I'd like to provide an update on my investment thesis for Alcidion.
There have been extensive discussions about Alcidion in our community, demonstrating the epic value of Strawman.
Rather than rehashing what's already been said, I want to share how recent developments impact my investment thesis.
Original Thesis Overview: Earlier this year, I outlined my investment thesis in a public article. In summary, the thesis revolved around Alcidion's potential to achieve approximately $10 million in Annual Recurring Revenue (ARR), along with all services revenue, from the NHS. I believed this milestone could trigger substantial cashflow generation, painting a brighter future for the company.
A punch in the stomach: The most recent quarterly update delivered a significant blow to my thesis. It's not primarily due to the appalling cash outflow. I invest in some companies that are pre-profit, and am wiling to accept I’ll get the timing wrong in many of those. That’s OK. What hit harder was the clear indication that Q2 and possibly Q3 would be underwhelming quarters. Although the company maintained the idea of achieving EBITDA profitability by year-end, it's evident that this goal is now less likely.
It’s hard because year, I share the belief that many of these challenges are beyond Alcidion's control, stemming from the broader issues plaguing the UK healthcare system. However, the question arises - how many more quarters can I be told the same story?
Conclusion: This situation presents a tough dilemma. My investment in them has taken such a hit anyway that it’s become rather meaningless in my portfolio, but that shouldn’t excuse doing nothing.
I'm willing to grant them a few more quarters to see if the situation improves. However, if there's no notable progress, my thesis will be severely undermined by the time Q4 results are released.
