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Locate announcing that they will be transferring the listing of the company to the NZ Stock exchange - I only scan read it, but seems they will list a co in NZ that will acquire the Australian entity in a scrip for scrip. Bottom line is that Australian shareholders will end up with a NZ share 1 for 1 listed on the NZX. Main argument appears to be that it is easier to run their Bitcoin treasury strategy from NZ.
My initial take - what a waste of shareholders money and for what benefit...the obligatory court proceeding, 40 page scheme doc etc not to mention delisting costs - this in a <$10m market cap company...ridiculous!
Held in IRL (for the moment anyway!)
Recording of the meeting with Steve Orenstein from Locate is now up, and you can access the transcript here: Locate2U Transcript.pdf
Big picture, it feels like the business has taken time to find its footing. Zoom2U (essentially an Uber-style marketplace for deliveries) doesn't excite me much, especially given that the actual Uber and others already operate in this space. Locate2U seems more promising. The growth there has been encouraging, but it's still early days and they remain a very small player.
Given my stance on Bitcoin, I’m naturally supportive of their treasury move. But it does feel like an odd call for a business that’s not yet cash flow positive and is still raising capital via an ATM facility. To me, Bitcoin makes more sense as a treasury asset when you're flush with cash and don’t have any pressing capital needs -- or if you're trying to offer indirect Bitcoin exposure to certain pools of capital (like Strategy (MSTR) does). But Locate is tiny and illiquid, so that angle feels like a stretch.. at least for now.
That said, I don’t think Steve is being disingenuous. He’s clearly a committed Bitcoiner. I just question whether they’re at a stage where a permanent holding makes sense. If they are on the cusp of break-even, and can fund growth internally from here, it may turn out to be a brilliant move. I just hope they’re never forced to sell, because volatility could easily land them in a tough spot.
Either way, it’s a bold and noteworthy step.
I’m not a holder, but I’ll be watching. If we see sustained sales momentum, positive cash flow, and a disciplined approach to their Bitcoin strategy, that could change.
Locate Technologies (ASX: LOC) has become the first ASX-listed company in Australia to add bitcoin to its treasury
Very interesting development. Love this for LOC. Showing the ability to change their mind, put ego aside and think progressively.
Interesting raise from Locate announced yesterday (formerly Zoom2U, @Strawman did an interview with him a while back - might be worth an update). Highlights:
1 Raising $1.45m at 7c
2 Cancelling Pure's warrants and transferring to equity at current price (a big positive - as the warrants were highly dilutive).
3 ATM Facility whereby equity can be raised over time - $2m over next 2 years at the price prevailing at the time.
Pretty good raising - and somewhat innovative. But none of that is out there. The interesting piece is that the CEO says that excess cash he will invest in a Bitcoin "strategic reserve". So, if you're looking for Australian companies that have an exposure to Bitcoin, now we have one. His explains his rationale at this link (he may have been listening to you a fair bit Andrew - its on linkedin but hopefully posted to website soon)...
Disc: Held IRL
CEO purchased another 28000 shares on market today…..
Just noticed that the CEO bought an absolute boatload of shares last week. Although they are quite cheap at the moment.
Total of 138,000 shares totalling $13,224 as an on market trade. Not exactly a life-changing amount of cash but the shares are up 18% today.
Maybe something in the works ?
Thanks @Strawman ,
That was a good interview - sorry I missed it live #daylightsavingsfail. But I did watch it after.
I think it's a great little business, with lots of potential. Only a microcap, but growing quickly and as some really good thinking about how to run the business for shareholders. I agree, that the cash burn is a question, although they do have resources to draw from and may not need another cap raise, depending on how much investment they make in sales and marketing (and R&D), and the uptake speed on Locate2U.
Thanks again for doing this - appreciate it,
Richard
PS - own Z2U IRL and on SM.
A few quick notes following our meeting with founder and CEO Steve Orenstein.
First off, thanks @rh8178 for suggesting the business. I thought it was pretty interesting.
I thought Steve was very impressive. Clearly a successful and capable entrepreneur having built Connect2Field in 2010 and sold to Fleetmatics (NYSE:FLTX) just three years later.
He has 25% of the company, and seemed to be very product and customer focused. Also made some very sensible comments in terms of capital management (it's the return, not the spend that matters most).
They seem to have really gained momentum -- a result of having (quite cleverly) nurtured and accelerated a solid network effect.
Sales are obviously growing very strongly, and it seems very noteworthy that enterprise level customers are being onboarded (Bunnings, Decathlon etc). There's also a very strong tailwind in terms of industry dynamics, and I think they will prove to be a very appealing offer to Uber drivers and the like who are looking for additional sources of revenue.
Cash burn is an issue -- even if the money is being put to good use. I suspect they will need to raise cash in the next year or so even though Steve is very cost focused.
It's on my watchlist.
A quick way to acquire customers.... just buy them!