It's fallen off a cliff! Exits the NZX 50 after close of business today. Not clear where there will be support.
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It's fallen off a cliff! Exits the NZX 50 after close of business today. Not clear where there will be support.
Two big trades at the close down to .93 , hmmmmmm !
DonkeyKong - The listing that replaces ERoad in the NZX 50 index is Vulcan Steel Limited (VSL) effective market open on Monday.
Memo to Self: Always exit any holding to be removed from the NZX 50 Index immediately that is known (and preferably sooner, if that becomes a realistic possibility) regardless of fundamentals.
Over 3.5m traded at a VWAP of 93.65c today as the scramble to leave intensified, but my recollection is was at $1.24 when the announcement was first posted early this month.
Obviously - would have been a good idea for ERD. Not sure, though whether it is appropriate to turn that into a generic rule. Some companies thrown out of the NZX50 still do quite adequate. I remember HLG used to be in the NZX50 ... and some punters love it. Depends as well on whether they leave the index for their weakness or whether somebody bigger (e.g.) just got listed.
Well, I have punted in a small way by taking out the depth at 98c this afternoon in two transactions via my company and my trust. A pity I wasn't home on Friday afternoon to trade in at the close, but I have screwed up courage today. I guess while there is some liquidity just now it will absent itself soon, but I am happy to see what the next 12 months bring.
Interesting little announcement released just in time for Christmas. . .
http://nzx-prod-s7fsd7f98s.s3-websit...679/386337.pdf
"Market Release
23 December 2022
Contingent Consideration payment agreed with Coretex Vendors
Transportation technology services company EROAD (ASX/NZX: ERD), with its purpose of safer
and more sustainable roads, today confirms that it has agreed with the vendors of Coretex
that it will pay $19.5 million of contingent consideration relating to the merger of Coretex.
This contingent consideration will be comprised of 1,833,000 new EROAD shares
($10,998,000 million based on the price fixed at the time of the merger of NZ$6 per share) to
be issued on 28 December 2022 and $8,500,000 million cash.
The Coretex Transaction, which completed on 30 November 2021, included deferred
consideration payable to the vendors of Coretex of up to a potential $30.6 million payable
after 12 months following the completion of the transaction and several criteria being met.
The deferred consideration payment was approved by the shareholders at the Special
Shareholders’ Meeting on 30 July 2021.
Ends
Authorised for release to the NZX and ASX by Ksenija Chobanovich, General Counsel and
Company Secretary."
Not really $18.m vendors are getting
Only $10m seeing share price crush from $6 at time of merger …ouch
All this is of course disclosed in the 2022 Annual Report. The contingent consideration now paid for the Cortex acquisition is less than the maximum provided, which was $14.5m cash and the issue of 2,683,000 additional shares, so clearly not all criteria were met.
In FY22 ERD issued 15,125,447 shares via an equity placement at $5.54 in August 2021 and 13,317,000 shares as part consideration for the Cortex acquisition in November 2021 at $6.00. These were tremendous capital raises (so long as you didn't participate) given today's closing price on-market is $0.95.
Even with the minor share issue now announced there are only around 112m ERD shares in aggregate, so valuing the enterprise at just over $100m. So it's now wait and see how FY23 pans out before rushing to judgment.
Following on to the post above I note that the consideration for the Cortex acquisition in late 2021 was $NZ157m to which must be added the further $NZ19.5m contingency now announced. Of course, in both cases a substantial portion of that consideration was via issue of ERD shares at $6, so the cash component outlaid was far less.
Given Cortex was about 50% the scale of the old/pre-merger ERD then with the combined enterprise value on-market now assessed at just over $NZ100m it could be argued that there is potential value not currently recognised. I realise that this is not a metric used to value a Company, but perhaps the effect of exiting the NZX50 index this month has been overblown and resulted in an opportunity?
This is an entity which has already positioned itself currently with footholds in the NZ, AU and US marketplaces, not easily achieved by local businesses wishing to expand. FY23 is clearly going to be a year of consolidation, but afterwards there may be growth/profits to be had?
The Earn Out of$30.6m was based on retaining 60% of North American and Australian customers over 12 months and getting 5,000 more units used by customers over 12 months ( 64,000 units). Was $14.2m for the retention bit and $16.4m for the new units bit.
