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Smart Eye fairytale reaches a climax

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With the news that Smart Eye is desperately using a SEK 60m (£4.8m) bridging loan to finance its business while it attempts a SEK 325m (£25m) discounted rights issue, the greatest Scandinavian fairytale since Hans Christian Anderson wrote ‘The Emperor has no clothes’ appears to be coming to a dramatic climax.

It’s sad news for investors who thought that the Emperor really was the leading global provider of driver monitoring systems and who believed that the 103 design wins it has long boasted of, and still boasts of, will ever go into production.

Indeed, the press release announcing this news reads like a profit warning, as it seeks to blame Covid for its problems, stating:

“The consequence for Smart Eye has thus been that the implementation of the Company’s software for DMS and Interior Sensing, as well as licensing revenues from existing design wins have been postponed. Hence, commercialization of design wins is expected to be realized later than originally estimated.”

Notwithstanding the massive dilution that investors will experience at the discounted rights issue, investors should really ask themselves how likely it is that Smart Eye will achieve its stated intention of a positive cash flow by the second half of 2024, given the parlous present state of its finances. 

How many public companies can you name who are forced to use a bridging loan to stay afloat?

Investors will have to wait until January 24th to find out the price of the rights issue. Given the likelihood of the price plummeting before then, they are likely to sell in droves. This is turn will likely increase the resulting dilution necessary to raise the required funds.

Of course, investors should do their own research as I freely admit that I’m a long-term holder of shares in Seeing Machines — and had until a few years ago regarded Smart Eye as a serious rival.

Magna-ificent performance from Seeing Machines

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Following recent announcements relating to Magna, reinforced by analysis from CEO Paul McGlone at an investor event in London, I’m confident that Seeing Machines’ technology lead across, auto, fleet and aviation will soon start to be reflected in its share price.

The recent news that auto Tier 1 Magna is paying US$17.5m for the exclusive rights to use Seeing Machines technology in its rearview mirrors until the end of 2025, while also agreeing to invest up to an additional US$47.5m, just confirms its global leadership position in Driver and Occupant Monitoring Systems (DOMS). 

Crucially, the cash injection removes any concerns that Seeing Machines needs to raise cash. It is now fully funded to profitability in 2024.

The Canadian Tier 1 Magna has gone exclusive with Seeing Machines in rearview mirrors because it aims to the vast majority of that market, 100% has been suggested by one expert, as no real rival to their DOMS offering currently exists. By partnering with Seeing Machines it has a product that is apparently superior to that of its competitors in terms of price, performance, and time to market. That’s presumably why it won the huge A$125m VW contract in December 2021. 

By 2026, it’s likely that Magna will have won as much as 50% of the overall auto DOMS market in partnership with Seeing Machines – since half of DOMS is forecast to be delivered via rearview mirrors. Thus it will have done to its main rival Gentex what Qualcomm has done to Intel in auto. The huge VW win with Magna should have confirmed this, future wins certainly will. 

It’s no coincidence that both Magna and Qualcomm have chosen to partner exclusively with Seeing Machines. These moves should be seen as part of a strategic land grab that I expect to deliver Seeing Machines at least 75% of the auto DOMS market by volume by 2026.

That is because its competitors (Smart Eye, Cipia, and Jungo) aren’t winning anywhere near the number or volume of RFQs that Seeing Machines is. For example, Smart Eye appears to have effectively been replaced by Seeing Machines in forthcoming BMW models. The 10 BMW models featuring Smart Eye technology are from past wins, such as the X5 (2015) and M8 (2018). 

Of course, OEMs may do some dual sourcing. Speaking to Smart Eye last week its CEO Martin Krantz tentatively said that Smart Eye “will probably be in future BMWs”. I wish him luck but I don’t think it is going to be a threat to Seeing Machines going forward. 

Indeed, investors need to beware of looking in the rearview mirror at market share unless they want to crash their prospects for significant financial gains. For those paying attention to the road ahead, it’s Seeing Machines that is in the fast lane to market dominance. 

Over the past year, Seeing Machines states that it has won 80% of the RFQs for which it has bid. I’m confident it will maintain that win rate with the $A1-2 billion of contracts for which it is currently bidding.

