Orion Health

[BlackPeter]

Ouch - dropped through the $2 ... and falling. Quite high volume (well, for the stock) yesterday and today as well - looks like a larger holder wants out.

[RupertBear]

All of these recent NZ start up software companies have a model of building revenue before their investment capital runs out. Once the revenues and customers are in place the model is to turn down the investment tap (relative to revenue) so that the established revenues can turn into profits. A software platform, once established should be relatively cheap to run and service. So if OHE get the equation right, then big profits can follow.

Judging OHE as an investment requires you to assess how long the software will take to develop, and how quickly the revenues will build. So what we have here is a race to build the softwre product and its market before the investment capital runs out. If you believe that OHE can run their race thgen you should stay invested. If you think they will need to stop by the side of the track for a fuel top up (new capital), then you have to consider that new capital may be issued at a discount, and existing shares will be revalued downwards in tandem.

There is no connection between Wynyard and Orion, other than the fact that if new capital is going to be raised today there may not be as many takers in a broader market. Hence the discounting of any new capital might be higher than it otherwise would be. But WYN and OHE are different horses running on different courses. You have to evaluate any investment oppourtunity like this on its own merits.

SNOOPY

Thanks for your pearls of wisdom Snoopy. Much appreciated. I decided to cut my losses and get out at $2.05 first thing this morning for my blood pressures sake! May or may not be the right decision in the long run but I am relieved to be out at the moment. Cheers

[mondograss]

All of these recent NZ start up software companies have a model of building revenue before their investment capital runs out. Once the revenues and customers are in place the model is to turn down the investment tap (relative to revenue) so that the established revenues can turn into profits. A software platform, once established should be relatively cheap to run and service. So if OHE get the equation right, then big profits can follow.

Judging OHE as an investment requires you to assess how long the software will take to develop, and how quickly the revenues will build. So what we have here is a race to build the softwre product and its market before the investment capital runs out. If you believe that OHE can run their race thgen you should stay invested. If you think they will need to stop by the side of the track for a fuel top up (new capital), then you have to consider that new capital may be issued at a discount, and existing shares will be revalued downwards in tandem.

There is no connection between Wynyard and Orion, other than the fact that if new capital is going to be raised today there may not be as many takers in a broader market. Hence the discounting of any new capital might be higher than it otherwise would be. But WYN and OHE are different horses running on different courses. You have to evaluate any investment oppourtunity like this on its own merits.

SNOOPY

Hi Snoopy, the thing to remember is that OHE is NOT a recent start up, they might be a recent listing, but they've been around about 20 years from memory. As has much of their software. Hence my comparison with Rakon. They have big inertia in the market to try and overcome, and a regulatory environment that is simply not supportive of what they're trying to do. They can talk all they like about being a hyper-disrupter, but Healthcare is a heavily regulated industry (with good reason) that very definitely does not like to be disrupted.

[Snoopy]

Hi Snoopy, the thing to remember is that OHE is NOT a recent start up, they might be a recent listing, but they've been around about 20 years from memory. As has much of their software. Hence my comparison with Rakon. They have big inertia in the market to try and overcome, and a regulatory environment that is simply not supportive of what they're trying to do. They can talk all they like about being a hyper-disrupter, but Healthcare is a heavily regulated industry (with good reason) that very definitely does not like to be disrupted.

Thanks for the correction Mondograss. I don't follow OHE closely, so I was not aware of the 20 year history pre listing. I think it is fair to say that OHE only came onto most investor's horizons with their listing. So from most investors perspective it is a new company. And the theory of building scale in their market before the new (since listing) development capital runs (notwithstanding the fact that they have survived on seed capital for 20 years before listing) doesn't change.

SNOOPY

[Snow Leopard]

Thanks for your pearls of wisdom Snoopy. Much appreciated. I decided to cut my losses and get out at $2.05 first thing this morning for my blood pressures sake! May or may not be the right decision in the long run but I am relieved to be out at the moment. Cheers

Then you made the right decision.

So buy yourself a little treat (maybe a Jelly Tip )

Then work out what you are going to do with rest of the cash.

