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I like the calm
Sets up well for when we get the positive results from the vote.
Two acquisitions in the pipeline
Considering there's two deals in the pipeline that will add enormous value, the share increase is rather minimal.
I would say it's up to shareholders
We control the destiny. Pass the quorum and preferably the 50% threshold and the judge won't stop the merger. Just vote your shares in the affirmative and Ben Berry will guide this over the finish line.
This is what gives me even more confidence (from the proxy):
At this Special Meeting, one (1) seats comprising the entire membership of the Board of Directors, are to be elected. The elected directors will serve until the Company's next annual meeting of stockholders and until a successor is elected and qualified. Robert Stephenson is the nominee.
Robert Stephenson. About the candidate: Robert founded The Data Source (UK) after working in Marketing for a hedge fund. With a strong resolve and a calm rationale you’ll find him organizing the chaos in the day to day running. Robert has extensive knowledge and contacts within the marketing & data industry and will use this to develop new and current partnerships for the company with some of the major players in the market. Robert has built his business from bottom to top in a matter of 5 years and will bring the same drive and knowledge to the board.
All nominee(s) have consented to serve if elected
I added the boldface for emphasis.
Couple of points
1. That email, presumably, went to educated traders that are strongly motivated to see the deal go though. If anything, it should give shareholders (current and prospective) greater confidence that the deal is going though and soon. I suppose we will find out soon, but I will ready to capitalize on any short-term weakness if necessary.
2. The amended articles of incorporation are in the proxy, Annex C (starts on page 10)
I agree
Just wanted to show additional confirmation that we're really close to getting this done and taking a leap forward. Hope we hit the 50% threshold (and surpass it), but the quorum should be easily surpassed.
TDS liked the following tweet
Certainly seems like they're anxious to get this done and move forward.
"CLHI shareholders are filling out their proxies and returning them as we speak. Should hit the 50% threshold, but certainly reach a quorum. Looking forward to being a shareholder of TDS soon!"
Signed and returned my proxy
Own a significant chunk of stock that should get us well on our way to the 50% target, though Ben said a quorum is less.
Looking forward to getting this over with and moving forward as a shareholder of TDS.
There's a core group...
Of folks that are constantly reminding management at TDS to communicate and obviously get this deal done. That said, it's become apparent that the delays weren't entirely TDS' fault.
The remaining steps seem relatively trivial to me. I'd be more concerned if there were a financing issue or something of that sort, but that is not the case here.
Once Synergy takes care of confirming shareholder acceptance of the transaction, dominoes will fall in rapid succession in my view.
Valuations in the sector have risen dramatically. The current market cap of ~$5mm is really a joke in relation to the private market value and the ultimate public market value. This also ignores the two acquisitions that were highlighted by management a few weeks ago.
What was it concerning?
The shareholder list? Next steps? Anything that hasn't already been discussed on this board?
Agreed, but it's just a formality
Judge seems to want to make sure all loose ends are tied so to speak. Get it on record that shareholders approved the deal.
TDS liked a tweet about the Synergy process
Seems like they're as anxious as shareholders in CLHI. Mr. Berry needs to get this done in the envisioned time frame.
Stock as currency
Management presumably wants to use stock to do deals like the ones we know about and others in their pipeline. They also NEED a strong stock price to effect these deals and appease the private investors.
Minor stumbling block that Mr. Berry is resolving. Good to go in a matter of days or perhaps a couple of weeks from what I can tell.
From Mr. Berry at Synergy
Sparing him the need to answer additional questions on timing and process:
"Will have a proxy and ballot out to everyone by tomorrow to approve. Need to send out a 10 days notice per Delaware rules"
Hopefully the judge rules that a vote isn't required
Should be a formality given shareholder support indicated to Mr. Berry already, but it seems unnecessary both in terms of cost and time. That said, if this is the only remaining roadblock, which seems to be the case, then we're in great shape.
Just some procedural steps to complete
I too had an email exchange with Mr. Berry. He echoed many of the statements expressed to others.
Email attestations of share ownership should suffice IMO, but I'm not a legal expert in this area. The prior entity was dissolved, so not sure why we even have to do this, but I guess a more difficult judge was assigned to this case and prior shareholders raised a fuss.
Thanks for sharing
I contacted Mr. Berry as well. I thought this pertained to the old company (ie. prior to dissolution), but perhaps I'm mistaken.
Mixed bag quarter
QCA had a very good quarter, as telegraphed by the various tweets. APF seems to be in run off mode pending re-purposing of the assets for QCA and perhaps Excel.
The construction businesses, in aggregate, were fine on the top-line particularly given the impact of Covid. Excel was very weak q/q and the gross margins for the entire construction group were underwhelming (to be kind).
Assuming the company does about $35mm in revenue in 2020, the stock implies a current valuation of ~1.3x EV/2020 sales. Hard to argue it's a screaming buy until we see more evidence of gross margin expansion and better execution on fixed cost leverage IMO. Some big contract announcements for the construction businesses would help a lot too given we haven't heard of any since the Spring.
