Pinned straw:
@Seymourbutts -- There are certainly some positives in Alcidion’s latest update. While I’ve sold down most of my shareholding, I’m still uncertain whether the company’s past struggles were the result of a major management failure or simply the consequence of operating in a sector dominated by slow-moving, fiscally constrained, and bureaucratic customers.
That said, management isn’t entirely off the hook. There was a degree of hubris during the period of cheap capital and inflated valuations -- they arguably overextended themselves based on aggressive growth assumptions. While they are now taking corrective actions, the company still faces some challenges. Most notably, revenue recognition remains sluggish, with a significant portion of new sales not contributing to FY25 earnings. While cash flow has improved, the company is still not consistently cash-flow positive, and its path to sustained profitability hinges on executing well in the second half of the year.
Still, Alcidion is in a stronger financial position than before, with improving cash flows and a growing base of contracted revenue.
I could be tempted back in if we see some good sales momentum and continued cost discipline -- especially if the market maintains a skeptical footing.