Thanks very much for casting an eye. Sometimes nice to take a...

Thanks very much for casting an eye. Sometimes nice to take a cold bath with these pie in the sky stocks.

My basic way of thinking is the ‘it’ is the change to digital. Similar to phones going digital. Currently the majority of audio speakers are connected by wires carrying audio signal. Dante converts the signal to a digital file and then transfers the data packet to the speaker via Ethernet cable. Imagine you were at a school setting up speakers in the assembly hall. Chances are there will be low cost Ethernet cables all over the building for internet connections including at the hub. So either you need to also put in extra wiring to all the speakers or you piggy back onto the Ethernet cabling and plugs. You only need 1 Ethernet cable to get from a to b to c, but if you have copper wiring you need 2 wires, one wire for a to b and one from a to c.
I think eventually the audio files will be transferred wirelessly but this obviously will go via the digital route.
Ad8 has been adopted by most of the big brands yahama Bose etc and I can’t imagine those brands when making their hardware will eventually want to carry multiple versions of digital channeling. It will be a winner takes all usb type adoption and Dante is flying away with it.

So when we get to valuation. The preso says the audio tam is 456mil by 2021. Now if ad8 gets most of that (say400mil) at gp margin of 75%. They make 300mil. Opex is hard to guess but should be reasonably stable with network effects providing the s&m, but let’s say 75 mil.
So that leaves pbt of 225mil.

This is just for commercial audio. ‘Imagine’ (sorry I hate to imagine when investing but sometimes we have to make an exception) if your bose speakers around the house start to use Dante. Then there’s the video component which again is just a bonus but again the signal is carried across the same audio Ethernet/wireless cables rather than extra dedicated video cables. We start to get into fanciful numbers which is counterproductive.

Any big holes in my naive thinking from you or anyone else? It’s a v small position for me due to execution risk etc, but if they keep executing I hope to add more.

Once again appreciate the review.

Ps I was extremely impressed with vee. Didn’t take me more than an hour or so of review to be really impressed and I started buying some this afternoon. When I get a minute I’ll tag you in a post over there