Tungsten Share Discussion Threads

[andrewdbl] 28/9/2017 15:38

imo the share price is a bit like a binary option between now and the earlier of 31/12 and the EBITDA B/E rns

a) fail or no RNS - share price falls to ~30 (?)
b) succeed - share price rises to ~80 (?)

so (if I am right) market says there is about a ~70% chance of success.
(30-65 = -35
80-65 = 15)

-in these febrile times I can see new lows being easily set if the mgt let us down.

imo, the major value of TUNG is the network and the client list, and see competancy rather than brilliance in the mgt, so failure is a sign a takeover is coming.

just my 0.123456789% opinion

[bs76] 28/9/2017 14:51

please buy few more.... take it to 70 :)

[edwardt] 28/9/2017 13:08

I still believe!

[dollarzpounds] 28/9/2017 12:36

Reasons behind the buy at this time edward?

[edwardt] 28/9/2017 12:02

my fault, I bought a few more this morning -so don't get carried away with the tick up in sp, bound to mean revert.

[edwardt] 27/9/2017 08:50

ejcj: At the capital markets day, they said that they had only offered discount financing to those invoices that have been authenticated by the buyers on ob10. There was little incentive for them to do that so they changed tack. They opened up the addressable market by studying the invoice patterns of the suppliers and allowing factoring for a wider universe. this coincided with creating tranches of low and high risk invoices, hence the new lending channels. surely this will have helped unblock the system?

[dollarzpounds] 26/9/2017 11:02

Well EJ there are dreams and there are dreams of course , I didn't think it was beyond the realms of fantasy when I bought in for Tungsten to have a market cap of £1bn given a 5-8 year timeframe anything over that was a bonus . I have been in about 3 years and have an average share price of just over 220p so , as you can see , at the time of investment it was not an outlandish 'dream' ? I do think Tungstens rating is extremely skinny and we deserve to be a treble figure SP, 100p is the short term goal . I do however have patience and from the positive notes of your last post am not giving up on it just yet . Thanks for your input , very informative and interesting .

[ejcj] 26/9/2017 10:13

It depends on what your dream was I suppose. The finance side is still growing and they were changing the offering. I imagine this includes widening the scope. They have a very experienced man at the helm. Look at the figures, they are financing so it's not as if no one is biting. I think if they can finance invoices not sent across the network then they've a real proposition there. Whether they are prepared to is another thing.
The invoicing side of the business is strong so I can see them focussing on this and going for solid growth. I don't see this is a bad plan. It's a bit unfair for them to be judged on the original hype.

[manics] 26/9/2017 07:46

ejcj: that could make sense from a few angles; perhaps in readiness/prep for a sale of the business?

[ejcj] 25/9/2017 23:09

The way I see it the financing is a numbers game and the product restricts the suppliers who can use it. I'd imagine this is a significant factor in why it hasn't got traction. You have to be sending invoices over the network so as an invoice finance business, the market is already limited. They will also only finance the invoices sent across the network. This means for a supplier any paper invoices sent to other customers have to be financed via another route. I'd also imagine a lot of suppliers already have an agreement with a finance provider. This probably covers all invoices so it seems unlikely a supplier will switch, considering they can only finance a fraction of their invoices. It seems like they have a small market to aim at. My gut feel is Tungsten will morph back into just an invoicing company. They are slashing costs to try and break even but are eating into the cash from the bank sale. It seems logical they will shrink and stick to what they know and are good at. After all, they have some blue-chip names and have done for some time.

[edwardt] 25/9/2017 14:04

put it another way: With Coupa and Basware on ev/revenue of 11 and 4 times is tung good value on 2 times? I have no idea about tradeshift but suspect it is on even higher valuation as per last funding round....

[dollarzpounds] 25/9/2017 11:46

EJCJ - You seem to know your onions ? What is your overall ' feel ' for the prospects of Tungsten going forward ?? The finance offering seems never to get off the ground so it's a battle on two fronts - fighting off the competition and trying to make some profit from the buyers/suppliers Tungsten DOES have ? Keep waiting for this to spark into life but it appears our bonfire is continually peed upon ??!

[ejcj] 25/9/2017 11:10

I wasn't trying to be negative. It's subjective as to whether Tradeshift is ahead but I was just trying to clarify a few points and maybe shed some light as to why they might be.

There are still concerns around Tungsten and rightly so. They have also lost Buyers, but then they all will. The worry is they aren't increasing their Buying network at the rate they were when OB10. Tradeshift seem to be so this has to be a worry.

If you read comments from others then there are question marks around the growth of the supplier network. In particular what services they are using and thus what revenue they will generate.

Turnover is inevitable and often needed but they have lost a lot of experienced staff. It seems some of their replacements aren't lasting too long either. This isn't uncommon but again is a worry if you're trying to battle with growing competition.

Saying all this, the board seem confident of breaking even.