Obviously not all that happened
Coretex ‘acquired’ at 4.0 times historical sales and 3.7 times forecast F22 sales
ERoad guidance is about $160m sales for F23 …so currently trading at 0.66 sales
Shows you what the market thinks of them at the moment, even allowing for overall decline in market multiples
Forecasting to keep on losing money doesn’t help sentiment
Suppose one day they will be forgiven
Go on ronaldson shout yourself a bundle of ERD shares for Christmas …you’d think they couldn’t get any cheaper eh
I took a small first time holding (post #407) which is what has piqued my interest to comment. I'm not great on Financial Statements but the acquisition completed on 1 December 2021 so it was necessary subsequently to estimate what needed to be provided as at 31 March 2022 for the so-called contingent consideration liability yet to be paid.
As I read it the figure adopted by the Board then for inclusion in the accounts as a liability was $18.5m and this was identified as a key audit matter but accepted unchanged in the audited statements.
The actual final earn out has been assessed at $19.5m, the majority paid by issue of new shares at $6 (a price beneficial to other shareholders) but the point is that the criteria achievement didn't fall away post 31 March from the estimate at that time. So despite the headwinds mentioned at the half year reporting the Cortex component of the business isn't deteriorating and it's reasonable to assume benefits will follow after FY23?
winner69 - I did as you suggested but the bundle was relatively small and at 92c which reduced my average entry price to under 95cps, and now 0.61% of my portfolio.
The Bid/Ask pricing recently has been quite fascinating as the market struggles to set a level following the flurry resulting from the exit from the NZX 50 index last month. My opinion is that the potential for upside exceeds the downside risk currently and that any "good news" announcement from ERD could move the market sharply.
But it will be a waiting game for some time now to see if the company can derive real benefit from the merger.
whats going on guys? the sp isnt coming back down to the 52 week low is it?
Rawz - It seems the Bid side has, at least temporarily, won the struggle referenced above (#416) whilst we await further news.
Looks like the bollinger bands are tightening which indicates lower volatility? Lol never thought i would post dribble like that, gosh ive come a long way. (Probably got it wrong as well)
On a revenue multiple this is super cheap. probably worth a punt!
Hmmm - Close price today $1.06, up 17c. It will require sellers to hold their collective nerve next week if this pricing is to survive but it may be a sign of good things to come after all as we move past the level achieved concurrently with exit from the NZX 50 Index, which was always likely to be artificially low.
Speeding ticket tomorrow ? not that I'm complaining ....
Rawz welcome to the dark side Attachment 14441
Not only were the BB tightening predicting a price trend change ..check out the bullish RSI divergence event this last month :cool:
Media report
Hamilton Hindin Greene’s Mark Hampton said Eroad had been sitting at 90 cents earlier in the afternoon and due to the low volume exchanged over the day he assumed it could’ve been a “silly buy”.
And I am absolutely certain the trade of 995 ERD shares went thru at 5.00pm via the match pricing facility at $1.06 but looking now it has been changed at 5.22pm to be an SP trade at 93c. I don't think this sort of funny business should be tolerated by NZX. The trade was entirely consistent with the market depth for several minutes prior to the close (and still is in line with the depth even now). I will ask NZX for an explanation.
Yeah... price upwards on very low volume within an illiquid environment forcing TA indicators to go bullish does send up warning signs..
Lesson one for budding TAists...TA indicators are unreliable in a low volume trade environment.
A fake out type situation?
Yeah todays action is a bit smelly but I not totally convinced this is a fake out situation.. maybe maybe not..There is a risk and during Bear Markets I don't take risks...However..It isn't localised, its happening both on NZX and ASX...The closing price on the NZX is not ridiculous 93c up 4c (4.3%) Its the buy/sell that's eye watering 93c/110c very illiquid (lack of sellers). If there was a small buy at 110c at the close I would be more convinced..
Over on the ASX they closed a couple of hours later and the all day slow constant trend upwards closed at the 86.5c high (= 94.7nzc). The depth is more rational 85.5/89 no real buy volumes and no real sell volumes so on the ASX there seems to be more liquidity.
Anyway..As of today TA-wise ERD is a long term Bear with this strange sudden bull behaviour.
Silly Buying?...Hmmm...too many small buyers... that begs the question "are they all silly?"
