Marketing masterstroke milks MOU

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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

6 thoughts on “Marketing masterstroke milks MOU

  1. I think your tone is battle weary, it has been a long journey and you have been through it all,. I’m a relatively new traveller on the SEE odyssey, but I can see that the endgame is approaching. Seeing Machines have been working quietly in the background to build these new developments without giving the opposition any advance view of our roadmap. So now with the Occula brand and the underlying optimised technology they have all price points and technology paths covered. With so many routes to market and the customisation options available to the Tier 1s they can reach build unique features on top. Yes they will milk each opportunity for an RMS but that is deserved after the long stealth. Their funding looks good especially with the new cars starting to come to market. Their technology is second to none and will have a long life, but Seeing Machines’ remaining time as an independent company will be short, surely they are on several companies shopping lists

    • I agree with a lot of what you say, especially the bit about an eventual take out. However, contracts will determine the timing and price of that. Moreover, dilution is a risk that needs to be discussed — indeed, Stifel raised it in its initiation note. Call me old fashioned but I expect an RNS to contain substantive news with figures attached not marketing fluff. I’ve been fed milk for far too long and need some beef.

    • That’s a bit unfair, even from a Seeing Machines fanboy who does no research and lets others do their thinking for them. I don’t know who you are only that you are based in Canberra….hmmm.

  2. HI Chris,

    I have been rechearchin the space now, and there is a clear road to explosive growth or as you have described a takeover(s) in the sector.

    May I ask what happend to SEE during 19-20? I mean they were a clear market dominator until 18. Did the SEE’s Tier 1 or 2 get uncomfortable with the executives making mistakes with SEE?

    May I ask what is your current view of the Smart Eye?

    The next big bunch of contracts will surely cement the positions for the sector’s future, if I would have to guess, i’d guess that the market would be divided into 40-40-20 fashion for the 22-23 models. The markets seems to value SE and SEE the same.

    • Hi JJ,

      I think SEE is still the market leader in auto DMS and I hope this will become increasingly apparent over the next 6 months — although I don’t believe Seeing Machines is keen to reveal its market share. Smart Eye, despite being much better on the PR front, doesn’t have the market penetration and as comprehensive an offering as Seeing Machines. I maintain my original view, (which has never wavered), that SEE will capture 75% of the auto market:

      In any case, I’d wouldn’t trust the short term valuation of Mr Market, as he is very fickle. You should do your own research.

      Where we can perhaps agree is that SEE is likely to be taken out long before its market share is an established fact.

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