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24-05-2020, 01:55 PM
#3521
Originally Posted by Cobber
As Craig outlined last week, many of PLX contracts come from 2014 days when the platform was licensed based on the number of stores, not users.
This is the difference between the old management and the new management.... the ability to pivot those contracts towards more profitability. I just hope when the old contracts come up to be renewed, that they are happy to pay increase costs for the platform.
To be honest the new management team have taken this company from strength to strength. I'm happy to hold.
What is likely in renegotiation of existing contracts, assuming a pivot to transaction revenues or share of transactions converting to sales, is that essentially that PLX position to take on more risk in that their customers customers (end users) transactions will be sustained or preferably grow, and the tradeoff will be to accept lower recurring license revenue. It's a careful balancing act.
The other thing that will feature is that while the bulk of PLX transactions will be from McDonalds, but the contracts are country based, the risk to McD's is disparity of costs (revenues to PLX) across their global network. With McD's ownership of PLX and influence, it is possible if not probable that McD's corporate negotiates a global contract model that countries roll into when their current contracts expire. That global negotiating position is very strong on McD's side and while they are likely to want PLX to remain viable and successful, they won't be motivated to make PLX super successful at McD's expense.
Ultimately the future prosperity of PLX is reliant on bringing online more and more global / country scale customers, using a blended license & transactions contract model as the benchmark. I'd like to hear more about how the White Castle rollout and IKEA is going. PLX have a habit of going silent on great prospects, like Anheuser-Busch. We've heard nothing either about 7Eleven Fuel App launched in March 2016, although it is still an advertised product. The SuperIndo contract is exciting for the diversification into grocery retail and assuming that goes well, the massive potential of SuperIndo's 51% owner Ahold Delhaize.
Having held most since 2014, after taking a chunk of profit in 2016, now mostly fully loaded again. 30% of portfolio. I am impressed with how the Board and Management have moved this company to growth, modest profit, and decent cash reserves. It is much more secure as each year goes by and has a great future, imho.
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24-05-2020, 05:37 PM
#3522
Originally Posted by Brain
Yes I would never say that DCF is nonsense it is just that it needs to be applied using good data. Garbage in garbage out.
I will never loose any sleep over the unknown unknowns.
Using DCF to value a SaaS company gives you a nonsense result. Use the right tools for the right job, Guys....It's like a painter using a sledgehammer to paint a wall and following up with a big time consuming discussion on the painter's forum site why it doesn't work..
Last edited by Hoop; 24-05-2020 at 05:39 PM.
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25-05-2020, 09:00 AM
#3523
Member
Originally Posted by Baa_Baa
What is likely in renegotiation of existing contracts, assuming a pivot to transaction revenues or share of transactions converting to sales, is that essentially that PLX position to take on more risk in that their customers customers (end users) transactions will be sustained or preferably grow, and the tradeoff will be to accept lower recurring license revenue. It's a careful balancing act.
The other thing that will feature is that while the bulk of PLX transactions will be from McDonalds, but the contracts are country based, the risk to McD's is disparity of costs (revenues to PLX) across their global network. With McD's ownership of PLX and influence, it is possible if not probable that McD's corporate negotiates a global contract model that countries roll into when their current contracts expire. That global negotiating position is very strong on McD's side and while they are likely to want PLX to remain viable and successful, they won't be motivated to make PLX super successful at McD's expense.
Ultimately the future prosperity of PLX is reliant on bringing online more and more global / country scale customers, using a blended license & transactions contract model as the benchmark. I'd like to hear more about how the White Castle rollout and IKEA is going. PLX have a habit of going silent on great prospects, like Anheuser-Busch. We've heard nothing either about 7Eleven Fuel App launched in March 2016, although it is still an advertised product. The SuperIndo contract is exciting for the diversification into grocery retail and assuming that goes well, the massive potential of SuperIndo's 51% owner Ahold Delhaize.
Having held most since 2014, after taking a chunk of profit in 2016, now mostly fully loaded again. 30% of portfolio. I am impressed with how the Board and Management have moved this company to growth, modest profit, and decent cash reserves. It is much more secure as each year goes by and has a great future, imho.
If McDonalds want a global license, they would be better off just buying the rest of PLX that they don't own. This is what they have done in the past with other tech companies who have been allowed to continue selling to 3rd party businesses.
I don't think McDonalds can exit PLX anymore, they are way to invested... and will only have the same result if they were to try and pivot to a PLX competitor.
It will be interesting to see how PLX get over the $30 million revenue mark... more McDonalds or more new customers. Time will tell.
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25-05-2020, 12:21 PM
#3524
Perhaps I'm being naïve here but does the McD shareholding inhibit PLX marketing to other fastfood chains?
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25-05-2020, 12:39 PM
#3525
Originally Posted by macduffy
Perhaps I'm being naïve here but does the McD shareholding inhibit PLX marketing to other fastfood chains?
Yes, the company signed a list of companies they would not be allowed to work with. Presumably it includes most of the large QSR companies but clearly did not include white castle. I don't know who is on the list or how long it lasts.
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26-05-2020, 09:19 AM
#3526
Looks like Plexy is out of the limelight for now... until next big announcement i guess. Bids aren't very strong..
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26-05-2020, 09:24 AM
#3527
Member
Originally Posted by Checkmate
Looks like Plexy is out of the limelight for now... until next big announcement i guess. Bids aren't very strong..
Shaking the tree.....
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26-05-2020, 09:28 AM
#3528
Originally Posted by thedrunkfish
Shaking the tree.....
Exactly, big boys games they want your cheap shares...
Originally Posted by Checkmate
Looks like Plexy is out of the limelight for now... until next big announcement i guess. Bids aren't very strong..
Don't take too much notice of live trading depth, that's how big fish suck in poor retail holders of their holdings at cheaper prices...
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26-05-2020, 09:37 AM
#3529
Originally Posted by sb9
Exactly, big boys games they want your cheap shares...
Don't take too much notice of live trading depth, that's how big fish suck in poor retail holders of their holdings at cheaper prices...
That’s how they suck the little fish into buying from them actually. They already have heaps of stock - ramp ‘em up and sell ‘em down. You know the drill.
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26-05-2020, 10:02 AM
#3530
Originally Posted by Balance
That’s how they suck the little fish into buying from them actually. They already have heaps of stock - ramp ‘em up and sell ‘em down. You know the drill.
Sure, fine for them as look at their short term trade gains. I'm happy to hold mine for until that time the true potential is realised.
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