Who knows?....
Disc: have no ERD..but added it to my watch list
The "Good Returns" Market Report said the same thing re the close price.
Also out of the blue, fleet company Eroad flew up the index at the end of the day and was up 19.1% to $1.06 when the market closed.
Hamilton Hindin Greene’s Mark Hampton said Eroad had been sitting at 90 cents earlier in the afternoon and due to the low volume exchanged over the day, he assumed it could’ve been a “silly buy”.
I have asked NZX Market Surveillance for a full explanation. It is only a small trade but it was not a "mistake" by a market Participant, as I observed the actual circumstances that prevailed during the match pricing period. I have followed this share very closely for several weeks now, since the flurry prior to ERD exiting the NZX 50 at a then low of 91c and a wide spread between Bid/Ask has not been unusual subsequently during this time as the market seeks to establish a new level uninfluenced by that event. The Ask volume has been consistently thin as few wish to sell at the recent lows given historic pricing, but the Bid volume has not responded until this occasion although the share had traded at up to 98c when I first took a holding before falling back again.
I just don't think trades/the match pricing facility should be manipulated in this fashion.
No view on the "manipulation speculation" ... though I can't see how one can talk about manipulation with these low volumes. Anybody who buys on price movements like that without first looking at the volume has in my view only themself to blame.
However - one generic observation: I remember over the years a number of threads where posters started to complain about price manipulation.
Again - I have no view on whether they have been right or wrong, but I did notice that in these cases stocks always went further down (and sometimes turned completely pear shaped).
Speculation about price manipulation is in my view always a strong indicator to stay away from the respective stock ...
GLTAH.
Nice that Fonterra are using a good NZ company. The deal being described by Eroad as 'a big win' suggests they perhaps had to beat off some strong competition and possibly the start of more business in the future. i would have thought Eroad would have already been in with Fonterra before now but no doubt very happy to sign them up now.
Disc; non holder but ex user and a fan of Eroad products.
https://transporttalk.co.nz/news/fon...eal-with-eroad
freebee - Thanks for posting. A genuine nugget news item, especially for holders. And what an aid to marketing going forward once units are installed and operable.
There is absolutely no doubt Eroad has a strong base in NZ. I know a few people with navman and they wish their company switched to Eroad.
Eroad need to keep pumping the NZ income into Aus and USA as that’s where the real money is
But lets not forget: ERD listed in (I think) 2014 for something like $3.40 per share. Always promising and a story as high-tech company with strong home market. Problem just - their home market was tiny and transferring data via the mobile network wasn't even high tech when they started.
It took them a long time to notice that their clients don't just need another toy to collect road user charges, but that they really want an integrated fleet management solution ... and I am not sure they really understand today what that means.
Looking at the TA: ERD had their ups and downs since listing, but mainly down. The only discipline they really excelled in: They are great in disappointing holders. They never managed to get a real market hold outside of NZ (and to a degree in Australia). Maybe enough to survive another decade, but to thrive?
Market was long time fooled by them, but it appears it has lost confidence. To turn the trend around ERD will need to show in my view sustainable and much higher earnings. Market does not run on promises anymore.
Anyway - GLTAH.
Like a few others here I've decided the upside potential outweighs the downside risk and took a small holding at close today for $0.90. Fingers crossed for good news!
Welcome to the Club. Looks like a good entry fee to take part. We may need to wait out the next 12 months before deciding if further/another subscription needs to be paid.
SP might retest the 52 week low at this rate :scared:
the company needs to come out with an announcement giving shareholders a boost. anything. just make stuff up about total addressable market, like some other loss making companies do
My apologies everyone, as often happens I have bought into a company and immediately the share price drops...
Condolences. However - there is something we all could learn from that. If one buys stocks in a downtrend, than the odds that the stock keeps dropping (the trend is your friend) is higher then the chance that the trend is turning.
The only reason to buy in a downtrend could be in my view if you have very deep pockets (like fund managers) and are able to change the trend ... or if you did a FA, are sure the company is ways undervalued, are certain of your FA ... and if you have a long investment horizon.
TA for ERD looks terrible. Not sure either, on what base one could generate a favorable and credible FA ... Note: hope is not a good investment strategy.
