ikeGPS Group Limited

ASX:IKE

ikeGPS Group Limited

ASX:IKE
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$0.725 (0%)
Last close price
#323
Rank
4
Held by
20
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Reports (2) My Report Forum Investors
Forum Topics IKE IKE PE takeover rejected

Pinned straw:
RhinoInvestor
Added a month ago

The board has just rejected a PE takeover offer at $1.

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02910509-3A661163

Coupled with the latest quarterly results showing continued growth of subscription revenue, I’m hoping that this one now can run up towards that value. After about 20 months holding so far just to get back to even it really needs to do something (given its massive market underperformance). Maybe I am too slow to cull underperformers but generally like investments at this end of the market to have 36 months to demonstrate their potential (or show me that I made a horrible mistake with my initial hypothesis).
Strawman
Added a month ago

I'll take that as a positive sign @RhinoInvestor -- it was a big premium, so if the major shareholders were against it they obviously see it as undervaluing the business.

The share price underperformance strikes me more about excessive past valuations than business performance (shares are still >7 x ARR) -- but the business itself seems to be making genuine progress.

Sales up, cash up, gross margin up, contract wins up.. and they service almost all the major players (with lots of scope for expansion within that set).

I've emailed the Glenn the CEO to see if he'll come talk to us and answer some questions.

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mikebrisy
Added a month ago

@RhinoInvestor @Strawman the extreme historical valuation came a few years ago when they had one (or two?) “superuser(s)” who racked up huge transaction revenues. These weren’t sustained, as they were related to a particular fibre rollout.

The problem is that Glenn never gave proper visibility of that concentration risk, and even when it fell away, he was, IMHO less than transparent, if not misleading.

This history is now plain to see.

But underneath this “bubble” which burst, there is steady growth in subscription revenue and platform usage. It’s been growing steadily year on year.

The “transaction bubble” left a bad taste in my mouth, as I believe management should have been more candid, unless they didn’t appreciate their own exposure (which would be incompetence, so I can’t believe it.)

All that said, $IKE is looking interesting again, with what appears to be a solid growing revenue base.

I’m watching for a sub-$0.60 entry, but am not convinced I’d buy because management candour is for me a significant issue.

Disc. Not held

11
Strawman
Added a month ago

Ahh, that's right!

Excellent point @mikebrisy

9