@japanfresh Love your posts keep them coming.I am increasingly...

@japanfresh Love your posts keep them coming.

I am increasingly bullish about this product, it has been significantly derisked in the last 3 months with the capital raising and the last quarterly. I have accumulated a 3% position (which is large for me for a microcap).

All the indicators that I am looking at are also pointing upwards, and I can see how the product is sticky when you do actually use it. Whilst it takes a bit of work to get it set up at the start, you have instantaneous roaming when used overseas, which is definitely useful for the frequent traveller. I had previously not had the need for it, having a European sim card and travelling mostly in Europe, but have recently used it in the States and it is definitely MUCH more convenient than buying a local sim card, although it is definitely more expensive. It is also clearly cheaper than using a local roaming plan.

My main concerns have been around figuring out the gross margins given all the promotional activity they constantly have and all the free data which is a deferred liability (and certainly was on the balance sheet at last reporting!).  The gestalt I have for the situation is that they have now achieved product market fit and that the growth they are achieving now is more sustainable.

The EBITDA margins for niche MVNOs are in the order of 10-15% and if we can exit the FY at 10m of revenue (a bit of a stretch target) I think we can command a market cap in the order of 45m or ~20c. Given the prepayments model, the negative working capital is a massive boon for the company and will provide a steady stream of cash to invest once breakeven is achieved.

I am with you that the next quarter is likely to be a big one.