Pci-pal Share Discussion Threads

[adamb1978] 06/2/2024 21:47

Not sure about that at all Nickelmer. PCIP's price never got to crazy levels for a SaaS business and today is still at c.2x ARR.

Given PCIP's churn is so low (3%) then all the ARR wins are incremental to the top-line and with mainly re-selling via partners they dont need to scale sales & marketing costs like crazy.

They just need to get the court stuff out of the way - there's enough investors which won't look at PCIP because of that, and therefore the price risks drifting. Look what happened after the UK win - the share price shot up...only to come off again once the appeal was announced

[nickelmer] 06/2/2024 19:04

I think the problem for PCIPAL is now the same as it was some time ago for its competitor Eckoh, ECK's share price rose to ridiculous levels based on its future profit potential, and once it started announcing actual profits the market could see the potential had not been realised at that stage and the price fell substantially. PCIPAL are at the future profit potential stage and as soon as they reveal actual profits, if they are not what was expected, the price will fall to a true value, hence I suspect in part the market's reaction to today's announcement

[adamb1978] 06/2/2024 09:31

Just a sign of current markets, plus the legal case meaning that some buyers are put off and the share price just meanders on low volume.

Once the appeal is out of the way I think we'll see more life again

[this_is_me] 06/2/2024 09:26

Disappointing reaction to a very positive update.

[adamb1978] 06/2/2024 08:35

Court cases always are.

As above, I dont think its a disaster. With small caps valuations where they are, PCIP would be a sitting duck without this.

PCIP should be nicely profitable this time next year, and the court shenanigans doesnt seem to be stopping them winning new customers!

[checkers2] 06/2/2024 08:33

Patent Case Update

"Sycurio is appealing the verdicts. The US litigation continues with the trial now scheduled for February 2025"

February 2025 - is that a typo? Otherwise it is becoming very drawn out...

[adamb1978] 06/2/2024 08:13

Yes, good statement, delivering on promises as they always do.

Should break-even at the bottom line in the current 6 month period too.

The patent case in the US moving out to Feb 2025 I dont see as a disaster I think PCIP would be vulnerable to offers to acquire them without the patent stuff, however that being in the background prevents an offer from private equity until H1 next year, by which time PCIP should be nicely profitable which would push the price up.

The price here should be substantially higher in 12-24 months

[this_is_me] 06/2/2024 07:19

Key milestone achieved: "... first reported period of positive EBITDA since its re-launch as PCI Pal in 2016"

[andre] 30/1/2024 15:09

I agree. And then to add if you are confident. They just saved you a few percent.

[adamb1978] 30/1/2024 13:17

See post 974 re rationale

[andre] 30/1/2024 12:50

What else were they going to say. The lawyers are getting paid to try to win. Whether they are bluffing or not, it trashes their competitors share price. Once again though the LSE lets itself down. A bunch of sells days before the news is released. Quelle surprise.

[adamb1978] 30/1/2024 12:21

Annoying that the share price has come off. We had a year or two of the shares just drifting - effectively being suspended - whilst the court process moved though. Lots of investors not looking at it because of the case, and volumes being very low.

Now we get them appealing and feels like we are heading back there too.

Upside is that it didnt seem to have the slightest impact on the business before, with PCIP constantly knocking it out of the park and strong growth continuing.

So that and the initial court win saying both that Sycurio's patents should be invalidated and that even if they didnt, PCIP didnt infringe, should both mean that the share price doesnt drift as much as before the court hearing.

However it feels like getting to cashflow positive (H1 to Dec-23) and profitability (this half, to Jun-23) might not be properly reflected in the price til we get through the appeal.

Bit frustrating...

[this_is_me] 29/1/2024 15:15

They seem to be whistling loudly in the dark.

[adamb1978] 27/1/2024 14:49

Yes, a few rationales for their action:

- upside vs downside: maybe they think that incremental costs are say £500k given lots of the work will already have been done, but if they win they'll get off paying PCIP's £1m costs, get their costs refunded (£2m?), damages awarded (few million?)...so even if was a 5%-10% chance of winning, you can probably justify it on a probability weight basis

- impact on PCIP business as usual: maybe trying to trash PCIP and stop them competing as effectively? Drain PCIP's cash resources and further delay their move into Cont EUrope?

- share price: we know that they launched the initial stuff which hammered PCIP's share price...and then Sycurio approached PCIP with an offer. You dont have to be massively cynical to believe that the legal action could have been with the intention of then trying to acquire PCIP. Perhaps they're trying to same trick again? Hard for it to work this time given people will be less believing that PCIP will lose...

I'm not massively concerned about this appeal given that for it to hit PCIP they have to:
1) convince the court that their patents should not be invalidated
2) prove that PCIP infringed.

So its a double hurdle to overcome...and each hurdle a previous judge founded against them. Is each a 10%-20% chance? Perhaps...so to get over both, its a 1%-4% chance.

And even if the 1%-4% chance occurs, PCIP have a workaround.

Really is noise IMO

[this_is_me] 26/1/2024 19:12

They have decided to keep digging despite the large hole they are in.

[adamb1978] 26/1/2024 16:27

Thats annoying. Hopefully only annoying given that the trial seems quite comprehensive....plus also the patent case doesnt seem to have slowed PCIP down.

[andre] 26/1/2024 16:18

Spoke too soon.

[andre] 25/1/2024 19:31

A few big sells today and no drop. Strange.

[adamb1978] 03/1/2024 14:35

hi Andre

Well, we had the news before Christmas so its not been too long!

It feels like the US case is in a much better position now given the read across from the UK case. In a worst case where they lost in the US, they will have only generated £16m revenues in the US by Jun-24 so damages would be based on that. If you look at a 5% royalty rate that they 'should' have paid £800k to Sycurio then perhaps double that for damages plus Sycurio's costs (say £2m?) then they might be in for £3.6m? Given the £1m costs which PCIP are getting back from Sycurio plus the bank facility and being cash flow positive, they'd be able to finance it, even though you'd prefer that they don't lose!!

Adam

[andre] 03/1/2024 13:56

Very quiet here without news. And any news we are going to get is likely to be good. Good progress. Winning the legal cases. Value of costs. Growing user base and heading for greater profitability. US case should follow the UK one. Although you never know with Americans and patents tbf.

[this_is_me] 27/12/2023 19:13

Share price still on the up.

[this_is_me] 20/12/2023 09:37

The final figure for costs is going to be bigger than that.

[adamb1978] 20/12/2023 07:57

£1.06m. As er my post yesterday, the lack of right to appeal is more valuable than the money I believe but an extra million is nice. Will help accelerate their growth and dispel any nonsense comments about their cash balance

[adamb1978] 19/12/2023 19:09

It would cost a buyer far more than 100p!

[snoopmony] 19/12/2023 17:04

with Sycurio's third takeover bid of 90p rejected, could defiantly see a takeover soon, hopefully £1+