RE:I'll just leave this hereThis seems to be nothing more than typical politicians playing politics. What is not being discussed is that no other feasible bidder came through for this contract (which is why THNK was alone in the competition and why the deal was so easily won).
The real story about this news is that we learned exactly how large the contract with THNK is (roughly $50M) and that THNK has to date only realized about $4.3M of it for the 9 months it was effective in 2023. The math suggests that there is $10.7M in high margin annual revenue for the next 4 years and I suspect a very high likelihood of extending the contract. I don't think anyone, including the analysts, priced this into their models BUT Beedie is no doubt very well aware of the NS contract details. It essentially works out to about $6.4M in incremental revenue for 2024 to 2028 and likely at 65% margins meaning $4.2M in incremental cash flows vs. 2023.
THNK provided some colour on updated financials a couple of press releases ago. 2023 revenue came in at $80M to $83M and Adj. EBITDA of -$1.4M to $0.3M. Simply adding what we learned about the NS contract for 2024 means that with no other growth THNK is on track for revenue of between $86.4M and $89.4M and Adj. EBITDA is expected to be $2.6M to $4.4M. If any of SA's pipeline talk is actually truthful then its safe to easily assume another $5M to $10M in SaaS revenue for 2024, which would be about an incremental $3.3M to $6.5M in Adjusted EBITDA. That brings the 2024 pro forma number to a revenue range of $91.4M to $99.4M and total Adj. EBITDA to $5.6M to $10.9M. If EBITDA fell in the middle of that range than even with the company's current debt levels they would be cash flow positive.
Conclusion: IF (and this is a big IF) there is any truth to SA's pipeline comments then no wonder Beedie and the THNK management team (who are retaining shares) are excited to take THNK private at a rock-bottom price of 0.32. These numbers plus the quality of THNK's SaaS business should in theory easily entice another buyer to come to the table with a significantly higher offer. But, that hasn't happened (at least not yet and quite possibly never), so the only conclusion I can draw is that either i) management has colluded with Beedie to literally partake in highway robbery of the company from current shareholders (and disincentivize other bids from coming to the table); OR ii) SA has been knowingly misleading investors about the future pipeline of the business. Take your pick but either of these scenarios is not in the interests of shareholders.
Regardless, until we see an update on the Go Shop and the status of any negotiations there remains the possibility that another bid or at least a sweetened offer from Beedie will come to the table. The stock is trading at 0.31 cents giving investors a bit of upside (this is a good “worst case” scenario for investors holding until the acquisition is completed) while simultaneously allowing investors to maintain a free call option in the event of a higher bid. That's a decent risk/reward scenario and why I continue to hold the stock (I haven't sold any shares).