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Thread: ikeGPS - IPO

  1. #16
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    "Using three cameras, the software can even triangulate to figure out the distance between two points in the picture: whichever two points you pick out. "
    http://gizmodo.com/while-you-werent-...mos-1632621335

    Essentially a gimmick on a sub $1000 consumer tablet has the potential to replace ike's entire business.

  2. #17
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    I think your post number 5 is relevant and all this lot may have been blindsided by a lack of knowledge of what is available in the outside world.Brokers and others have to do research before they can invest other peoples money but how they explain the share price is beyond me.They may say it's a long term investment until it reaches 50 cents and then say it's too small a percentage of the portfolio and so we are selling it.Fund managers can escape client scrutiny until reporting time but then it may be too late for the poor investors.It's just the way it is.Balance would put a more enlightened outburst on the situation.IMHO.

  3. #18
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    I note their latest announcement states that the partnership agreement signed in the USA generates revenues that meet their prospective turnover through the next two years! and in a interesting field of intelligence and defence. good on someone for keeping the wheels turning.

  4. #19
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    have been thinking about investing tech companies like IKE or GTK, GEO. any suggestions anyone?

  5. #20
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    Quote Originally Posted by babymonster View Post
    have been thinking about investing tech companies like IKE or GTK, GEO. any suggestions anyone?
    I haven't looked at IKE in any great depth, so cannot really comment (and this is the IKE thread so sorry if my comments below are out of place).

    But I do consider myself to have a pretty good understanding of GTK's business (and systems) and I don't consider their offering to be particularly ground-breaking, but they are established and do have paying clients. However the technology stack they use is dated and there aren't any plans to modernise this AFAIK. I understand this (and other things) to be causing a few issues with at least one of their more progressive customers opting to bring parts of their billing systems inhouse - a project that has been successful thus far and they are continuing to invest in this development. From my understanding their solution has been faster and more cost effective for them. This is a big warning sign IMHO & for that and many other reasons their SP would have to be massively undervalued for me to consider them.

    I also have a good understanding of GEO and don't really have many positive things to say about their product or their track record so far - I believe they're currently looking for a CEO and burning through cash - until they prove themselves in what is a very competitive market (do a Google search for "job management software" and you'll see what I mean) or you fancy burning some cash I wouldn't entertain investing in this company either.

    I've also had a few beers (which apparently makes me bearish on tech stocks!) so don't take my word for it DYOR etc.
    Last edited by KiwiGekko; 09-01-2015 at 04:11 PM.

  6. #21
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    Quote Originally Posted by babymonster View Post
    have been thinking about investing tech companies like IKE or GTK, GEO. any suggestions anyone?
    None of the above (especially GEO!!!)

    I suggest you look at DIL, PAY and ERD

  7. #22
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    Thanks both of u.

  8. #23
    Xirr
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    Hi all

    Ike GPS isnt exactly a popular stock in here but thought I'd update on their progress.

    So lets begin.

    Sales
    Sales likely to be at least double FY14's - so lets be generous and say $5m or thereabouts. So could be down around ~20%-25% down on PFI. I think it probably more likely that sales will be down ~30-40% on PFI.

    Lets drill down:

    GE Mapsight sales
    Down by 25% against PFI volumes. No info given on $$$. I’m guessing discounting has gone on to get even these volumes. No guidance given on FY16 sales other than saying that some FY15 sales have slipped into FY16.
    Combined with the increase in OEM sales which suggests the branded sales are not going too flash, can I point investors to this language in the prospectus:
    “If ike’s arrangements with GE do not result in a minimum amount of sales of GE branded products by the end of next year (31 December 2015) then either party may elect to terminate or renegotiate this relationship. Moreover, after 31 December 2015 the minimum royalty payments due to GE increase such that if ike does not significantly grow sales of GE branded products in later years, the per unit cost of the trademark license fee will increase – potentially materially (depending on the extent to which sales growth does or does not occur).”

    Spike sales
    While mapsight sales are bad, spikes are terrible. The prospectus stated that 2,533 units would be shipped including 381 sold on subscription. Including the subscription units (lowering estimated sales price), the average price assumed was $784 (~US$635). Removing the effects of subscription units, I’m guessing they thought they would be able to sell the units for US$700-US$800.
    On 28 October 2014, ike announced an ‘introductory price’ of US$619 per Spike, indicating this was a special introductory offer. The price today – 6 months later? US$499.
    The PFI said 2,533 units shipped – actual units shipped were 1,250 – that’s more than 50% down on PFI! What is worse – the prospectus states that “FY14A saw $0.9 million of Spike pre-orders that are projected to ship during FY15F and will be recognised as revenue in FY15F”.
    Ike go on to say that spike sales are expected to beat PFI of $2.91m in FY16. At US$500 per unit and NZDUSD of 0.80 – that would mean unit sales of at least 4,656 – a volume increase of ~270% on FY15, where sales were 50% down on PFI. That is pretty believable huh?

    OEM revenue (10% of FY16 revenue)
    FY16 revenue is likely to by $2.5m, exceeding PFI FY16 revenue of $1.47m. This is not good, in my opinion its an admission that the GE Mapsight sales are a failure, and the company is having to rely on selling at lower margin to other manufacturers. OEM revenue is not the basis on which investors (should have) invested. The company pays significant licensing fees to GE and issued US$1m of shares to them for the upfront license.

    Contract revenue (4% of FY16 revenue)
    Likely to be materially greater than nil in FY15 – well that’s hard isn’t it?

    This is about as disastrous an update as I have ever seen. Really shocked the price isn’t down substantially more than the 2% or so that it has moved.