Looking at design wins, Smart Eye currently boasts 94, while Seeing Machines has 120. However, even this figure fails to reflect the latter’s dominance. Not all of Smart Eye’s 94 ‘wins’ made it into production, in contrast, every Seeing Machines design win has hit the road. 

I’ve long admired the Smart Eye people – not least for their PR bravado – but it can’t blind me as to where I should invest my hard-earned dough. I’d also be doing readers a disservice if I didn’t state what I honestly believe. 

Following the Seeing Machines investor presentation Friday, (when the video is posted I will provide a link) I’m very confident that an inflection point has been reached.

Increased margins

From now on license revenues for vehicles hitting the roads will begin to ramp up for Seeing Machines. This is a very high-margin business as the main costs have already been borne in the development phase. It currently has a pipeline of A$395m in auto but this is expected to grow substantially over the next few years on the back of further wins.

Similarly, in aftermarket more large enterprise customers such as Shell are coming along. These margins for selling the product and the monitoring service are much higher than selling indirectly via distributors.

It should also be noted that Seeing Machines Gen 3 Guardian will be launched by the end of this financial year, opening up the prospect of huge scale-up in Fleet sales. The product has apparently been re-engineered to reduce costs yet will be better, with automotive-grade additions and much faster install times. In addition, there is huge money to be made from the service element of monitoring the drivers.

Thus, now there is clear visibility of increasing revenues and cashflows with SEE set to make huge profits over the next few years.

In addition, I’m still confident that a lucrative license deal will soon be struck to deliver See’s pilot monitoring technology into the cockpits of aircraft. Being early is the same as being wrong but I hope by Christmas I’m proven right.

Bids coming

As readers know, I’ve long believed that SEE will face a near-term bid. To that view some have argued that such is its success that it really doesn’t need a takeover to prosper, unlike some of its rivals who hope to be saved by one. I’d certainly agree with the assessment that Seeing Machines could perfectly well prosper as an independent.

However, even if Seeing Machines isn’t ‘up for sale’, it doesn’t mean that it cannot be bought. A wise man recently told me: ‘Great companies get bought NOT sold’. Well, I believe Seeing Machines is a great company.

Ask yourself, how badly must some company want what Seeing Machines has? Its technological lead, data, and market leadership would take years and many billions to replicate for even a company of the stature of Google, Apple, or Amazon. If you had the money (and they do) why wouldn’t you just buy it?

If Magna is prepared to pay millions for the exclusive use of SEE technology for a couple of years, why wouldn’t they want it permanently? Qualcomm, AMD, Intel, and Nvidia also have reasons to enter a bidding war when the starting gun is fired. Indeed, even Gentex does if it wants to win future DOMS rear-view mirror contracts and protect its market share from rivals such as Magna.

There’s even the argument that a consolidator might want Cerence and Seeing Machines to create something very special.

Value stock

As legendary value investor Irving Kahn taught, investing is an art rather than a science but I think were he alive today, he’d take an interest in Seeing Machines as it ticks many of the criteria he looked for in an investment.

The good news for investors is that they can now sit back and enjoy the ride. It has been substantially de-risked, which is why Cenkos upgraded to 25p last week. I expect the other analysts following the company to do likewise in short order as the contracts and license deals roll in. 

The writer holds stock in Seeing Machines.

Remain positive on Seeing Machines

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This is just a short note to say that, despite the current shareprice being very much in the doldrums I remain positive on Seeing Machines as a business and investment.

It is the global leader in driver/occupant monitoring and, while I’m frustrated at the lack of news recently, I am confident more good news is coming. How can it not? Manufacturers of cars, buses and lorries are going to have to install driver monitoring in Europe from 2024. Given lead times, they have to make decisions now as to who to use. This process is also being replicated in the US, China and Japan.

Seeing Machines is already benefitting from this trend in partnership with many large players, such as Qualcomm and Magna.

In addition, I believe a behemoth will bid for Seeing Machines. Most likely a chip company but others are also in the frame if a bidding war breaks out.

Of course, you should make your investment decisions based on your own research. I have been wrong before and undoubtedly will be again. Only investing what you can afford to have tied up for a while is a good rule.

I look forward to meeting some of you at the investor event in London on Friday, 7th October.

