Fast-growing, huge payoff, hefty premium scenario…
I guess that’s where the action lies. IMHO, if SDCH was fast growing, they would have done more with the cash acquired from the reverse split (ie, what was donked by the CLOK mgmt) and should be increasing cash, not decreasing cash.
Don’t get me wrong, Haugli pretty much wins in every scenario. Paulson Investment wins every time. But viewing SDCH as an investment, as an “outsider”, the common shareholder doesn’t stand a chance. As you mentioned, it would take a 10x gain to allow most to break even. And applying the rule of 72 suggests that at 20% increase in sales for a professional services company, it would take almost 11 years for SDCH to be in a position to sell and provide a realistic gain to the current common shareholders.
I feel sorry for those who invested in NSCT, then CLOK and then let it ride with SDCH. The market returns over the last 10+ years are hard to ignore.
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Tron - I understand your point, and based on what I’ve read, you’ve been pretty much spot on.
But, why take a fast-growing company public? Access to capital public markets, right? And, down the road, a huge payoff. Brian Haugli owns approximately 50% of the company. He must envision a scenario where Side Channel fetches a hefty premium from a well-heeled suitor, making him an extremely wealthy man.
And it’s not like he’s some charlatan peddling X one day, and something new the next. He’s a bona fide expert in the field.
Cash on the books has gone towards R&D and overhead (expansion). Perfectly reasonable capex for a nascent company, gaining a foothold in the space.
Will Side Channel succeed? Time will tell. There are certainly plenty of risks. The rewards, too, are significant
