The story was fading, and then took this odd turn. I'm glad I exited at more than double current prices over a year ago.

From Market Matters -

Adacel Technologies shares fell by a third on Wednesday, 23 October after announcing its intentions to voluntary delist from the ASX. The company specialises in simulation and training systems, primarily for the aviation and defence sectors. 

Why delist – The announcement cited the following reasons:

1. Limited trading and liquidity – ADA shares have been relatively illiquid, with only $14,740 of average daily turnover over the past six months
2. Valuation – The Board believes low trading volumes have had an adverse impact on the share price and its current valuation is “materially lower than the true value of the business”
3. Capital raising – Any further capital raisings at the current valuation will be highly dilutive and further reduce the share price
4. Cost savings – Delisting will result in approximately $626,000 in annual savings
5. Management time and effort – A significant portion of management time is currently being dedicated to matters relating to the company’s ASX listing

While these are all valid points, Adacel’s earnings history has been rather volatile over the past few years, including $9.2 million profit in both FY16 and FY17, breakeven in FY23 and a $6.6 million loss in FY24. 

This volatility has been underpinned by various factors such as lumpy project-based revenues, market cyclicality and the pandemic.

One question on your mind might be – Why did the stock fall so much?

As illiquid as Adacel may be – Investors can still buy or sell shares on the ASX. The ability to do so attracts a liquidity premium. Going private is another ball game to buy or sell equity.

Nice win for the company here with a FAA awarding a fresh contract worth $59m over 5 years.

Hopefully there are more wins to come and a consequent re-rate on the back of it for long-suffering holders.

Nice straw from @Dominator, with a lot of valid points raised.

However, one can argue that the current price of the company (even after the 4x from last year's lows) already accounts for the sluggish, lumpy growth and industry characteristics, by awarding the shares a multiple that is considerably below the market average (around 13x now after the post-earnings pop). In other words, they can continue to expand in their smaller niche and clip the ticket on service/project revenues in the meantime.

The renewed board and management seem to have righted the poorly managed ship of years past, and the company seems to be gradually returning to the market's good books.

They are coming off multiple earnings upgrades in FY21, and while guidance is a bit tepid for FY22, there is scope for the upgrade cycle to continue as the year progresses with the new found conservatism shown by the current operators. The company's financial position is also sound with ~ 11m of net cash on the balance sheet.