Plant Perspective10 Jul 2020 20:56
Tide of market sentiment towards GDR & Covid clearly out with many PI’s left basking in their birthday suits (me included).
How long you are comfortable / able to sustain the cold &/or humbling and belief tide will be back in depends on patience, nerve and need to be somewhere else!
Personally, I think tide is unlikely to go much further out and is probable to come a long way back in so the LT bathers can splash around again. New bathers clearly welcome and are in for one hell of a paddle!
Away from la playa - today was unexpected, or was it? Hindsight always an aftertimers favourite tipple, but board has highlighted concerns, and to many today has vindicated those concerns and market reacted accordingly:
- Lack of approvals
- Lack of sales (EU??)
- Orders based on approvals too small
- COVID Stock simply overvalued to start with
Whilst other unknown or under appreciated issues had a light shone on:
- CE approval based on 1 open platform suppliers kit but need now to expand to 2 others, I have no idea how materially this has hampered orders but clearly GDR now seeking further approvals for a reason. Should all have been included in initial submission? Maybe not that simple..
- CE marking of software - as Marve(?) identified, not on PI radars this was required, plus software release emphasises DB’s highlighted teething issues appear a greater obstacle than PI’s viewed to securing orders.
- Approvals eg India only submitted mid June, maybe good reason, but to the uninitiated (inpatient investor) this doesn’t stack up.
To others today represents a chance for MM’s to take advantage and cash in on sentiment to lower price and stack up with cheap shares on a UK Covid play which in many opinions is the closest - aside from Novacyt - to securing lucrative approvals, sales and huge margins and commercialising on a cash cow which will be around for foreseeable future:
- Approvals not guaranteed but we’re close to end game (weeks?) on multiple fronts
- Distribution further expanded
- Product for large markets, Africa, India & US, looks extremely strong and well positioned
- ongoing dialogue with NHS progressing (I’m less convinced this will materialise but hey I thought 89p was the bottom today and topped up!)
- Software, only highlighted negative feedback, placated, presuming its good and hospitals willing to utilise
- Software provides bridge for POC product end of year on handheld devices (maybe overreaching here..)
- expanded CE PCR for reason, expect consumer led - eg sales once approved
- £1m preorders even without approvals, expect this will rise considerably when shackles are off.
- Sticky revenue for long period potentially easily offsetting £8m raise & provide rev to leverage buildout of previous core offerings
- US DoD still on play
- Bottom hit (?), placing level should provide nice level to bounce off and put placing issue to bed.
Today highlighted volatility, 20%+/- possible, today caught offside.
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