Wameja low-ball takeover by Mastercard

Well done holders of Wameja who held onto this stock and who have received a bid from Mastercard, albeit at a very low-ball price of 8p, well short of its 20p valuation from FinnCap. That is the price of holding only a minority interest, I guess.

Holders should hold on for the time being for 2 reasons:

  • 1) They won’t lose 0.5p a share as the offer price from market makers is currently 7.5p,
  • 2)  I noted the wording in the RNS today: “In the absence of a superior proposal” the bid has been accepted. There may be a slim chance Visa could come in to frustrate the process and set off a bidding war.

I hope long term holders of WJA as well as readers of my blog made some money out of this  stock, as Wameja was mentioned on Safestocks as a takeover play. However, it would be remiss of me not to acknowledge that FinnCap analyst Lorne Daniel put me onto it with his excellent analysis.

Lessons for Seeing Machines

There are lessons from this for private investors (and even management) in Seeing Machines, I believe.

Firstly, Lombard Odier, which holds 23.45% has accepted the Wameja offer. I do hope Seeing Machines is eventually taken out at a healthier premium. However, at its current price it remains vulnerable, particularly as Lombard Odier, via Volantis 1798, holds a jumbo 19.9%.

This also has lessons for holders of any share; there is an opportunity cost for holding a stock for years and years in the hope of a bumper pay day.

The writer holds stock in Wameja and Seeing Machines.

 

Marketing masterstroke milks MOU

Seeing Machines managed to raise its share price today with a masterstroke of marketing; a fluffy RNS that while looking lovely on the surface had very little in terms of actual content.

Said creation mentioned a memorandum of understanding (MOU) but provided few details as to the ‘global semiconductor company’ it was with, and no indication as to the the likely timeframe for any eventual deal nor any mention of the likely monetary value (even a range would have done) of an eventual contract.

Call me a cynic (I’m actually a realist) but when after umpteen yearly fundraises, never-ending RFQs, imminent aviation contracts that have yet to materialise, missing train contracts and umpteen launches (e.g. BDMS) and partnerships (Mix Telematics and Progress Rail) that vanish into the ether, I feel I’ve paid the high admission fee charged by the Realist Investing Club.

To be fair, I’ve witnessed a lot of shenanigans from a wide variety of stocks over the years. Possibly it has left me bitter and twisted. Moreover, most of the instances quoted above pre-date the present senior management of Seeing Machines.

I love See’s tech (as much as I understand it – that is a joke for you tech geeks out there) but am sadly cursed by an inability to sacrifice my journalist sensibilities in the pursuit of profit. Nuts, eh?

Why MOU now?

What perplexes me is this: why mention a MOU now, yet provide no details as to the party it is with, nor indicate the likely size of the eventual contract and a date by which it is likely to be signed?

Perhaps it is super smart marketing, big tease before delivering the details. If the contract is signed soon, great: get a double share price rise from one contract. I will be happy to have my lingering fears dispelled as I watch the share price rise and count my profits. 

Yet, if this proves to be part of a well-planned, pump and fundraise operation I (and many PIs) will be sorely tempted to do an El Jefe and scream: “Bring me the head of Paul McGlone” — while berating its nomad Cenkos for allowing such an RNS to be released.

In short, I’d have preferred an RNS that announced an actual contract/license deal with a monetary value attached (even a vague value range). This would have enabled the share price to sail past 5p, particularly if it put to bed any need for a further fundraise. For the record, I’d certainly not be keen to see an eventual contract announced in a month or two alongside a fundraise, in classic AIM style.

I’m saying this publicly as I hope Seeing Machines responds by soon putting my fears to rest. I want greater transparency. I want further details of this MOU. Better still, quickly provide an RNS that gives something more solid: details of a contract worth millions.

The writer holds stock in Seeing Machines

5 pillars of wisdom for Seeing Machines

I noted the latest RNS from Seeing Machines re. its new hi falutin ‘3 pillars’ strategy….if you’re going to crib a marketing strategy steal from the best; Islam and/or TE Lawrence. Well done.

Strip away the technobabble and hyperbole and it appears that Seeing Machines is providing would be customers with maximum flexibility as to how they choose to use its class-leading technology at a great price, with the option to provide over the air updates. Of course, I am not well versed in the world of BS bingo so I’ve avoided any mention of ‘deep edge’.

That’s all very fine and I look forward to numerous licence deals that remove any lingering possibility of a fundraise and share consolidation. Imminently.

5 pillars

I don’t doubt the technology, just management’s resolve to deliver for private investors. I’d therefore like Seeing Machines to build these 5 pillars of wisdom into its actions:

  1. Demonstrate that management are so convinced of its future success that they use their own cash to buy meaningful numbers of shares. Especially the CEO.
  2. Greater transparency re. RFQs, BDMS, Aviation, strategy for trucks and and yes, even trains. Silence just won’t do.
  3. A reduction in BS bingo and technobabble in comms: terms like ‘low integration pathway’ etc, etc. Explain what you mean in plain English. Australians are renowned for their plain speaking so let’s have more of it. My neural processing unit will be better able to read your RNSs if you do that.
  4. Put to bed the idea that a fundraise may be needed. Stifel in its initiation note on 21st July 2020 indicated one would be needed, stating: “Key risks to our thesis include the need to raise funds; order push outs; regulatory changes; competition; and market disruption.” (Incidentally, why isn’t this note up on the Seeing Machines website for all PIs to read?)
  5. An online webinar for the results is needed. One where investors can post questions online in real time. React did this and if a tiny company like that can do it there is no excuse for SEE not doing likewise.

I should add that I still believe this technology is great and will save many, many lives. Good luck to all those at the company. Congrats on the Mercedes S launch. 

Cenkos note

For those seelievers out there, the Cenkos (house broker) note published today provided a very positive take on the latest developments, with analyst Marc Bunce commenting: “We see the launch of Occula (TM!) as an exciting development for the company with this step change in the Seeing Machines technology expected to further the gap from its peers in benchmark testing. It is the result of significant work under the radar and the announcement demonstrates confidence in the company that it has world class technology not just in DMS but also human tracking and detection. With the added offer to license for virtually any embedded or ASIC application a Tier 2, Tier 1 or OEM can think of, Seeing Machines has brought its top tier performance into easy access and affordability for all vehicles (and locations in vehicles) as well as other applications. This will undoubtedly increase its potential market share in automotive but will also no doubt pique the interest of other technology developers and integrators. Seeing Machines is therefore opening back up from a transportation focussed technology company to a human-machine interface technology supplier which could deliver further significant value to investors which is not reflected in the current share price.”

That almost reads like a ‘come and get me’ plea. There may be takers once a few more contracts are signed.

The writer holds stock in Seeing Machines