GREY:XEBEQ - Post by User
Comment by
GGreenon Aug 16, 2021 11:24pm
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Post# 33715209
RE:Takeout target
RE:Takeout target Many issues perhaps, but more importantly a couple of big issues that they better get right soon otherwise I agree they will get taken over and not for the mgmt team but the technology they've acquired in the last 9 months. I'll take the time to digest and post a Q2 update to my Q1 scorecard.
As a preview: top misses (IMO)....
- mgmt and execution again, I previously suggested that EXECUTION, EXECUTION, EXECUTION was going to be key post so many acquisitions. They're failure in Q4 put them in the penalty box (we're still sitting on a bag of shares and looking up at the clock to see how much time is left). CEO "a 12 unit order almost choked us" WHAT! Couldn't believe he said that. COO "we didn't have include a service agreement when we sold the 16 unit order but we're starting to standardize that now" or something to that effect. WHAT!
- failed strategy on:
..... keeping SG&A as a % of revenue in check, metric was just awful in Q2 and various references to new headcount, new office leases etc good luck with that one going fed and getting to EBITDA +ve
..... service co acquisitions - strip out revenue from Hygear and Inmatec and you have Hugh disappointment on organic growth. They better revisit there goal to buy 20+(?) service cos over 5 yrs
... BOO strategy - zonk on this one, nothing delivered to-date and not much hope that anything will materialize. They basically threw FTQ / Q1 market under the bus "ROI on Qc projects challenging" paraphrased. GRN walked away from Swen financing for I think similar projects and now "looking at options to redeploy the capital they (Swen) raised" again paraphrasing - move on from this one
... China - in response to the update question that I asked... after what was supposed to be so promising this is now quietly and unceremoniously "no longer being consolidated as of June 30/21 because of restructuring" HOW CONVENIENT? I never expected much from this given my personal experience with Chinese business partners (search 36 stratagems)
Aside: no more update on the sales pipeline? Another convenient time to stop tracking this metric because GAAS won't get included.
There are some +ves (not many)... I think they have 6-9 mos. to get their act together (and run out of cash) before heads start to roll or they start entertaining takeout offers if Hygear and Inmatec continue to deliver.