Mailhot is no savior - same team - same riddleGive me a break, this is not a savior. Actually, this is same guy that has been running the company for four years as COO in the shadows of Claude and a major part of the value destroying team. The same team that now is showing a decline in year over year sales while generating no free cash flow.
They say, he used to be VP of strategic alliances. What did he deliver? I probably missed a few press releases because based on public information he delivered zip, nada, f..all.
The fact is that D-BOX seems to have underinvested in technology for years to protect their limited cash. They could not convince new institutional investors to come on board because they were too arrogant and had no true vision to sell. Unfortunately, D-BOX has proven itself as a classical case of over promise and under deliver. My read is that the strategy is probably simply to protect cash just to be able to pay a bunch of loyal but grossly overpaid executives while praying for a takeout that would spread everyone’s parachute.
To make things worse, the Board is not calling a strategic review. After paying close to two million to Claude for his retirement, the company will have in the range of $5 million of cash left. Basic finance teaches us that to be able to achieve profitable growth as Mr. Mailhot stated in the latest press release, you need capital. When you generate no free cash flow, cannot raise any additional debt and that institutions will not provide you with any equity, you are in trouble. Any qualified CFA could actually calculate for Mr. Mailhot D-Box’s maximum sustainable growth rate. I doubt it is even in the single digits. To grow, D-BOX will have to raise equity and prove to investors that they are shrewd capital allocators. Without any strategy, it will take much more than new products as Chris Li has recently pointed … Maybe after more than 15 years, they will finally get a gamer product out? Talk about missing the boat … Hope for a takeout.