Anyway - the odds to buy a winner are much higher if you buy a stock in an uptrend (ask KW :) ;
the businessman - Buying into a stock where the share price immediately drops is just joining yet another Club. There are lots of members in this Club, especially when it is not a bull market, so you have plenty of company even if it isn't a desirable group to be in. It doesn't mean your judgement call was/is misconceived, just that you could have made a cheaper entry. In the long term a few cents here and there may not be material but in the short term it gives rise to regret. In this case there are many who entered at (much) higher prices than you and I.
I doubt there are any shareholders who post on or read this forum who haven't experienced regret on many occasions. It's probably as common as receiving a dividend from time to time, and a function of participating in the market!
I am often surprised that a share goes up straight after I have bought it.Usually goes down.
When I buy a share I do a lot of research on a company's fundamentals and look at it's TA.
Still even when everything looks great the share price goes down.
Then after awhile "I am off to the races". [Well most times].
The more research I do the luckier I get.
I have added to my long term holdings in downtrends,AFT,GEN,GNE,HGH,STU and others,and have done very well doing so.
Do not sweat the short term.
I wonder if there is a link with MFT. This from yesterdays MFT update:
However, general trading conditions late December and into January have been more subdued, particularly across our USA and Asian operations.
In the past month, domestic transportation in the USA has been less than satisfactory.
Chris Lee mentioned Eroad in todays taking stock:
https://www.chrislee.co.nz/taking-stock
... you need to scroll down to the third subject in his newsletter after (1) cockroaches and (2) syndicated property.
While I am not sure whether his article increased my confidence for Eroad turning soon back into a rising star ... he explains one of the mechanisms which brought the share price down. While he is not a fan of Index funds (as you can no doubt guess after reading the article) ... it is useful to understand these mechanisms.
ERD market cap is $90m and they are going to do about $160m revenue this year
I am amazed by this
This company biggest concern is it's cash runway. Wonder if they will need to do a capital raise. Revenue growth needs to be translated to profit growth. Doesnt seem to really be doing that currently but things might change
I took a very small position earlier this week now that its in the 80 cent range. thought too good to be true.
Lots of upside here. see what happens. EBIT target is -$5m to $0 for year end.
Could be taken over at these levels.
Not according to my post #446.
I think we are both right, Percy :cool: (for what we are talking about)
anyhow i am looking forward to seeing if they hit their EBIT target and then i will be interested to read their commentary on future outlook.
Considering how some of these type of saas companies trade 5x revenue.. if ERD get some runs on the board and get their momentum back its huge upside from here... this is why i have had a little dabble. just a punt.
SP being pushed down or what? thought i got a mean as deal at $0.84
No buyers, and any committed sellers are taking what they can get. Off the radar of most since exiting the NZX 50 Index recently.
Nothing to see here until May when we get the next results announcement. Given the current guidance I don't expect that will move the market much either. Methinks it's the half year to 30 Sept 2023 before we know if this beast is alive or dead and if the Cortex acquisition has cracked the US market.
Doesn't sound like an encouraging update unfortunately...
sales on target. not bad really.
good that the management team are doing an investor day about the road to positive free cash flow and how they will win in USA.
ERD has a lot to prove and that is way it trades so cheap... cheap compared to other tech/saas/whatever companies like IKE, SKO, TSK, PYS etc etc
I think the market has come to the conclusion that many of these tech companies, esp SaaS ones, have come to realise they don’t charge enough for what they offer
Hence drastic reductions in valuation multiples punters wanting to pay …..and why many of these companies are dispensing with large numbers of staff in an effortbto actually become profitable.
Up to now it seems many spend an extra buck for every buck of growth.
Begs the question ….will some/any ever become profitable
ERD seems to fit this thinking
Hmmm - A bit of depth on the Buy side now following the announcement. I suggest some got in cheaply earlier in the day as VWAP is 73c at this point.
yes i think you are bang on the money correct. got to wonder what is the point in a lot of these companies.
however TSK has proved it can be done. The McDonalds contract was renegotiated and now the Plexure business is profitable.
I was happy to read in today's announcement that they will show us the path to positive free cash flow in the up coming investor day. it shows management are thinking about it. And for a shareholder it means they wont be coming back every second year raising more money.
