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I think this one is just good housekeeping, albeit it could have been phased in over 2 AGMs so that people don't freak out (which they have).
More fundamental is whether they can continue to invest what they need to in the face of larger and better capitalised industry giants. It's also become clearer that whilst the UK may have been the right market to IPO, it isn't now the right market for them to be listed. Credo and Astera illustrate that. I think that Alphawave is better positioned business, but the process of reinvention since IPO and the lack of a longer-term investor perspective has punished them in the UK. I take comfort from the fact that management and board still hold the vast majority of the shares, so they have more to gain or lose than any of us.
I think you've described it perfectly. Rosalind, Victoria and Susan all have telecom backgrounds. Telecom used to be a key market for Alphawave (and I think they still do a bit there), but the vast majority of the business and growth is not in Telecom. Paul is in the silicon materials market, which is not high speed communications (it's one of many end markets for silicon on insulator wafers). I can understand why they want the credibility of Susan and Paul for the IPO, given listed company experience, but it's not relevant now. They need industry folks in data centres and networking.
I think's important to stick to the facts and let others draw conclusions. In my opinion, if you are spending ÂŁ300k+ a year on those directors, you want people who, at the current stage of the business, can give end market credibility and open doors.
The ley question is whether they can bag some big AI/Datacentre deals. If they can, it flies; if they can't, it dies.
My read is that information doesn't exist because they haven't issued the warrants yet. It says that the warrants are based on the customer placing orders, so presumably it depends when those orders will be placed. Also, I read that they'd need to place $700m of orders to get that 2.5%. I think that's the more relevant data point.
The issue is that you don't understand what comprehensive loss means. They have less cash because of FX (it's not a realised loss until they actually convert funds) and they've made acquisitions (i.e. swapping a low return asset for a high return asset). However, you can't reason someone out of a position they didn't reason themselves into, so it's a rather pointless discussion. Best of luck!
That's all FX or technical JV accounting. There's a bunch of non-cash stuff as well. You aren't looking at the business. I think you can look at a page of numbers, but you don't know how to read accounts. Do you understand the accounting meaning of 'Comprehensive loss', as opposed to PAT as opposed to Adjusted PAT?
xtw2, no need to get frustrated. We are all ultimately on the same side and trying to understand the situation better. But human beings also have a habit of confirming their own biases, whether bullish or bearish, and thatâs something we all need to guard against.
ShearClass, I wouldnât say âoptimisticâ just yet. On one side - a handful of shorters motivated by short term profiteering and an article, not picked up by any other outlet, with journalists driven by clicks. On the other side, some of the smartest long only investors on the planet with massive research teams. Plus, focus on the quality of the company itself, itâs technology, and customers (China aside).
Again, not reaching any conclusions, just trying to learn.
Barcap, fully agree with that. I'm also researching the non-China customer element of this. There's lots of focus on China given the size of the bookings, but most of their customers are American. Come up with anything there?
ShearClass,
Very good questions.
Question 1 - I don't know specifically, but I'm not sure why that would ring alarm bells. Whether the total is $147m or $163m doesn't detract greatly from the investment thesis. The prospectus refers to a variation to the Verisilicon agreement as part of the product partnership. Plus, at the time of the prospectus, they explicitly said that all of the agreements have not been signed. They may have changed. So there could be a number of explanations. I'm going off the more recent disclosure of $147m as the correct one.
Question 2 - There's a difference between revenue recognition and invoicing. How do you know they haven't received the payment? They may have, they may not have. I don't know any companies that announce to the market when an invoice has been paid.
So all very good, thoughtful questions, but not something that I read much into. I am sure all will be revealed in due course!
Barcap, thanks. I prefer to take the approach of filtering the rumours and looking at facts/evidence. When you see rumours, follow the coin - the winners are a handful of shorters taking advantage of a lack of liquidity and the losers are largely retail folks who panic. Others may take a different approach and be very successful with that but I look at the longer-term prospects.
I've read the prospectus - it is all in there and in quite a lot of detail. They are large bookings because they are over a number of years. They explicitly said on the interims that a booking is a non-cancellable contract and that revenues are expected in H2. Again, if you don't believe them and think they are telling porkies, that's your judgement.
L2analyst, I don't follow the connection between the two statements you've cited.
They said in the interims that the China deals were booked in H1, so why would they be in Q3? They've said they expect to have first revenues from CPP in H2. It seems clear - I don't see any inconsistency or confusion here. If you don't believe them, then that's obviously up to you, but it seems an odd conclusion if you look at the pedigree of the board and you consider who their customers are beyond the China names (there are clues all over the place).
Again, not coming down either way, just looking at the data.
ShearClass, I appreciate your thoughtful comments on this. The large China deal was disclosed in the Prospectus in a lot of detail, including the amounts, the various agreements, the structure and expected timing of all the payments. On the recent call, they've also said that a booking is a non-cancellable contract. In the interims, they explicitly saw how much of their bookings are from CPP and Verisilicon. In the interims, there are 28 mentions of CPP and 12 of Verisilicon.
Again, not coming down on one side or another, just looking at the facts.
ShearClass, re: your comments on Henderson and Blackrock, itâs worth noting that Amati are one of the most vocal supporters of Alphawave. In your posting on CODE, you said âThe fact Amati took 14% in the IPO [of CODE] is a further positive, given their excellent track recordâ. Given that are saying that you rate Amati, are you saying that they wrong on Alphawave?
To be clear, I am not advocating one way or another on this particular stock - I am assessing the evidence and just trying to sift the fact from the speculation and hyperbole.