RE: Thinking of Investing1 Jul 2020 17:15
igrow...
Investees are proving to be remarkably successful. DA and FVR are selling product/service on an SAAS model, meaning that revenues are not contract based but accrue over time, eventually turning exponential. At this relatively early stage, those revenues may not yet show up as being high, exacerbated by the fact that with some clients, revenues will be paid at fixed periods, possibly annually.
Mgmt do not disappoint. The investees are remarkably shrewd investments, and their success, at least to some degree, is due to the nurturing and contacts of Al Sisto.
Placing were required, and at short notice. Tern itself is effectively a startup and doesn't yet have the financial resources of a large VC, so had to raise cash quickly in order to ensure holding on to percentage ownership in investees.
As mentioned, these companies will produce very considerable cashflow. Both DA and FVR are clearly gaining traction in the market. Both have established remarkable relationships with huge companies. Mayo Clinic of all orgs have invested in FVR and Microsoft have called DA's solution 'best in breed 'and all but stated that it's required for large scale IoT deployment on Azure. DA's system is also being used on a white label basis. Wyld are building the satellite based IoT connectivity for a primary European Satellite manufacturer... that's absolutely massive.
Most punters on the AIM don't yet get the IoT. Many forget the implications of SAAS. And Tern has been subjected to an ongoing, long term shorter attack, initiated and maintained by one individual how has a historic grudge against the board going back eight years.
Nonetheless, why the price isn't far higher is a mystery to me, and I'm in here heavily and have been for a long time. I'm not sure many punters connect the investees with Tern, which doesn't help. Many blame the board for not constantly issuing RNSs. But they could be counter productive given the SAAS aspect.
Eventually, there will be an exit. And any exit from any of the four investees would be worth much more than the entire mcap of tern right now. That exit could come tomorrow, of a year's time. No one knows.
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