There's a few of us taking some tough medicine today and offloading Highcom (formally XTek) at a significant loss. Way back when I wrote this about the Company:

"When I look at the history of XTEK that’s what I see; decades of largely loss-making years, dilutive acquisitions, constant cap raises, letters from the longtime Chairman expressing remorse for yet another disappointing year.  But when I look at XTEK today I see something a little different…I see at least the possibility of a company that has new leadership, has cut away the fat, has a very clear strategy going forwards, has the infrastructure to deliver it and finally has tailwinds behind it."

I was wrong. It seems nothing has changed. While we don't know how the half year loss will convert to cash it seems likely that a CR is just around the corner. It's kind of hard to fathom how two months ago they were guiding to increased revenues and profits and yet were just weeks from closing the books on a $13-15 million loss (their market cap at the current price is just $18 million). Either they were lying/delusional or - worse - they didn't know. It's almost like they only look at their own numbers twice a year!

I had rated Scott Basham as an operator. He, along with the Board, now go onto the blacklist. If he transfers to any company I own, I will sell it. Apart from the lack of trust, the capital allocation has been appalling. They deliberately chose to hold increased levels of inventory, which is now being written off. They chose to set up shop in Poland, which is now being abandoned. It makes you question the decision to move the Xclave from Adelaide to the States. They strongly indicated they were close to an acquisition. I now wouldn't trust them with that decision. Fortunately for those that continue to hold I don't see how they could afford to pay for it.

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