RE: CB - Cash is King29 Aug 2024 17:46
Magna and Seeing Machines understand the market for their combined product. At the time of the agreement, a few years ago, Magna must have been confident that the share price would be 11p or more when the time came for loan to equity conversion. Hence, they believed, and most likely still do believe they have purchased SM equity at a good discount to the future share price.
With so few players in the DMS market and virtually no chance of any entrants in the near future; cars increasing by the day on the road with SM IP, and the competition struggling; the share price could start to appreciate as the market realises the strength of SM. The transparency in their KPI data will also cement their prominent position as the number 1 in DMS and occupancy.
In any case, if the convertible note has not converted prior to the end of its term , the best option is usually to extend the term of the note for an additional year.
By this point in time , I feel the DMS landscape will be so much clearer, and there will be no issue for Magna.