The writer holds stock in Seeing Machines.

SEE share price to fly on aviation license deal?

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An impressive full-year trading update this week made it crystal clear that Seeing Machines is set for significant growth in margins, revenues and a speedy path to profitability, as license revenues for autos on the road ramp up, with fleet/aftermarket set to grow very quickly.

Surprisingly, the trading announcement was brought forward by a couple of weeks. The reason is likely to be revealed soon as the company subsequently announced that there is to be a presentation for investors in London on September 13.

Aviation license deal

The news I’m really hoping for before its investor meeting on the morning of the September 13 is that it has signed a license deal with a Tier 1 aviation supplier with an upfront payment that will bring forward profitability.

CEO Paul McGlone turned very bullish in a  recent promotional video interview with Proactive Investors in which he stated that in aviation he is committed to licensing out SEE’s technology to one or more partners: “We are going to be working through significant Tier 1 avionics partners to deliver our product to market. We have created the demand there so it’s a very strong proposition for the partners that we are talking to,” he confirms.

It surely cannot be a coincidence that after downplaying the significance of aviation in a prior interview McGlone has now become much more bullish. Certainly, my sources are confident of success and so I’m optimistic that an announcement on a licensing deal is ‘IMMINENT’. 

As to who it is, the obvious candidate is Collins Aerospace (part of Raytheon Technologies) with whom it is already working closely.

Note the wide range of areas within aviation that are being targeted: “The Agreement positions Seeing Machines to work closely with Collins to jointly market co-developed solutions across the Aviation industry to deliver its eye-tracking technology solutions to Commercial Air Transport, Business, Military, Rotary Wing, General Aviation and Flight Training customers to address improved safety and efficiencies for both pilot training and flight operations.”

Share price to re-rate

I think that such news, when confirmed, could be the catalyst for a huge re-rating in its share price, given the fact that:

  • It is likely to involve an upfront payment that could be significantly larger than the one it received (US$17.5m over 4 years) back in September 2015, when it signed a licensing deal with Caterpillar.
  • The ongoing license revenues, even if low double digits would likely run into tens of millions of Australian dollars each year. 
  • It will absolutely confirm that See’s pilot monitoring provides crucial safety benefits in yet another transport sector, thereby giving chip manufacturers another reason to acquire it in order to diversify their revenue streams. It’s a model that can be replicated in other transport sectors; most notably marine. 

In addition, Berenberg in a note this month mentioned that SEE should be a beneficiary of a strong US dollar as a quarter of its earnings are in that currency. In the note it estimates that Seeing Machines is “expected to experience a c8-14% tailwind to sales in the current fiscal year, followed by a 1-4% benefit in FY23”. With US earnings accelerating along with the dollar strength, I’d hope this will be an underestimate.

More contract wins

As if this wasn’t reason enough to be bullish about a share price rise, we’ve yet to hear of significant wins in auto and aftermarket/fleet that my sources have confirmed have been decided in SEE’s favour. I can only assume there is some slight bureaucratic delay in signing off the contracts.

By the end of this financial year, I confidently expect an official A$1bn order book for SEE – which will eventually turn out to be nearer two or three times that. 

To all sceptics, I say: pick up your mobile phone. Can you hear that noise? That’s not static, someone in Canberra is calling out: ‘Show me the money!” 

The writer holds stock in Seeing Machines.

Will Seeing Machines’ likely Nasdaq listing elicit a bid?

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Rumours that Seeing Machines is planning a dual listing on Nasdaq gained further credibility with the attendance of CEO Paul McGlone at a recent shindig organised by house broker Stifel to promote that very idea to clients. The question is, might a dual listing be the catalyst for a bid?

It’s long been known that a dual listing on Nasdaq has been under consideration at the Aim-listed tech company for a number of years. At a previous investor meeting held online on 24th November 2021 Paul McGlone stated (in answer to the question: ‘Are there any plans to move to a US market?’): “It is in our plan, it’s only sensible that we talk about it. I do imagine that we will end up there but I want to see some additional momentum before we flick the switch on that particular transaction.”