Best Wishes
Paper Tiger

[janner]

Then you made the right decision.

So buy yourself a little treat (maybe a Jelly Tip )

Then work out what you are going to do with rest of the cash.

Best Wishes
Paper Tiger

Cruel P.T .. :-))))) Though good advice.. Take note Rupert DYOR.

[RupertBear]

Cruel P.T .. :-))))) Though good advice.. Take note Rupert DYOR.

Was good advice and taken in good spirit I am doing my best to DMOR but I still make mistakes, but I have learned something new from each one so hopefully I wont make so many or such big ones in the future

[janner]

We..... WE ... All of us have learnt from our mistakes.. Today we still make them ... With still much to learn.


You are on the right track Rupert.. :-)))

[Snow Leopard]

Do not confuse making a loss with making a mistake.

You make your decision based on available information at the time.
What happens subsequently you use to make your next decision.

But sometimes you get the decision right and make a loss
and sometimes you get the wrong decision and make money .

Such is life

Best Wishes
Paper Tiger

[Baa_Baa]

Thanks for the correction Mondograss. I don't follow OHE closely, so I was not aware of the 20 year history pre listing. I think it is fair to say that OHE only came onto most investor's horizons with their listing. So from most investors perspective it is a new company. And the theory of building scale in their market before the new (since listing) development capital runs (notwithstanding the fact that they have survived on seed capital for 20 years before listing) doesn't change.

SNOOPY

With respect Snoopy, a bit more research might be in order.

Orion Health were a solid privately owned profitable company who had grown nationally and internationally with their premier health sector products, simply put, in patient administration and clinical information systems. They are a dominant provider of these systems with implementations in every DHB (hospital) in NZ and many clients internationally.

There is no notion of 'seed capital' funding the business prior to listing, ergo an early startup or hi-growth company. Orion Health was a mature growing fully funded and profitable entity going into listing.

So what was the purpose of listing?

If I could be so bold as to summarise Ian McCraes vision and intent, he saw a global opportunity, to be at the centre of clinical health care records and patient health care administration, or in other words the aggregator of the health care information universe, internationally.

It is a bold and brave strategy but one borne out of many years of local and international successes and a genuine need, allbeit immensely challenging to create national sector unification of health care records in patient administration and clinical systems. However Orion do actually have viable and proven systems and solutions that go a long way, to achieving that vision.

But that's not the sole reason they listed.

The gist of it is that the vision and strategy required funding way beyond the ability of the company to fund its own strategy and growth, solely out of profits. Hence going public.

So where is the funding going? There are three main sink-holes sucking up the company funding. They are:

1. re-platforming the core technical solutions (this means moving them from a licenced software model to a Software as a Service [centralised] model = very expensive re-write);

2. putting in place the international marketing and sales capability;

3. ramping up support for the growing customer base.

Since then, with a small hundred million or so of investors capital, the company has made significant inroads into their target markets.

But that is all circumspect in the bigger picture that investors are interested in.

Despite growth in target markets, a compelling and viable suite of healthcare administration and clinical solutions, excellent progress in replatforming the solutions, increased effective sales channels and customer support, Orion have a big problem.

The problem is, they're running out of money and the market capital value is being decimated. The market does not like being sold a story without clear evidence (the IPO) and then delivery (the results) of worth, then gutting themselves with repeated naive disclosures that re-enforce the perception of the company's ignorance of investors objectives.

It is obvious that the transition from private ownership to public listing and ownership is difficult, unfamiliar and awkward.

In the medium to longer term my opinion for what it's worth, which may be very little, is that Orion Health are doing all the right things to be a dominant global provider of health care patient administration and clinical systems and perfectly placed as the aggregator of the holy grail of the universal health identity record which is the core of all health care systems.

But it will take a few more truck loads of money from investors and a great deal longer than many expect or hope for, before Orion emerges as the self funded profitable company that it once was and again seeks to be, in the global health sector, albeit a great deal larger if they are successful.

Kansas or bust, it seems to be a common theme with NZ techs.