Happy to say this was me! A nice surprise to pick some up at 70c. Hopefully it won't be 60c in a month! :mellow:
The announcement read ok to me, many were obviously expecting a disaster not business as usual. Eroad have a solid NZ business that alone justifies the current market cap. If they pulled out of the US and Aus and reduced the associated overheads they would be nicely profitable.
ERD's investment case has always been that RUC gets adopted in more states and countries. RUC in the US and elsewhere has been delayed but the rational for it is only getting stronger (who pays to maintain roads in an electric future?). In the meantime ERD have built/acquired a valuable suite of additional use cases for their in-vehicle tech.
Well done Jaa - Not often you can buy a parcel at 70c early in the day and the share is trading at 80c at market close!
Seems they on hunt for somebody to pump more cash into the business somehow.
….. partnership options to contribute capital, expertise and additional market access
http://nzx-prod-s7fsd7f98s.s3-websit...579/390956.pdf
Goldman will find a buyer...?
seems like eroad are up for sale .... giving up growing by themselves :scared: ? or the business is at the end ?
any takeover will need to be above $1.50 per share
Jokes aside... at $1.50 per share its market cap would be $169m.
FY23 revenue is on track for $160m. They expect CAGR over next 3 years of 12%. So FY24 revenue will be $180m.
Therefore takeover of $169m or $1.50 sp = 1x revenue multiple seems fair.
Its right on the balance this one.. if (and thats a big IF) they can get traction in North America then this could easily start trading 5x revenue or $7.10 per share.
So if someone wants to takeover ERD needs to be above $1.50
Another SaaS company that’s beginning to realise they’ve not charged enough for what they’ve offered and concluded that they don’t really have a sustainable business model
Whatever punters will still use sales multiples to value it and todays price is really really CHEAP
On sales multiples over 2 bucks but not the 7 bucks it once was
Hey rawz ….seen this from Clare Capital, Gives you an idea of sales multiples for NZ/ASX SaaS stocks
Yes thank you Winner. I love this chart. I dont know how to value these loss making companies. Feel lazy defaulting to a revenue multiple but this chart helps put things into perspective.
Rawz, you could always use the old Price/book ratio
Book Value $2.24
So at 64 cents it’s trading at a 63% discount to BV
Goodness gracious it’s cheaper than OCA …..and it’s a tech company to boot
Spooky eh ..but both will attract these value investors
Nice idea to think they just sold their services to cheap. Easy to solve, isn't it? Hire a consultant and get them to recommend to rise the prices. Maybe, however customers not interested in paying more ... and clearly - customers have plenty of choice (not just picking the right price they want to pay, but as well picking superior service).
Paying Road User Charges electronically is not rocket science. Lots of systems around the world and many of them better integrated into fleet management systems than ERD's "solution".
https://alternatives.financesonline.com/p/eroad/
Maybe just another small NZ company thinking that success in NZ gives them a guarantee to conquer the reminder of the world. How hard can it be?
Why do we think their shares are more worth than a modest multiple of their income from Australia and NZ (which is not that much) minus whatever they invest into the big and scary world ...?
BlackPeter, ERD systems do a bit more than RUC for the customer...
True. But so does the competition :) ;
ERD started with RUC and added a bit of fleet management when they noticed that customers need more than a standalone RUC solution.
ERD's competitors come with decades of fleet management experience ... and added that bit of RUC.
Just check at market penetration to see what customers prefer. In most markets (but NZ) it does not seem EROAD who is winning ...
As a growing SAAS business, Eroad had its appeal and like other SAAS businesses was valued on a multiple of sales revenue. Much of the share price decline is in line with other SAAS businesses in NZ, Australia and the US. Minus 70% is pretty common for SAAS companies this year. Clearly they were in a bubble.
The merger with Coretex makes a lot of sense and should barring integration issues create a much stronger, robust company with larger R&D capacity. The more services they can offer the greater the lock-in and network effects they can create. Allowing for increased ARPU.
No idea why Auckland nurtured 2 large telematic companies focused on the US? There is now Whip Around too.
As for Eroad's core product, Ehubo, it is still ranked #1 in the US. Check out the user reviews.
Then there is the great RUC hope, that the shift to electric vehicles forces the US federal govt or at least more states to shift fuel tax from per gallon pricing to pricing per mile or RUC. That would be a bonanza for Eroad.