With Seeing Machines coming to dominate interior monitoring with its class-leading DMS/OMS system, it appears that time is drawing close. Indeed, some argue that such a listing would be guaranteed to increase its US profile and enable it to secure more backing from US tech funds.

Stifel served as joint bookrunner on an $85 million dual-listing Nasdaq IPO for Renalytix AI back in July 2020. The price tripled shortly thereafter but has since come right back down. More successful was GW Pharma’s dual listing back in 2013, before it was eventually acquired.

Mobileye IPO

A more appropriate comparison is the Nasdaq IPO of Mobileye, floated for US$5.3bn in 2014, bought by Intel in 2017 for $15.3bn and now in the running for a potential $50bn spin-off IPO, backed by Morgan Stanley. 

Examining the prospectus for the original Mobileye IPO in 2014, indicates that Seeing Machines is set to be a superior business. Not only is it dominant in auto but also in fleet and aviation. Moreover, its robust technology has applications well beyond the transport sector. 

Expected date of dual listing

While it appears that no firm decision has been made by Seeing Machines regarding a precise date for a dual listing, I believe that the much-mooted plan is moving inexorably forward.

My sources indicate that (barring a market meltdown) it is most likely to happen around Spring 2023, by which time Seeing Machines is expected to have achieved several milestones that will have more US tech funds eager to jump in. These milestones include:

  • An order pipeline of $A1bn in auto;
  • A fleet operation that has proven it can scale, boosted by the third generation of its Guardian product, which will be easily incorporated into telematics products for trucks and buses;
  • The launch of a dedicated aftermarket division to sell its Guardian product to niche manufacturers of buses and trucks, with monitoring services sold to their customers; and
  • A licensing deal in the aviation sector.

I also believe that there is an outside possibility that increased momentum in auto and fleet, with Seeing Machines pretty much set to win every contract it contests, could bring forward the date.

Will QC gatecrash the party?

The question is, will the host of chip companies who want SEE’s IP wait until its value has been boosted by a Nasdaq dual-listing IPO before swooping? Moreover, will Qualcomm’s Christiano Amon risk another chip company, or one of the three Amigos (Amazon, Alphabet and Apple) eating his lunch? It doesn’t seem likely. The Arriver acquisition proved Qualcomm fights for want it wants. 

Given the crucial importance of Seeing Machines vision technology to Qualcomm’s Snapdragon Drive automotive stack it seems logical that he will act quickly, to forestall any rival acquiring this important strategic partner. 

Sector ripe for consolidation

The sector is certainly ripe for M&A deals. Even peripheral DMS players are starting to be bought. In fact, one took place late in 2021, with Lattice Semiconductor acquiring computer vision company Mirametrix. The latter has a rudimentary DMS and, according to unnamed sources, went for a ‘huge multiple’ in a private deal. You can see its offering here: https://ir.latticesemi.com/investor-overview/presentations

Note the slide detailing some of the consumer uses for its technology entitled ‘Consumer Challenges’ — it may ring a (door)bell for some investors. The wide range of markets in which SEE’s technology can be used, aside from its transport applications, is one reason it is an attractive target.

Smart Eye would probably love to be taken over as would Cipia. However, SEE is the demonstrable market leader and will be the one that all the major players covet. 

As ever, if you’ve found any value in this article please consider making a donation to a charity of your choice.

The writer holds shares in Seeing Machines.

A tribute to Irving Kahn: a legendary value investor

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The article below, Investment lessons from Irving Kahn was originally published for the UK Motley Fool website back in 2010. The reason I am replicating it here and not amending it is that I’m proud to say that after it was first published I received a very kind email on his behalf from Andrew Kahn, his grandson, who worked with him at Kahn Brothers.

In it he wrote: “Mr Kahn read your article and was very pleased with its accurate assessment of the firm and your attention to the often-overlooked aspects of value investing”.

I’m sad to say that Mr Irving Kahn passed away in 2015 at the age of 109. However, his reputation remains as does the firm he founded and the books he helped write.

Let me quote again from the email I received: “Regarding books to which Mr. Kahn has contributed, he was Ben Graham’s teaching assistant during the period in which Mr. Graham wrote Security Analysis, and, to that extent, he contributed a considerable amount of research to that text. Another book that comes to mind is a small 50-page monograph titled Benjamin Graham: The Father of Financial Analysis that he wrote in the 1970s with Robert Milne for the Financial Analysts Research Foundation. At the time the Research Foundation was the publishing imprint of the CFA Institute, but it is now known as the ‘Research Foundation of the CFA Institute’.

