"I expect the next round of funding to be a revenue sharing partnership or similar. " - I understand why you expect this as I expected it as well. However when asked the question about future funding Meir did not use the word partnership.
"I expect another $35m to be raised in some way. Another equity sale will be disappointing" - It would be disappointing, however once again if you listen to the message from the very first announcements Meir has stated that SAS came to the ASX at seed level. There are traditionally 5 stages of fund raising before an IPO, SAS went straight to IPO and will use credit raises until it reaches the point where it can raise debt funding. This has been re-iterated by Meir once again.
The problem is that there is no strong guidance coming from Meir. The message was clear pre-3D launch, it was all about the tech. Now post-launch it is all about evaluating the business strategy (long term funding included) and I do not feel that we or any potential partner or collaborator can see that.
I do not doubt the market exists on the IOT M2M front as the market is growing and the pie is big enough.
I do doubt the phone strategy at the moment, I thing the price point is good but it is hard to determine the re-sellers reach and determination to push it to market. With Thuraya I can see their XT-Hotspot being sold through multiple channels including the likes of amazon,AST ect.
I too would like to see a partnership, however I no longer see a partnership with one large telco eventuating. Think about, there is not one partner that operates around the whole equator. There are some that specialize on latin america, some that operate in Asia and some that operate in Africa. Investment does not make sense because the telcos in Africa would have no use for the constellation in Latin America for example. They don't have the customer, the contacts nor their own infrastructure for SAS to link up with.
So what I expect to see is more of the same that we see with GlobalSat Group (well hopefully at least), in that we will have a few major-but-regional clients and a lot of smaller clients. Meir did however get me thinking, he mentioned the word collaboration (maybe this is the same partnership) . What would collaboration look like and how does it benefit SAS in terms of funding?
To me the only collaborator that I can see is a company that produces the IOT devices themselves. If a company can produce a be-spoke solution of IOT devices that exclusively uses the SAS network then I think we are onto a winner.
- As examples SAS has had previous dealings with Flex (Previously flextronics) so could a bigger deal be in the making?
- Another example could be Ingenu and their RPMA connect sensors. A bonus is that Ingenu has Ivan Seidenberg (ex Verizon CEO ) on the board of directors. He is also on the board of directors for BlackRock and Parella Weinber Parners.
Fell free to rubbish these thoughts
