Consensus community valuation
Average Intrinsic Value
Undervalued by
Active Member Straws
Added 3 days ago

0.032 cent close on the daily high.

Small $33 million market cap and data centre operator/owners are being greatly rewarded for revenue. Not necessarily profit. So this has some time to run.

Looking for 8 cents in the short term - $80 million market cap.

Disclosure: Held.

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#Large Volumes
Added 2 months ago

Large volumes on DXN today with the stock up 22% so far today.  +64m shares traded and 44m share traded yesterday.  They raised 1 for 1 at $0.01 a few weeks ago.  DXN is involved in data centres but have had some issues.  Raised capital to buy a data centre in Tasmania.

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#Bull Case
Last edited 6 days ago

DXN Data Centre Storage set to be supported by so many tailwinds.

#Increased data use due to COVID

#Gov mandating data networks to be Australian owned & operated for sensitive data across three tiers of government.

#NSW Gig Economy tender $100m + results to be released shortly.


#Excess rack capacity in Tasmania and Sydney..

Looking very good. .026 cents close.

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#Bull Case
Added 4 weeks ago

Company on the turnaround. Data centres is where it's at in a post COVID world.

NextDC started as a single data centre in Brisbane at $40 million market cap. Now $4 billion plus.

DXN only 20 million market cap, $4 million in the bank, oppies in the money (extra $11 million).  Execution risk here - but that is with all juniors.

News from Tassie and Syd data centres, new module contracts will mean automatic rerate with no need for cap raising dangling over their head.

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#Capital Raise
Added 5 months ago


Unconvinved by the acquisition and additional cap. raise today.

First impressions, without looking too deeply at the announcement, are that this seems like an excuse to buy some revenue. With all the focus on quality componentry and tight integration in the past, why the change in strategy to acquire this Teir 2 DC? And on such a dilutive basis too.

About 150m more shares thrown into the mix, at a price of $0.04, or $0.01 less than the most recent raise a few months ago, on a 1 for 3 basis seems like a drastic eroision of shareholder value to me.

$1m of the required $6 million to be raised (note that this is more than double the purchase price of the DC being aquired) is destined for working captial, which by my reckoning is still nowhere near enough to cover the rest of the CY20, so I still think DXN will need to raise again at least once this year. There's just not enough high margin revenue to cover costs.

Furthermore, surely any extra raise should have been spent on acquiring customers to their Sydney centre, and finishing the Melbourne centre which has been planned for years? 

I struggle to see any value for holders here – what am I missing?

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Added 5 months ago


Wow. Looks like DXN is about to go on an all out acquisition binge. But there's something fishy about it...

Take a look at their latest Linkedin post about developing or acquiring DC's in the near future:

Notice how it's been edited?

Now take a look at the screenshot I managed to take BEFORE it was edited... notice the difference? (See attached)

This deception (or clerical error?) coupled with what we be an epic spending campaign strikes me as a very dangerous and uncertain move for holders. It also signals that sales traction for the Sydney DC has been a disaster over the last 6 months. 

Chances are your shares will be extremely diluted over the next 36 months if they really are going after 10 DCs. Think of how much capital they will need to fund that! Either mountains of debt, or maybe 5-6x the amount of shares already on issue to cover that cost at current prices.

DXN seemed attractive to me when it focused soley on tightly integrated, all-Australian made and secure DCs, but buying up all sorts of small fish with random componentry from all over the world wrecks it. 

My suspicion is that DXN will start posting impressive revenue growth near term on the back of these buys, but in the long run, the debt and unknown issues that lurk within older DCs will start to bite, especially if we see the end of this bull market. So many acquisitions also gives the company an opportunity, if they so wished, to start fudging the accounts and moving things around to cover underlying problems. 

GLTAH, but I feel that this has become a dangerous investment given this drastic switch in strategy. Ceasing coverage.

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