It is therefore my hope that by reading the article you’ll learn from the wisdom of Irving Kahn and therefore avoid catastrophic investment mistakes. Should you wish to delve deeper you can read the books he helped write.

Investment lessons from Irving Kahn

This centenarian has the secret of long profits

At 104 years old Irving Kahn can aptly be described as the grand old man of value investing. While he may not be able to tell us much about the secret of longevity, he has much to teach about profitable investing.

Unbelievably, after 80 years on Wall Street not only is he alive, he is still active. Currently, he’s Chairman of Kahn Brothers Group, a privately-owned investment advisory and broker-dealer firm that he founded in 1978. It has approximately US$550 million funds under management.

Background

He is a value investor right to his marrow. This should be hardly surprising as he learnt from the master, serving as the teaching assistant to Benjamin Graham at the Columbia University Business School.

He was an original founding member of the New York Society of Security Analysts in the 1930s. He was also a co-founder of the Financial Analysts’ Journal and a director of Grand Union Stores, Kings County Lighting, West Chemical, and Wilcox & Gibbs.

Investment philosophy

On the website of the Kahn Brothers it explains that the company employs:

  • As bottom-up stock selection approach
  • Invests in undervalued equity securities that are usually out-of-favour

To determine which security to invests in it uses:

  • Asset valuations
  • Operating performance metrics
  • Long-term fundamental business prospects.

Moreover, “unlike many investment managers, we spend a considerable amount of effort evaluating the downside risk of every investment.”

Interview

In an interview Irving Kahn gave in 2005, he and his son Tom, Kahn Brothers president, outlined in more detail Kahn Brothers’ views on investing.

They regard value investing as an ‘art’ rather than a science, involving qualitative factors as much as quantitative. For that very reason, just as the best artists can occasionally produce poor work, even the best investors will make mistakes.

However, to reduce this risk and ensure a ‘margin of safety’, they follow these rules:

  • Favour those ‘out of favour’. Invest in companies that are either little-known or out of favour. The former tend to be smaller companies.
  • Low or no debt. They like companies with little or no debt and avoid highly leveraged companies.
  • Management stake. They prefer management that owns a lot of stock as they have the same incentive as shareholders to maximise the value.
  • Red flags. Companies that have volatile cash flows, high leverage and poor management should be avoided.
  • Earnings potential. Go beyond the latest set of results to determine the earnings potential of a business.
  • Patience. They are long-term investors with a typical 3-7 year, or longer, time horizon. If there are very few value stocks to be found, they are comfortable holding cash.
  • Identify catalysts. The market’s recognition of value is often dependent on a catalyst —an event that corrects the margin of safety discount. The identification of potential catalysts is therefore an integral part of the research process. Without a catalyst, a prospective investment can remain underpriced indefinitely and thereby result in a mediocre return.
  • Research. Do your own homework and pay no attention to what you see in the papers.
  • Be a contrarian. Maintain a strictly contrarian approach on the basis that half the price of a common stock is usually fashion.

A$23m Stellantis win for Seeing Machines

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It seems likely that the OEM win announced today by Seeing Machines is for Stellantis, using Magna’s driver monitoring system (DMS) in a mirror.

In any case, given the minimum lifetime value is A$23m, it is a pretty safe assumption that it will actually end up being at least three times that figure.

Cenkos close to upgrading

Broker Cenkos has maintained its 20p price target but admits it really could be lowering its discount rate and bumpting up that target price, given Seeing Machines’ accelerating win rate that is leaving competitors far behind.

Here’s the concluding comment from Marc Bunce, the Cenkos analyst covering Seeing Machines: “This new automotive DMS award comes less than two weeks since the last which further supports our view that Seeing Machines win rate and market share in automotive Driver Monitoring Systems are increasing. It is also reassuring to hear that this view is now also publicly supported by Nick DiFiore with his expectation for 40% market share by volume now marginally ahead of our expectations which represent around 38.5% by volume to 2030. We iterate our Buy recommendation and 20p valuation and note there remains significant upside in this from reductions in our discount rate, small increases in our Automotive market share expectations, increases in our cautious aftermarket expectations and the addition of aviation (we will incorporate aviation when we get visibility into meaningful contributions).”