There is even a good reference transaction for guidance on Eroad's value. The very similar, fleet management and tracking company Azuga with 6,000 fleet customers in North America was acquired by Bridgestone in Aug 2021 for $US391m or about $NZ624m. More than 7x the current market cap of Eroad.Quote:
There’s no asphalt fairy out there that sprinkles asphalt in the night on our roadways - Republican state representative
Are we once again failing to back a NZ business success story for long enough?
Yess Jaa clearly cloud companies were in a bubble and have been rerated down big time
Most are down 60%/70% but jeez ERD is down about 90% from its highs
Must mean something
The extra 20-30% down probably due to the selling out by institutions when it was due/being removed from the nzx50 index.
Forced selling while the Sp had no buyers and no good news. Tough gig
Yes exactly, exaggerated further by negative sentiment and momentum sellers.
Winner the extra 25% down means its undervalued right? Last capital raise at $5.58 * 0.3/0.4 = a range of $1.67 - $2.32
Eroad has more US customers than Azuga had when acquired, plenty of companies for GS to talk to. Maybe some reached out.
Their latest presentation is here:
https://www.nzx.com/announcements/408579
Why do they not go after the Australian market? Has that been discussed here? That seems to me the obvious focal point in the short term....perhaps?
One neat feature is their geo-fencing of larger pick and drop off-sites in conjunction with RUC clawback claims - it can add up to quite a RUC saving for the client.
Regarding RUC implementation for electric car users in the USA - I'm not sure how eRoad would benefit if it was run like NZ RUC on personal vehicles....buy your miles and away you go. What am I missing?
Cortex senior management retained. 7 of top 10 customers by revenue are in US. Seems likely to remain the focus going forward to make the most of the Cortex acquisition (at a vastly inflated price mitigated only by the fact that a significant majority of the purchase consideration was by issuing shares at a valuation unlikely to be reached again in the next decade!).
I don't see a dividend coming any time soon but it is rare for a NZ company to be able to expand into Australia and the US, so it now has a footprint many have aspired to in the past but few have achieved and we should all hope for ultimate success.
North American business not to be divested ....'surrender is not an option'
https://www.nbr.co.nz/investment/sal...ble-for-eroad/
prob paywalled
Bit of a write up in Chris Lee & Partners Thursday Newsletter (today).
They did say it's not for the faint-hearted, probably not much in the way of dividends and may need a capital raise........
I've watched ERoad for a long time, but never quite keen enough to buy (thankfully). But certainly wish them success.
Traded at 69c today and no buyer depth beneath that, with sellers still prepared to capitulate from time to time. Definitely not for the fainthearted, but it does have around $160m annual revenue for year to 31 March so doesn't look broken, and headcount being adjusted after the takeover. The American market seems more difficult than anticipated despite the Cortex acquisition underpinning ERoads presence.
As per the Investor Day presentation last week it needs a couple of years to rebalance activity and capital spend. The gross enterprise value at the current share price is barely half what was paid for Cortex, which in turn was only about 50% of the scale of the combined NZ and Australian operation at the time, so massive destruction of value subsequently which just cannot be attributed to exiting the NZX 50 Index but looks like grossly overpaying for a marginal asset.
Regardless, land transportation is an industry not in decline and which is in need of the kind of value-add product supplied here. So some may be prepared to take a chance and enter at what is a cheaper price than my nibble recently?
Always useful to read threads from the beginning - they went 9 years ago into Oregon and should by now know the American market like their back pocket and only worry about big enough containers to bring all the money they make home. Well, they don't. It feels they just hope for another government to create an environment which suits their NZ specific solution of road user charges.
Just wondering which US government that would be - I guess if Biden can't create the right environment to make this small New Zealand company flourish in the US, than Trump Mach 2 is unlikely to help.
Whom else other than one of these two do we expect to govern over the next 5 years in the states?
While I understand that it is hard to let go of losing investments (believe me, I have been there) ... it is harder to watch this relentless downtrend while holding them.
I used to be a holder 9 years ago and went out a long time (many years) ago after learning that the only thing they seem to be reliable and good at is in disappointing shareholders.
But hey, maybe Biden invests his political capital to put his full support behind road user charges in the flavour of a wee foreign company ... or maybe he supports much larger American companies doing the same thing. What are the odds? I guess collecting electronic road user charges is not exactly rocket science. And fleet management - there are plenty of larger, much more mature and better products around than Eroad's piggy back solution on top of their road user charge management.
