People. Its been a while. Its so good to be back on planet 1page. And I see the drama continues. A few points.
1. We were right. We usually are (about 60% of the time). We knew we would be epically right about this one. Epic it has been
2. All to be gained now is learning. The learning here is what happened happened because the thing just didn't work. The data base. The triallsts. The acquisitons. The "bookings". The etc etc. It didn't work.
3. And now to the future. Take the money. Do something else. Move on.
For those mystified we have only ever posted on one stock. Here's the summary when it was $3.45.
Laters!!
>>>>
Hey there my people!
So so many posts quoting me, so little time to read them (or correct their spelling). I'm thinking of incorporating some kind of cult with all this following. Its so nice to know so many of you take my words to heart. Its quite touching.
Now - back to the roller coaster that is 1pg. The question you have to ask is how this business just created $200m+ of value in 7 days and is it sustainable or predictable.
First - let me be ultra clear with our investment thesis. This has been the consistent view since day 1:
1 - The 1PG product doesnt work (disclaimer, caveat, our view, doesnt always wash whiter etc etc). Sorry people. We cant find any place its getting traction. If you think it does and have evidence post this.
2 - The 1PG revenue run rate will not get anywhere close to justifying the valuation. 10 mins with a spreadsheet and you can work this out. Many of you have pointed this out, but consider running a revenue ruler an "obsession".
3 - So the fundamentals aint there. And the great great risk is a bailing out of (approx) 22% of stock that comes out of escrow around October. We think this is a real risk. Let me spell this out - this stock is now worth almost $100m of cold hard folding cash money. WWYD?
However...
4 - This is not a fundamentals led investment. Its a momentum trade. And we all know the market can be irrational long after a contrarian is insolvent. Yes, we get it.
5 - And the indexation of 1pg in to the ASX300 around 15 Sept now looks high probability. This is a long bias.
6 - And institutions are on the register, some possibly synching for this. Again this is a long bias
But that said...
7 - The probability of a stock of this size with no new news adding 50%+ to marcap in 7 days is similar to the probability of being knocked over crossing a road by a car driven by a shark clutching a winning lottery ticket. So not saying impossible. Am saying improbable
8 - And the cost of this (for example today $9m shares traded hands to add $80m of marcap) is highly asymmetric and this always raises many issues that have we are sure simple answers
9 - Which means we think will be a short time long and then a long time short
10 - And we've all seen how that movie ends.
Heres to another thrilling week of 1PG...
Laters!
1PG Price at posting:
16.5¢ Sentiment: None Disclosure: Not Held