Certainly, when Seeing Machines announces the wins I referred to yesterday I expect Cenkos to upgrade.

The writer holds stock in Seeing Machines.

Takeover thesis maintained as Seeing Machines dominates global driver monitoring market

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Despite the ongoing market falls, my sources (note the plural) indicate that Seeing Machines is winning ‘everything it goes for’. In particular, I’m expecting confirmation of another sizeable contract win in Japan, another huge one in the US and plenty of very positive Fleet news. Thus, my conviction that Seeing Machines will soon attract a bid remains as strong as ever.

Further contract wins

My sources indicate that another Japan win announcement is very, very close. I hesitate to use the word ‘imminent’ but you get the idea. In addition, I’ve heard a whisper that GM has awarded a huge Lidar contract for Ultra Cruise and thus expect that Seeing Machines will soon be getting confirmation of a huge contract. I anticipate this to occur within a couple of months.

I’m also expecting Seeing Machines to win Toyota and announce further expansions with Ford and Stellantis in due course. Lastly, the significance of the recent win of Renault via Qualcomm’s 3rd Generation Snapdragon cockpit platform shouldn’t be ignored. What it indicates is that Seeing Machines will be in every car that has Qualcomm’s system.

In addition, I hear Fleet is doing very well and there will soon be some significant announcements regarding aftermarket sales and a further partnership that should enable it to scale up the introduction of its driver monitoring technology in Europe to comply with the forthcoming safety legislation. 

Clearly, despite the gyrations in its share price, the business is clearly going from strength to strength. That is certainly a claim made by company executives themselves in recent interviews, such as this one with Nick Di Fiore who heads up automotive but also this video with CEO Paul McGlone. It is backed up by leading independent industry analyst Colin Barnden of Semicast Research, as well as financial analysts from a growing number of brokers; Cenkos, Panmure Gordon, Berenberg, Stifel and Peel Hunt.

In short, my thesis that Seeing Machines takes 75% by value of the global DMS/OMS  auto market remains fully intact, a market that could be worth A$1bn in 2025. That figure ignores the market represented by trucks, trams, trains and aviation – global markets in which Seeing Machines is set to dominate.

I, therefore, maintain that a near-term bid for Seeing Machines is very likely – regardless of the state of the overall stock market. (Regarding macro projections, I’ve been a long-term fan of Albert Edwards insightful analysis and would urge every investor to follow him. He has long been castigated as a ‘bear’ but in my opinion he is a realist, and investors are now coming to realise that.)

Seeing Machines is the global leader in one of the hottest areas in a very hot tech sector. It’s partnering with tech behemoths who are led by very smart people. They won’t pass up the opportunity to acquire Seeing Machines. Though they could well face competition from private equity players with a trillion dollars of dry powder.

Peel Hunt note on M&A activity

This very week Peel Hunt issued a note entitled, ‘Accelerating UK bid activity’, written by Charles Hall, Head of Research and Clyde Lewis, Deputy Head of Research. Although it focuses on companies in the FTSE 250, I think there is a read-across for quality companies on AIM. 

Here’s an extract from the note:

“A classic indicator of a disconnect between short-term concerns and longer-term opportunity is when non-equity investors start to buy the assets. This is clearly happening, with 10 bids for FTSE 250 companies progressing currently. This is unsurprising given the de-rating of the FTSE 250, with the overall index-18% YTD and 80% of the members down on the year. This has driven heightened interest from overseas and private buyers. There have been 14 proposed and announced bids in the past six weeks, adding up to ÂŁ21bn of equity value.”

Discussing the themes for investors to consider, the note goes on to state: 

“The pace has clearly accelerated after a slow start. There is a clear focus on hard assets, with most of the businesses being acquired having strong market positions with clear and lasting cash flow credentials. The mix of financial and corporate buyers reflects the strength of balance sheets, access to funding, and the ability to look through a tough economic environment. Weaker sterling should also increase the appetite from overseas.” 

