6 reasons why SEE gets bought in 2024

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I’m convinced that next year is set to be the year that Seeing Machines finally gets bought.

Here’s why: 

  • In the next few months Seeing Machines will prove to even the most sceptical observer that its DMS/OMS land grab has been successful, with it taking over 75% of the global market by value. The partnerships it has formed with the likes of Qualcomm, Magna, Valeo, etc. are unrivalled and its tech and implementation are clearly a cut above any other provider.
  • The launch of the third generation of its Guardian product for trucks and buses will see that business slash box costs and times for installation, enabling it to go ten times on that business in short order. Mobileye marketing it for Aftermarket should be a game changer.
  • Aviation will have been proved as a lucrative business that has legs, thanks to its partnership with Collins and the first of many huge, long-term contracts.
  • It is also clear that its technology has applications in other transport verticals, marine, and rail for instance, not to mention other industries such as robotics, entertainment, and security.
  • Profitability will become a certainty with the above contracts, leading to more funds investing and the price rising substantially, making it more attractive and fuelling the greed of a potential buyer.
  • There are just too many huge companies who now have a direct interest in acquiring this market leader, not to mention a huge amount of Private Equity capital available to fund a takeover. Moreover, if it were to go for $5bn, they could be fairly confident of it rising in value to $15bn-£20bn within a three-year horizon.

While the bulk of investors (including fund managers) are only now beginning to understand the strengths and potential of Seeing Machines, that can’t be said of the industry players, the chip companies and Tier 1s, who regularly work with Seeing Machines or come across its technology. Moreover, the likes of Alphabet, Amazon, and Apple know Seeing Machines and must like what they see.

Great business

A much smarter man than me, an investor, business manager, and experienced entrepreneur who has sold businesses, once told me: “Great businesses get bought NOT sold”. 

While some may hanker after a Nasdaq listing, I think market conditions over the next year and beyond will mitigate against this and leave an opportunity for a competitive bidding situation to arise.

I don’t know when exactly this will happen nor who will win but a bid is coming, of that I’m fairly certain. After all, Bosch was interested 5 years ago and Seeing Machines’ business is incomparably stronger now. Moreover, the dream of widespread adoption of autonomous vehicles has been shown to be just that, a dream that will take decades to be realised. Thus leaving the field to those who want to make driven cars safer.

Great value

In view of all the above, there is just too much value here at a sickeningly cheap price. (I’d be saying that even if the price was 35p, not 5p). The market abhors cheap value, as much as nature abhors a vacuum.

The writer holds stock in Seeing Machines.

2 thoughts on “6 reasons why SEE gets bought in 2024

  1. Why do you think the company remains so “under the radar” ?

    Any thoughts on the UAW strike?

    What role does VS Industries play these days?

    What valuation multiple are you using in your bull cases?

    Do you worry about Tesla? If not, why not?

    I believe the company needs to reiterate that it does not need additional (dilutive) capital during its October release – please advise them of this! 😉

    Any thoughts on Cipia? SmartEye? Are there others now too? I agree with you that SEE’s market share will be greatest…

    My valuation model suggests about 40p of we make it to 2026+

    Anyway, thanks for all your perspective over the years!

  2. I’m thinking that the “market” is discounting the UAW strikes and concluding that there will have to be another dilution event?

    This could easily be averted if the company coincidentally IPO’d on the NASDAQ. Reverse split 1-for-200 (~$12/shr USD equivalent aasuming today’s paltry 5 pence price), then raised another $20 million at $25/share (this would approximate Magna’s 11p pre-split)… and boost cash to eliminate any further concerns. Public company expenses probably a few hundred thousand extra dollars annuallyear.but shoudnt change trajectory meaningfully in terms of the year the Company reaches break-even!?

    MBLY well of its highs but doing relatively okay and hanging in there this year… with a $28B valuation and 14x P/sales ratio! Revenue estimates for $5.4 billion in 2026 (vs. $2.1B expected in 2023. A similar multiple in SEE’s 2026e would suggest a market capitalization of $648M or about 2.6x the current price (13p).

    Are there any logical comps for SEE aside from MBLY, QCOM? AVGO? SEYE. Cipia WAY too small. How do you come up with your valuation estimates/comments?

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