RE:RE:RE:RE:Started a PositionLots of companies succeed by being seria acquirers, take Constellation Software for example.
Now, int terms of going from $100MM per quarter to $1Bn per quarter... 10 years is a long time to get there and with a mixture of organic and inorganic growth, the company definitely can.
For organic, the company has several growth engines, the one I continue to highlight is Circle Medical, which is growing like crazy. Just check out all the positions they are trying to fill.
For inorganic, they can definitely pick up physical assets (clinics and diagnostics/testing labs) for much lower multiples than their current valuation (which itself is at a low multiple right now).
Share issuance at $3? That is absurd. The company has in the past, and continues to issue shares on an accretive basis in both directions: (1) issuing shares higher than market value (2) purchasing assets at accretive multiples
I agree with you, the free cash flow is another big plus of the company that it can use towards acquisitions.
But let's just cut the turkey sideways for a second. The company had $50MM cash, has $50MM free cash flow and still decided to raise $70MM via convertible... why do you think they raised that convertible cash? They are beefing up the balance sheet for acquistions, not the "tuck-in" $10MM here and $15MM there kind. They could do that without issuing the convertible. A good manager would never give away their tell. The managers of WELL have an acquisition in mind, and I am sure they are working diligently towards it. Only time will tell.
To my discredit, I don't look at profitablity much. Perhaps because it is a made up number that can be manipulated every which way using different accounting schemes. Rather, for a growing company, I look at revenue, EBITDA, free cash flows, job postings, growth in operating assets, growth in transaction volume (which in this case are patient visits). I am trying to figure out how to encompass synergies so if anyone has any suggestions, I'm all ears. I also look at balance sheet strength, where capital is being deployed and how the returns on that capital are. Profits, earnings will come in time, they don't need to come while we are growing like crazy. Perhaps when we are a stable company, 10 years from now, we can talk earnings per share and the like. Can you imagine, 10 more years without profit... isn't that the story of any growth company. Look at Amazon! Literally no profits until 5 or 6 years ago as the focus was on growth. Our focus should be on accretive growth.
Let Hamed and team show you how, as they have shown for the past 3 years. We are just in the first inning of a long game. I for one, am locked and loaded with tens of thousands of shares and, to the despise of certain critics, will be holding for decades. You gotta give these owner-managers time to run. Bezos got 25 years, Musk will probably get 20-30 years, Gates got 30 plus years, Jobs got around the same (albeit with a break in the middle), how much time are we giving Shabazi? Give this guy some time, let him work his magic. I'm not going to list all the ways he is a better businessman and investor than you and I, but we should accept that he is and let him get to work for himself and for us shareholders. With no salary and a large part of his wealth invested in WELL, he is perfectly aligned with shareholders.