I’d urge investors to do their own research as I’m not Nostradamus, just a journalist. That said, it’s undeniable that investors are still ignoring the oh-so-clear value to be had in Seeing Machines.

Cheer up

With all the terrible things going on in the world I’ve found that watching interviews with the legendary journalist and political analyst Anthony Howard has greatly cheered me up this week.

If that doesn’t float your boat, why not watch Queen performing We are the Champions at Live Aid in 1985. It’s a song that will make a fitting anthem for investors in this company when it is bought for billions. I dedicate it to all investors in Seeing Machines and its hardworking and talented staff.

The writer holds stock in Seeing Machines.

Churchill’s crimes revealed by Tariq Ali

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Tariq Ali’s new biography ‘Churchill: His Times, His Crimes’ is a must-read.

In this 400-page biography of Winston Churchill, Tariq Ali masterfully unmasks the man behind the myth. Using a wide-ranging history of his times to provide context Ali analyses Churchill’s pivotal role in many crimes against both working class people at home and those overseas who he viewed as a potential threat to the British Empire.

It’s a timely book, given the willingness of both the Tories and Labour to embark on post-imperial adventures while invoking the myth of Churchill as ideological cover for such moves. 

In this iconoclastic work the renowned political activist and writer makes a significant challenge to the Churchill Cult, an ideology that has led England further down a political and cultural cul-de-sac since his death.

In doing so, Tariq Ali displays his well-deserved reputation for sharp analysis and courage, uttering truths that few others dare to. Let’s not forget he was one of the few to explain the political origins of the anti-semitism smear campaign against Jeremy Corbyn and to loudly criticise the willingness of most Labour leaders to collaborate in US/NATO inspired wars, in Iraq, Afghanistan and most recently Ukraine. 

Many will now fume at the exposure of Churchill as an inveterate bungler, racist and war criminal, who advocated the use of chemical weapons against the Kurds in the 1920s, allowed 5 million Indians to die of starvation during WW2, and approved the use of nuclear weapons against Japan.

Establishment historians will doubtless queue up to criticise Tariq Ali and the mainstream media will vilify him but Ali clearly realises that Britain needs to confront its past and understand the ugly legacy of imperialism. An appreciation of Churchill’s mistakes and motivation is obviously key to that. Thus, Ali carefully explains the crimes he committed in Ireland, the Middle East, Russia, Greece and India, his actions invariably motivated by a desire to maintain the British Empire.

Ali also convincingly debunks the myth of Churchill as a dedicated anti-Nazi since, until the moment when he realised the British Empire was threatened, he was an admirer of Mussolini and Hitler. Indeed, in unleashing a civil war in Greece (December 1944) Churchill and the British army destroyed the most successful ant-Nazi resistance in Europe. As Ali convincingly argues: “the British Army and its Greek auxiliaries were guilty of serious war crimes, some bordering on genocide.”

As a source from which to establish a more objective view of world history from Churchill’s time to our own Tariq Ali’s book deserves to be compulsory reading in every school across the country. Yet, it is much more than a dry, historical tome as Ali’s practical, ceaseless political energy enthuses the reader. The result is a guide to better understand modern history and Churchill’s role in it and to challenge the dominant ideology that has made a racist imperialist a cult figure.

Surprisingly, despite the terrible crimes it catalogues this book isn’t a depressing read. For that we must thank Ali’s writing, which is infused with his characteristically dry wit and sense of historical irony. His deep cultural knowledge also enhances the overall flavour of the book. For instance, how many biographies of Churchill would footnote novels by Naguib Mahfouz and AndrĂ© Malraux? Clearly, with Tariq Ali the book is the man.

Ali has performed a valuable service in attacking the myth of Churchill, far more effectively even than those who daubed paint on his statue. The hope is that it will reignite an informed debate as to Britain’s present role as a key participant in the United States’ imperial project.

He certainly succeeds in tossing the Churchill Cult into the dustbin of history and, with characteristic disdain, firmly places the lid on the racist, Empire-lover. Nevertheless, it still remains our duty to ensure that the wretched dustbin, full of racism and bloody repression, is finally taken away and emptied.