[edwardt] 25/9/2017 10:40

hey that is great insight albeit I don't really like the implications of what you are saying! anyway, it can not be all that bad as they are not losing many buyers from the system? they are also renewing at higher £ so I will sit on my hands. Thanks though for your input it has lifted my limited knowledge for sure.

[ejcj] 22/9/2017 18:08

An open system allows third parties to integrate. Who can integrate and what they can do is still controlled. So Tradeshift is not allowing third-party developers to just changes code or workflows and impact the masses.

Tungsten also hasn't replaced their invoicing system for Salesforce, nor would they. What they have been trying to do is replace an internal system, used to manage the sales and onboarding process for suppliers, with Salesforce. However, they've had a contracting team on this for 2 years but haven't manage to deliver a working system and perhaps this highlights how Tradeshift, from a technical perspective, may have an advantage.

Tungsten inherited aging systems from OB10. Rather than invest, they spent most of their money on the finance platform. They also let all the historic staff go, leaving them with a lack of knowledge. Moving the systems forward has clearly been a difficult task. Saying this, the contracting team they were using has now been replaced, so perhaps this contributed to a lot of the delays.

On the invoice processing system, they are developing a replacement for this. It is likely it will provide all the benefits of a modern architected system. Developing any new system has it's problems though so this should be a step forward.

OB10 always focused on compliance and Tungsten continued with this under Edi. Compliance though isn't just about what the system does. A lot of it comes down to the expertise of staff and they've left too.

Back on point though, Tradeshift isn't ahead because it has an open system. Suppliers and buyers both integrate with Tungsten today. I'd say the main reason Tradeshift is ahead is because they can innovate and are flexible. Tungsten is in a transition period. They're trying to rebuild systems and knowledge, all at a time when they are trying cut costs.

[edwardt] 22/9/2017 12:51

I guess the ability of developers to mould systems and processes to their specific needs is a key benefit for early adoption with tradeshift. For me, the major defense for tung is compliance. How can you control an open source network developers can change things all the time? ultimately I am no techy but that surely has to be the main appeal. If i was a CFO I would want the rubber stamp that TUNG can theoretically give for cross border trade. I could be wrong.

[dollarzpounds] 22/9/2017 10:43

Whatever the case, are we saying Tungsten is on the wrong side of the open/closed business model ?? Truell was very wrong about it being essential to have a bank was he also wrong on insisting on a closed system ? By standing still we are going backwards another decade and the competition will have won out !

[manics] 22/9/2017 10:11

You probably already know this -open source allows developers to write their own apps & features around the platform to perform whatever tasks their business might want. With closed/Tungsten, what you see is what you get.

It's perhaps fairer then to say TradeShift is easier to get it to do exactly what you want (rather than just saying it's easier to use) imo.

[edwardt] 22/9/2017 08:32

so why is tradeshift winning? I am told it is because it is open source so easy to use for suppliers and buyers. tungsten is a closed system. I kind of understand the difference but anyone better informed can explain the difference. I recall the ob10 operating systems were moved to salesforce but was that more crm or actually the invoice processing part in total?

any techies out there help this luddite out?

[1gw] 20/9/2017 15:10

That's me out at 62p. Somehow couldn't really get very (or perhaps at all) emotionally attached to this particular investment so decided it was time to move on. Not that emotions should play a strong part in investment choice, but I do like to feel that I share some of the excitement of management in seeing progress in the business.

[andrewdbl] 15/9/2017 09:34

Basically if they know they cannot, they have to issue an RNS.

"Tungsten will announce its Interim Results for the six months ended 31 October 2017 on 14 December 2017."

So, we have to wait for the big reveal - Like the next series of game of thrones, but with less dragons.

The income growth is gratifying, but expected income to 30/04/18 is 36.3m and

"We continue to expect to spend less than £40 million in operating expenses during the year, excluding one-off restructuring costs of approximately £2 million."

so there will bt an ~8m loss to 30/04/18 (?) - happily there is ~17m in cash - so no need to raise there.

"our targets remain constant currency revenue growth in excess of 15%"

so for y/e 30/04/19
36.3 * 1.15 = 41.7 (broker est is 45)
41.7 - 40 = 1.7 (+!!!)

i.e. a profit, but hardly world-changing - which I suppose is reflected in a share price of ~60p

[1gw] 15/9/2017 09:16

I think that low bar helps! Having not really expected to see positive news on adjusted EBITDA breakeven, I was quite relieved to see that the end-year target was still there, even if the "challenging" word suggests it's by no means in the bank yet.

[edwardt] 15/9/2017 08:51

well i read that and had a warm feeling about tungsten which ain't happened in a long while! progress!

[manics] 15/9/2017 07:07

"In July 2016, we set ourselves the challenging goal of achieving monthly EBITDA breakeven by the end of this calendar year. This remains our goal..."

-no money shot today, guys.