    Not an investor – wouldn’t have touched with a barge pole – but some light should be shone on these little companies.

  9. #24
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    Can someone please help me out here? I think sales are down 30%-40% on forecast (note Ike has not stated how bad sales are down) and the shares are UP today 10% based on the 'good news' announcement here:

    https://www.nzx.com/companies/IKE/announcements/263678

    Does no one else see through this announcement and see how terrible it is?

  10. #25
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    Quote Originally Posted by Xirr View Post
    Can someone please help me out here?
    Does no one else see through this announcement and see how terrible it is?
    Maybe they were expecting it to be worse?

  11. #26
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    Well I was right in thinking sales would be down 30% to 40% on prospective forecasts. This level of miss is incredible, and they are sticking by their FY16 forecasts.

    In my opinion, they will be down 50%-70% on their FY16 forecasts.

    If the market actually reacted to this information properly, the share price would be somewhere between 20c and 30c - I have a real issue with brokers bringing these crap companies to market. You have to wonder how much of the money that got invested was by way of broker-controlled kiwisaver or other managed funds.
    Last edited by Xirr; 25-06-2015 at 11:30 AM.

  12. #27
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    Quote Originally Posted by Xirr View Post
    and they are sticking by their FY16 forecasts.
    That is so they can justify a 200% valuation gap!

  13. #28
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    Quote Originally Posted by Xirr View Post
    Can someone please help me out here?
    The moment I see something along the lines of "we would have met forecast if not for a timing issue where orders were delayed" I'm instantly turned off. This is a set up for a complete fail in the next financial year. I think it's just too tempting for a newly listed company to announce good news and hope they catch up to it. It just gets investor expectations completely out of whack.
    The cash burn scares me too.

  14. #29
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    Hi Guys,

    I'm involved in a privately owned tech business and keep a weather eye on this forum to see what's being said about tech stocks. I hadn't considered posting until a while back when I saw Xirr's post #23 damning IKE. I like IKE (sounds like a presidential campaign bumper sticker from back in the 50's) so was going to immediately jump to their defence. I registered but in the end didn't bother to post, in part because I thought it would be better to wait until they released their financial accounts. I got up early this morning to watch the end of the cricket only to find there was a rain delay, the weather's also turned crud, so between paying computer games put this together - great cricket game with the right end result, fabulous catch by the quicks!

    The one thing I strongly agreed with Xirr's was his comment "some light should be shone on these little companies". JamesST makes the same point in his post. The problem with these small cap companies is they are too small for the analysts to follow and there's little if any market supervision by the stock exchange. This means they can spin disaster into success through carefully crafted market releases with virtual impunity!

    I have followed IKE since well before they IPO'd and like what they are doing mainly because IMHO they're creating their own niche market by introducing a disruptive technology. IKE's a speculative risk, I don't owned any shares but am seriously considering buying.

    I had a quick look at their FY'15 accounts. They have around three years in reserves at the FY'15 burn rate so won't fall over anytime soon. I'm not an accountant but here's also the matter of the $0.5m invoiced and received but not booked to the revenue line whereas the costs were booked, unless they have offset it elsewhere it effectively makes the FY'15 result understated. I would give them another 6 months before making a more definitive call on their prospects going forward. The update for the 1st half of FY'16 should answer the question as to whether or not they were being upfront in their recent update.

    I particularly like that IKE didn't start by trying to conquer the world, their target market for Mapsight was the utilities niche where they already appear to have a first mover advantage and hopefully will become the defacto industry standard. Perhaps replicate AutoCAD on a much smaller scale, you can only hope?

    With a relatively expensive proprietary hardware Mapsight isn't targeting the consumer grade smart device market so they aren't going to sell a lot of this product into the bottom end of the SME market. On the flip side I can't see the smart device app developers successfully penetrating the utilities niche. While a small field service business might be happy to mobilise their field staff with relatively cheap consumer grade smart device, which inherently means there will be a lot misuse both from downloading non work related online content and actual physical damage to the devices, the utilities would prefer their staff to have proprietary ruggedized devices.

    If there's one thing I question about Mapsight it's the Windows Mobile 6.5 platform which is basically obsolete. I assume at some stage they will migrate Mapsight to another development platform.

    Moving onto Spike. Virtually every software developer is focusing on getting apps out for the consumer grade smart device market, with good reason. I think there is a big market for a cheaper version of IKE's technology so it will be interesting to see how Spike plays out particularly on the OE side. I would like to know a bit more about their patent applications as good IP protection is vital. Before buying any shares I will search their applications as part of my DD.

    In my view IKE is an early stage GTK (utilities and airports), or even a Vista (movie theatres), in terms of market positioning because they can anchor their early business growth on a relatively few cornerstone customers using Mapsight. The added benefit is they can also play in the smart device market with Spike.

    There was discussion in earlier posts comparing IKE to GEO in terms of investment opportunity. GEO released their unaudited FY'15 accounts late last week. Comparing IKE and GEO highlights to me why IKE is doing a lot right and GEO virtually nothing right, it's a train wreck about to happen. The key difference as we speak is IKE has around three years of cash in the bank at their current burn rate, GEO burning nearly as much cash on the back of less than a third the revenue has a few months at the most before running out of cash. The differences go a lot deeper, perhaps that's a topic for a second post if the weather doesn't improve?

  15. #30
    Xirr
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    Survfer I hate to break it to you but the ike device has been sold for many many years before the investment bankers got involved and packaged ike's device up as something 'new'. It never cracked it and never will. It was licensed with another high profile company.

    Ike should simply be a case study in how you can list any old crap at the moment.

    My previous analysis stands.

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