Anyway - I wish holders that tomorrow same green Martians land on time square and only fly back if Eroad sells them a fully featured Eroad road user charges management system (Remember - 100% NZ). But to be honest I doubt it ... and I doubt as well that the US will embrace after 9 years of very limited success the E-Road system.
How much is the share worth? Well, as long as they put all their money without success into the US, probably nothing. If they confine themselves to the markets where they can make money (NZ and Australia), than a valuation of ten times PE might be appropriate (given that both markets are rather mature).
However - at the moment they lose money. Ouch!
Not sure what the point would be in valuing them based on sales revenue. This is not a fresh start up, this a is company with a long history of scratching along the bottom.
Anyway - GLTAH!
BP - I bow to the wisdom behind nearly 9000 posts and so many years membership of the forum, not to mention the numerous green plaque endorsements attributed (do they have another name/description?). And I recall the insider trading convictions imposed upon two NZ executives some time ago now, which suggested the corporate culture was less than optimum then. I wonder if Cortex is a good fit in that regard given their senior executives now have the wheel in the US.
Still, I am not at risk of losing my shirt given the small size of my holding, but I admit it is an investment that didn't respond as I expected after the index exit related sell off. Disappointing. I think the year end outcome to 31 March is well signaled at this point, and clearly a lot of work to do in FY24 and FY25 if there is to be any redemption!
No need to bow, and I am certainly not better than anybody else in predicting the future :) ;
Just looking at the pattern of a NZ company trying to sell an in NZ successful product overseas - some are very successful (but they normally don't need 9 years and still writing red numbers) and many come back with a bloody nose. The odds are clearly not looking good, and time is not their friend while they wrote losses.
I used to work in my previous life in some industries supporting as well fleet management solutions - and for a short time even as system engineer designing a system for road user charges - i.e. I know a bit about the stakeholders and their needs and suppose that they haven't changed too much. Humans rarely do. Very conservative bunch of people - but if they change, they are unlikely to accept a solution which looks like made in the 1990 'ies ...
Anyway - I think that they well might be able to defend their NZ / Australian market position. Its a hard market to break into against established players (as they noticed in the US). If they then use these funds for the benefit of their shareholders instead of pushing water uphill ... then they are probably worth something. Haven't made up the numbers of how much this would be, but I suspect there might be better investment opportunities.
Hard to say.
The official version was "Steven has decided to take some time to recharge and focus on his family after an intense few years". He left effective immediately, but it sounds they tried to implement a succession plan already for years.
https://www.eroad.co.nz/nz/news-entr...20steps%20down
But anyway, its probably fair to assume that he might have been as well a bit disappointed about the development of the company and its markets - and no doubt both of these would have been important outcomes in his job description. Whether this supported his decision to retire, who knows?
That's right. Unusual to up and go just six months after the Cortex merger, which he must have driven. He doesn't look too aged up in the photo, but maybe after 17 years at the helm he was over it and the challenges ahead were different in nature.
Mark Heine, who was appointed acting CEO in April was permanently appointed to the role in June, having been General Counsel and Company Secretary since 2015. Previously at Bell Gully and Allens in technology, corporate and commercial, M & A, litigation, privacy, IP and antitrust law according to the Bio. So familiar with the Company as well as known to the Board, and must have stepped up pretty seamlessly at a critical point for ERoad.
.60 and still falling, never in my wildest dreams would I thought that ERD would have fallen to these levels and it now appears that theonly buyers now are sharies and that says it all.
Where is the bottom ?
58c now and still falling. Sellers seem to have completely capitulated. The trading outcome for FY23 has been well signaled for some time, so is it "out of whack" with some folks information? Or does shedding some 75FTE staff (which seems heavy for a merger) mean morale has collapsed in USA in particular?
At least ERD has now begun FY24 and a difficult year has been consigned to the rear-view mirror. Only time will tell us now how it is to be.
any tech company with high debt and that is unprofitable is going to get severely punished in a rising rate environment
I'm going with SailorRob's theory on this one - was happy to buy under a dollar, happier to top up at 58c. Spent my Sky dividend on this... That's enough for me now though, let's wait 10 years.
.55 and still slipping !!