so I hope they do well.

Beacon is the home of Smart Lighting:
https://www.beaconlighting.com.au/smart-lighting

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Trumps tariffs are avoidable
All they need to do is manufacture in the states and then get countless tax incentives

It’s not rocket science is it?!?!

Last edited by Send2deking: 09/02/19

BUD Price at posting: 9.0¢ Sentiment: Hold Disclosure: Held
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0 Great analysis

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Trumps tariffs are avoidable All they need to do is manufacture...

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