Some very much needed positive news for Damnstra and a pretty impressive quarter!

I just hope they aren't being overconfident and extrapolating this out in order to get to their FCF positive target by H2FY23.

As you say @BoredSaint , it would be great to see them under promise and over deliver unlike what they have done in the past.

The good news really is that they don't seem to be going to zero. There is a real business here with real products that are attractive to real customers.

Disc: Also still held...

Yeh I agree @AUROPAL .

I worry when they said they are going to be cutting costs of $8m instead of $5m which is going to make them cash flow positive. At some stage the amount of cost cutting is going to impact growth. Also there are only so many costs that can be cut.

I feel like this report is some what designed to make the market happy in the current macro environment. Will be interesting to see what they have guided for FY23.

Or they cut a heap of costs which will hurt any resumption of growth and potentially leave them mired for a long time.

@BoredSaint

I am curious. I think they are a low quality business. Additionally their management team consistently over promise and under deliver. There doesn't appear to be a competitive advantage - no moat in sight - and their financials are dreadful. Big customers have walked away which suggests their service isn't critical and businesses can go without what Damstra brings to the table. And to add to their woes Damstra increasingly appear like they want to be the jack of all trades and master nothing -- they offer too many services and their external culture and identity is consequently difficult to grasp.

My question for you and other holders -- what do you see in the business? Has your thesis been tested? Hopefully this doesn't come across the wrong way. We are all different but I see nothing but a bear case for Damstra -- so naturally I am curious.

@Rocket6 No offence taken. I sometimes ask myself the same question...

At this point when I’m down basically 90% it is such a small part of my portfolio that it is basically 0. Will harvest for some tax loss some point in the future. Even if it halves from here or goes to 0 it is not going to meaningfully move the dial much. If it some how turns it around in anyway from here I’ll take it as a bonus.

In my real life portfolio I have taken out some other utter garbage companies which I had purchased very early in my investing journey so am already carrying a tax loss into the next FY so haven’t had the chance to offload DTC.

I guess my decision to hold is not based on any conviction but more just laziness to selling. And perhaps a good reminder of what to look out for when investing in the future.

Fair enough mate, I get that. We have all been there!

You make a good point re: tax loss -- those looking to enter Damstra at these levels might be provided with an opportunity to do so in a few months around the EOFY period.

I am in the same boat as @BoredSaint , it has fallen so much that it is essentially worthless and so there is only potential upside. I will hold until at least the end of the next financial year before using as a tax loss. The business has until then to turn things around.

but any improvement from here between now and then will be a bonus.

I agree with this assessment. (See my straw from 9 months ago.) I held $DTC for over a year and there were two reasons for me exiting: 1) no demonstration of cash flow operating leverage over the 6 quarters of 4Cs and 2) lack of focus,… too many verticals, too many modules, too many geographies. Normally, if strategy and management were credible I’d give longer to allow operating leverage to develop, as 6 Qs isn’t really enough. But combined with 2) I marked $DTC as a loser. If a firm can’t figure out how to generate money, then ultimately it is worth zero. I lost about 40% of my investment in it, albeit a small position, but in retrospect it seems a good decision.

@mikebrisy

Smart words mate. Why didn't you shout it louder 9 months ago??hahahaha

/sarcasm.

Awkwardly obvious in hindsight.

Well said @CamSmedts34, that made for a great read.

Hilarious @CamSmedts34, but also rooted in the truth :)