Takeover endgame in progress for Seeing Machines

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I’ve been following the LSE board and I’d like to confirm that I’m as disappointed by the share price fall in Seeing Machines as any other long term holder. I’ve not sold out and would have expected the share price to be much higher by now.

Still, the good news is that I still believe SEE is the world’s best DMS supplier and will be snapped up very soon. Let me explain 5 reasons why:

1) The actions of the company. It doesn’t appear to have made any reasonable effort to mitigate the share price fall. Why would any management allow such a fall when it would have been easy to release positive news on contracts/prospects for the coming year?

2) Canaccord Genuity hasn’t released a broker note since January and then kept on reiterating 21p as its target price. However, in July it removed these reiterations. I wonder “Why?”.  By any logic a detailed note is overdue (and I hope it won’t be released to merely rubber stamp a low-ball takeover price). Anything below 30p would  be criminal in my personal view.

3) Silence from management. I’ve previously found that when the company goes silent on me it is for a good reason. It could be a fundraise but I think the recent bonus to the founders/staff is more likely a golden pat on the back before it is sold. Moreover, if a fundraise was being planned I’d have expected a raft of positive news.

4) I can think of at least 2 Tier 1s that absolutely need Seeing Machines Fovio technology for their businesses. Sources have also previously stated that chip companies will bid for SEE on any move.

5) There have been rumours of share price manipulation by market makers to force the price down. I don’t know the truth of this but AIM is the Wild West of investing, so I’d expect that there is no smoke without fire. Of course selling by Miton won’t have helped. Still, there must have been buying by others so I’d urge Seeing Machines to update its list of top 10 investors on its website.

Would Seeing Machines care to comment on this “press speculation”? If not, I think that might be a deafening silence under the present circumstances.

The writer holds Seeing Machines stock.

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One thought on “Takeover endgame in progress for Seeing Machines

  1. I own shares in SEE and your coverage of the company has been instrumental in helping me better understand the company and its future prospects. So thank you!

    I share your frustration on the negative performance of the share price over the past two months. I think it’s a little premature to discuss takeover even at 30 Pences a piece. I doubt the existing major shareholders (see below) would agree to a takeover anytime soon. Most of the value in the company is still a long way from being realized.

    Some of the reasons explaining the deflating share price include profit taking, the lack of positive news flow, management failure to produce results that met or exceeded their guidance.

    I know most people get really excited about the OEM segment of the company but we all have to recognize that the sales cycle within that area is rather lengthy. It may take 2-3 years between the time a design win is announced and when the company begins recognizing revenues. Yet, revenue and earnings growth drive a share’s price in the long run.

    From my part, I am more interested in the Fleet/Guardian and Rail businesses because they don’t depend on future productions of vehicles, the revenue associated with those two segments is recurring, and those businesses have great operating leverage. As time goes on, I expect to see h/h and y/y double digit increase in revenues within those segments.

    Whether SEE will be a 50-100 bagger is not a matter of if but when. In the mean time, cheer up and keep those blog posts about SEE coming.

    Name Equities %
    V.S. Industry Bhd. 245,466,542 11.0%
    Lombard Odier Asset Management (Europe) Ltd. 112,013,700 5.00%
    Legal & General Investment Management Ltd. 109,290,800 4.88%
    The Independent Investment Trust Plc 100,000,000 4.46%
    Herald Investment Management Ltd. 90,402,598 4.04%

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