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I think it is a little shocking. Only 6 employees awarded shares are there really only 6 that are contributing to the success. What message to all the other employees? Why not name them? Why not include performance criteria? Why are they getting them for free? Why not have a an option price trajectory which demonstrates reward as value is increased for shareholders? At least that would be less dilutive and provide confidence in the current value. Why are two founders getting accelerated vesting period? This is a company that has been listed for 10 years it is not a start up. Slightly bemused but I suppose if I really don’t like it I could take my profit, sell and move on. Having been here for over 5 years that would be a tough call. Disappointed though.
Any deal will have to be based on a multiple of forward earnings beyond 2019 given that SEE has signed contracts which will deliver known significant revenue from y/e 2021. Even if a take out was calculated on the basis of 2019 future revenue it would be based almost solely on Fleet/CAT as there will be little revenue from Auto as that does not land until 2020 or 2021. So you would not be taking account of any of the known future Auto revenue. In my mind any multiple applied to revenue before 2021 estimates is therefore arbitrary. It is important to remember that the year end is 30 June. With regards to cash I am less convinced that there is a need for further equity. With the CHIP obviously manufactured by third parties and the OEM’s contracting for delivery from the Tier 1’s, a combination of favourable payment terms and some form of invoice discounting should reduce the need for equity.
The best research I have seen was the Cannacord note, that helped clear out the Institutional seller at 3p in November and cleared the way for the fundraising (for those without the history an institution that owned 12% plus changed investment manager and became a seller due to a change in investment criteria). For an understanding of the size of the automotive market the Redeye research on Smarteye is useful and also it highlights how far behind one of our competitors is if you ignore all the noise. The reality was that as soon as Autoliv had a chance they dumped Smarteye for See. The history behind that was See was stuck in an exclusive with Takata, whilst it got them into GM it put them 3 years back with the other Tier 1’s. The progress with Tier 1’s since highlights the quality of the product. What differentiates and what is the barrier to entry? A key point is what amounts to millions of hours of real life data which comes from years of monitoring the CAT trucks and over the last couple of years Fleet. This technology has been successfully deployed for a number of years now, it is proven and its algorithms are supported by on road data. It is also across all transport sectors. Recent v significant changes include: Potential EU legislation mandating DMS, even if EU does not go as far as mandating it, it is highly likely that EuroNcap will require it for 5* rating. Launch of new fleet product more cost effective etc. supported by insurance industry who have as good as said that if fleets have See technology installed that could qualify for up to 20% discount. The CHIP - this is huge for Auto as this is the key to enable a relatively small company to deploy in scale. See is funded. There is potential for great news flow, Autoliv’s investor day presentation has been referred to before and is worth reading to get a feel for what could flow from them. New auto announcements likely (that is just from Autoliv) After the year end (30 June) expect to see positive news on Fleet. What is great about this share is that the key investment in the Chip and upgrade in guardian has been made, the technology risk has gone and the margins are significant. There is a regulatory imperative for OEM’s to deploy the technology and competition is light. As referred to above the barrier to entry for the competition is that none will rival the hours of live real time data. I haven’t mentioned rail, airlines, health and general AI. What valuation I wonder would this have if listed on Nasdaq?
In January 2003 I was tipped to buy a company called ASOS, 8p I think at the time. I was never too upset as I always thought I would have sold when I had tripled my money. Not there yet with SEE but I am sticking as I really do think this has legs. With the Fovio chip it also has the ability to scale up without being taken out. Have enjoyed this board other than when it gets personal, I hope all long term holders will still be here in 4 years time when the dividends start flowing.
The Canaccord note gave a pretty wide range of $20-$40 with a margin of around 70%. The Fovio chip is big news. One more OEM say Japanese over the line and this gets v compelling. Canaccord has A$40m sales from automotive in 2021, must be close to that with existing contracts. Is Fleet keeping up with the pace?
I agree with all of the below this is the first time that I have had my confidence in this share knocked by actions of the Company. I suspect that given the proximity to the year end with only just over a month to go we are inevitably going to be at the lower end. More good news created by the Company would be welcome, last weeks announcement great but SEE needs to be able to deliver.
The SaaS model is a fleet management tool and will not be in all vans, trucks etc but not a bad default position if they all have a Fovio chip.. The question would then be can a Fovio chip or equivalent be upgraded to a SaaS model should fleet mangers want it, with relative ease?
Am I right that we have the Fleet market pretty well to ourselves? Few will be able touch the hundreds of thousands of hours of real life monitoring that See has. The EU documents refer to every Van, Truck and Coach. The Redeye initiation note on Smarteye is worth a re-read. It talks of Trucks being a distraction for SEE, I suspect it will be a rather profitable distraction. Auto The note does however highlight how much catch up SEE has had to play since the nearly disastrous exclusive deal with Takata. The SEE team have done an incredible job since. I took a look back at the Directors report in March and it does say what I had recalled being said somewhere “Most automotive OEM’s globally are Seeing Machines customers”. This has been quite a long and sometimes painful journey but I am just beginning to let myself think this could be the one and being “all in” isn’t quite as ridiculous as I have sometimes thought. Competition will come but it is pretty incredible given yesterday’s announcement how little competition there is.