This article was sent to The Morningstar newspaper. Read the published review of Tariq Ali’s book on Churchill:

Seeing Machines wins A$21m Japanese auto contract

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Seeing Machines has won its first Japanese car manufacturer, rumoured to be Honda, in a deal initially worth A$21m (US$14.6m). The cars will go into production in 2025.

The actual headline figure for the win is highly conservative and is likely to end up many times bigger as the car manufacturer rolls out the technology across an ever-increasing number of models. This is what happened with BMW, Ford and Mercedes and I’m confident it will repeat here. 

Japan turns to Seeing Machines

The really important learning from this win is that SEE has finally cracked Japan, after years of hard work. Marc Bunce, an analyst at broker Cenkos, says: “We believe today’s win is a first step into the Japanese market and that the cost and performance advantages of Seeing Machines software and embedded systems approach, will enable it to win further business with Japanese OEMs.”

Hence, this will prove to be the first of many contracts with Japanese car companies that will confirm Seeing Machines position as the global leader in driver/occupant monitoring (DMS/OMS).

SEE already has a confirmed (conservative) auto pipeline of US$240m, although in all likelihood it is likely to be double that. As Bunce explains: “The ‘cumulative initial lifetime value’ of these award wins now up to A$345m/US$240m which we believe is predominantly based on conservative minimum production commitments for initial vehicle models. However, with actual production volumes usually much greater than minimum commitments, and the technology already being seen on models beyond the initial award win, we believe the likely lifetime value of these awards is already considerably larger.”

Global leadership

It’s now clear, as predicted here 4 years ago, that Seeing Machines is set to take over 75% of the global DMS market. Ironically, it seems that the market has de-rated its main rival Smart Eye based on this assumption without re-rating Seeing Machines. It is a position that, while frustrating to those holding the share, can’t last much longer.

Seeing Machines very dominance is the reason I don’t believe it will be allowed to remain independent much longer. With every auto contract won the importance of Seeing Machines to Qualcomm’s ambitions in the auto market become more obvious. Given that Qualcomm was keen to swoop on Arriver I expect the time is approaching when Christiano Amon will again reach for his wallet to try and secure the global leader in DMS/OMS.

Qualcomm CEO Cristiano Amon let the cat out of the bag in a recent interview, in which he discussed Qualcomm’s diversification strategy. He confirmed, after boasting of its US$16bn auto revenue pipeline and talking about the Arriver purchase: “Clearly M&A is going to be part of Qualcomm as we accelerate those non-handset businesses.”

With SEE’s auto-win rate increasing the prospect of an actual A$1bn pipeline isn’t very far away. If you also include revenues from its fast-expanding Fleet and Aviation divisions, Seeing Machines is a must-have for a chip company that wants to diversify its revenue stream.

SEE is almost totally de-risked, with earning visibility becoming clearer every month. The future cashflows from auto, fleet and aviation are going to be huge. Moreover, with the continuing investment in its intellectual property to ensure its systems remain far ahead of any rival, it has created a strong moat to fight off any would-be competitors for the foreseeable future.

Takeover target

By the end of its current financial year, all this should be clear to even the most sceptical investor but to savvy industry players, such as Cristiano Amon, it must be obvious now. Amon doesn’t strike me as the kind of man who would ever allow a competitor to eat his lunch – as Magna can bear witness.

Only Alphabet, Apple or Amazon would have the financial muscle to separate Qualcomm from its intended target. I’d add in Tesla as a wild card. Elon Musk loves pulling surprises and Tesla needs a decent DMS. Instead of blowing tens of billions creating an in-house solution he might just wake up one morning and decide to buy SEE.

Blue sky valuation?

As to valuation? Well, I’d value Seeing Machines’ Auto division at US$5bn minimum, Fleet about the same. Aviation isn’t as advanced but it’s a huge market that it is developing, so say US$2bn. In total, its intrinsic value is approximately US$10-12bn today.

Alternatively, If someone has the nous to offer 50p a share and SEE accept, well done. In 2 years they could probably float the company for 5x to 10x that. 

Some will doubtless say I’m talking nonsense. But the same naysayers said that 4 years ago when I predicted Seeing Machines would grab a 75% share of the global DMS market.

The writer holds stock in Seeing Machines