I don't see a lot of downside, but not a lot of upside until the company drives substantial margin improvement.
Watching and waiting for me. GLTA.
High turnover of senior execs goes further back
Extends further back then your list. Company went through two CFOs in its first year. Anshu also hired Nandini, a former exec at Walmart, to spearhead the GCC consumer foods business. She left without a peep. Just a PR to pump the stock when she was hired.
It is really sad what transpired here. Mostly self-inflicted wounds. Anshu is primarily the culprit. He calls all the shots. Cutchens hasn't helped, but the blame lays squarely with Anshu.
I'm left wondering how desperate Eliot's Nut Butter must have been to sell to Anshu (even though it was a paltry valuation based primarily on an earnout)?
I've pointed this out repeatedly, but why do TWO directors own ZERO stock? Certainly a smart decision on their part, but a red flag that has not been addressed to this point.
It will be interesting to see how the stock trades post RS and Anshu's determination of the "appropriate" AS.
Got some news at least
Seems like it could be a big project. Once the audited financials drop and we get more clarity on Wattozz, this stock should increase 10-20x at least.
Major holder- still here
IMO, there hasn't been much to comment on. We're all in a holding pattern (been that way for several weeks unfortunately).
I do think their last tweet was unnecessary and the explanation lacked merit. I'm glad they took it down.
Fair enough
I'm hoping the Statue of Liberty is a tacit attempt to convey arrival in New York and the stock listing. I'm probably reading too much into it, but we mostly had cryptic messages to decipher to this point.
What do you think this post means?
I've given up trying to decipher the meanings of posts like this.
I hope you're right
Like I said, there are a lot variables that remain to be revealed, but I'm comfortable with my analysis at this point. As they say, valuation is more art than science, particularly when it comes to high-growth, early-stage companies.
We're all in agreement that the company is in a sweet spot when it comes to end markets and the valuation multiples applied to those types of companies.
Agree HH
I'm all for bullish price predictions, but some grounding in reality is better for all concerned. As a baseline, I'm assuming CLHI investors get 10% of the company, but am prepared for a lower % particularly given the two recent deals. It's fair to say that part of the private funding round (we still don't know how much they raised and at what valuation) was used to purchase the B2B database. I would imagine they use stock to do the second deal that could add up to $80mm in revenue (presumably on a run-rate basis) by the end of the first year. Applying a 10x revenue multiple on that revenue and it's $800mm in value alone.
Given the recent deals and the existing technology (B2B database, data management, AI etc.), it's certainly possible that the valuation could reach well north of $1bn (or perhaps a lot higher given comparable valuations). In such a scenario, the stock could reach $5-$10 (or more), but there are lot of variables yet to be revealed.
I would keep in mind that whatever the share issuance to other parties ends up being, the float will be very small. Consequently, the share price could extend well beyond "fair value" for an extended period.
Looked like controlled accumulation to me
Huge offer at ~$0.22 was taken out with relative ease. Good sign.
Could easily PR the path forward
Numerous examples of other companies in similar situations that have PRd their path forward and the current status of their listing. They've danced around the issue with numerous tweets and social media postings. I fail to see why it's fine to do that instead of a transparent PR that is broadly disseminated.
That's what it means.
Would be nice
If it's not another tease. Management needs to deliver now.
Need PRs, not Instagram stories
LOL. Not shooting the messenger, just stating the obvious frustration with the management team.
Sure, nothing is impossible
I think 2020 has proven the old adage "expect the unexpected". That said, this stock has 5 BILLION shares outstanding at this point. When I first bought, there were 240 MILLION shares outstanding. My first purchase occurred the day after Anshu's first earnings call. I'm not ashamed to admit that as I averaged down and got out at very profitable prices. Anshu also said in calls back in 2017 that he would never allow VCD to convert. We all know how that turned out.
Not to stroll down painful memory lane, but giving this management team the benefit of the doubt has proven hazardous. If you've held this long, it might make sense to ride it out for various reasons (hope, tax loss etc.). If you're a prospective buyer or trader, perhaps you get a bounce. For this stock to create real wealth, management needs to get a clue about value creation and demonstrate an understanding of cost of capital.
Fair enough-
I would say the devil is in the details, but the bear case has been discussed repeatedly. I will grant you that.
My question to bulls is, why should anyone buy before the RS? Valuation hasn't mattered because of the tsunami of share issuance. There's been repeated bullish PRs and statements from management and they haven't mattered (other than fleeting upward moves that get sold off presumably by WL and other trapped longs).
Verus won't release firm numbers until February (assuming Cutchens can get his act together and the audit goes off without a hitch). Long time to wait, particularly for myopic OTC traders.
Stephenson-
He needs to deliver on the actions he intimated in your exchange. The comps are heading higher, but we're not going to fully capitalize until he provides substantive communication.
