RE: Fusion investment case27 Jun 2024 15:01
Re posted
Investment case
THE PAST
The way I see it is that the company went through a tough period, caused by being too focused on a particular area, and client base.
This focused client base was highly dependent on a constant flow of venture capital.
When VC dropped off across the board, the smaller companies (fusions clients) had to put projects on hold and therefore so did fusion.
This put fusion in a difficult place and led to a need for fusion to raise capital during very unfavourable market conditions.
The combination of these two issues caused a massive fall in share price and rightly so, which was not good for existing shareholders.
SURVIVE MODE
The board addressed these issues by reducing out goings, headcount and the directors agreed to be paid in shares.
They also diversified their client base to include venture capital but also blue chip organisations, research clientele, and branched into other areas such as veterinary.
They also have started a royalty program to achieve on going working capital.
This was a smart and needed move as it eliminates the past from reoccurring.
THRIVE MODE
To achieve this the company has been heavily promoting itself in the industry and signed with huge companies and organisations some of which are in the billionaire bracket as a result.
The smart speculation is that one very large antibody company has also signed a test contract with the purpose of branching into the therapeutic area. This is a gateway which could open many partnerships for both companies.
And of course having signed with USA Cancer research to validate their OPTIMAL at zero cost.
INVESTMENT CASE
This is a recovery trade at these levels. But one that has been derisked heavily now and provides an almost unbelievable opportunity to buy cheap stock,
The current share price is not attributing any value to fusions, tech, Intellectual property or the changes the company have made in their outgoings, cash position, royalties, grants, or stronger portfolio base.
They are fully funded into 2025 and like to be cash neutral to positive this year.
They have a working pipeline of sales which is converting to revenues and growing fast. The board are seeing a marked improvement across the sector and from the recent interviews it suggests the company has already turned a corner and are doing well.
I don’t think opportunities like this come along very often and it is certainly a buy and hold trade which could lead to a huge increase in value,