I'm as optimistic as ever, but we need more out of the company. Hope we get it soon.
Didn't reduce the uncertainty much at all
Unfortunately, they didn't provide any specifics as far as AS reduction. In fact, they indicated additional shares will be required for a variety of different needs. Now, you might think that's a good thing if you believe in the growth story, but most won't.
Anshu hasn't demonstrated an understanding of cost of capital and certainly not the ability to grow and create shareholder value simultaneously. I thought Cutchens would add some discipline, but he's been a disaster as CFO to this point.
Anshu can't rebuild his shattered credibility with a PR and some empty words. Needs to do that through actions over an extended period.
The other problem now is that it takes huge volume to move the stock price given the overhead resistance from OTC traders that are down on the stock.
Thanks for sharing
Sounds like we should hear something this week, if not sooner. Keeping my fingers crossed.
TDS liked the following tweet
FWIW, which hopefully means some progress this week?
Quakers07
@quakers07
Replying to
@thedatasourceuk
Hope we see some tangible evidence of progress this week. Losing a week and not taking steps forward is really unacceptable, particularly given the delays already experienced. At the very least, PR like many others have and explain the status and path forward.
I would add
The company (TDS) has already acknowledged that CLHI is the ticker and vehicle for their stock listing in numerous instances. Moreover, some parts of the OTC company profile page for CLHI have already been updated. For example, the Chief Compliance officer has a full bio. More importantly, Robert Stephenson, TDS' CEO, is listed as a board member of CLHI and has been for some time.
We can only speculate as to why it's taken so long to get everything updated. Being a foreign company, there's certainly additional steps. The company was also engaged in a capital raise and we recently found out about two major acquisitions, one of which has been completed and the other is in negotiation. That said, the company has intimated that the delays are due to other parties.
The company has to improve in terms of its IR, but in fairness, it's a new listing. There will be growing pains, but they will be overcome.
The current ~$4mm market cap is a joke relative to the massive opportunity and undervaluation relative to the sector that is populated with companies trading well north of $15bn in most cases.
I don't think it's anything close to that in terms of short interest
Finra says 39k shares as of end of September. I would like to see confirmation from Finra.
More fuel to the eventual explosion if it happens to be true.
Valuation
This one is tricky because revenue growth has taken a hit from Covid, but the margins have held up remarkably well. Gross margins have held above 50% this year despite revenues dropping and the net margins are almost 40% (thanks to cost cuts, but even last year they were close to that level).
Assuming Q3 shows nice sequential revenue growth, I could see a PE multiple of 20-30x forward numbers. If they can get back to 2019 levels, that's an $11 stock at the mid-point multiple. If they can get the markets excited about some new business wins and perhaps product line expansion, it could go considerably higher, particularly with the very small float of ~700k shares.
Expounding upon your theory
Could also reflect a desire to turn over the shareholder base into stronger hands for the eventual re-rating to much higher levels. Gave UK funds that know the company perhaps a lot better than ones in the US (and elsewhere) a chance to accumulate. UK funds are also accustomed to buying penny stocks as many of their shares, even ones that trade on the FTSE, trade in "pence" or fractions of a pound sterling.
Lots of narratives can be conjured up, but we won't know until it's clear in hindsight. I'm sticking with the less than competent social media manager explanation until proven otherwise.
Agree, but company messaging needs to improve
I would suggest that the stock went up because of the B2B database acquisition and the indication of another significant deal in the works (could add $80mm in revenue by end of first year). The company also openly acknowledged on social media that CLHI was the ticker and endorsed the argument of a ridiculously low valuation relative to comparable companies. That got folks excited, rightfully so.
Fortunately, the upside volume wasn't that much (certainly relative to the past few days), so there hopefully shouldn't be much upside resistance. A lot of folks were sitting on big gains (even at the current price) and took profits too. Without an institutional investor base, it's bound to happen. That said, the current market cap is trivial, even if one applies the 10x multiplier for conservatism.
Whoever is managing the social media account obviously doesn't know how to communicate with financial markets (been proven repeatedly). That's surprising given Stephenson has a hedge fund background, but he's probably got a lot on his plate. Uncertainty and ambiguity shake confidence and result in a lower valuation. They would have been much better off just saying "we're waiting on other entities to complete their work, but the company is moving forward with a number of exciting initiatives". Even better would be a PR stating they are working with OTC Markets and other regulatory bodies to complete the change of control and list TDS. Other Synergy plays have done that recently so the blueprint was right in front of them.
On the positive side, the aggressive sell-off provided a nice opportunity to accumulate shares at very attractive prices. Remember, the story has only gotten better with the B2B deal and possibly another one that could add a lot of revenue.
SEC link
Not that hard to find it. Lol
https://www.sec.gov/Archives/edgar/data/1826660/000149315220019460/form10-12g.htm