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PDH - Premier Diversified Holdings Inc.


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I know someone who founded a platform startup [can't disclose name, but it's now a public company] and seems to be making it work after a decade or so of a tough fight.  It is the type of business that absolutely needs scale and revenues are measured in basis points.  They ended up getting the scale and staying alive from merging with competitors / almost-competitors to gain scale that way.  Several deals.  He held on to the CEO role but was diluted a lot in the process.  Still a much better outcome than the alternative.  It's tough but if it looks like you won't get the scale you need in time, look at mergers to get it.  Not sure if there are any stand alone merger partners in this space as I don't know a whole lot about it.  Probably too early to know if they will need to get married to make it.

 

I doubt there is no market, but building a platform business is hard. You need scale of buyers and sellers at roughly the same time. Platform businesses are high risk high reward startups. If you succeed you've created a durable moat quality business. But if you don't reach scale, a platfom startup is likely a total loss.

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The other thing with platform businesses is there is a high threshold for establishing trust in the product or service you're offering. It takes a long time for people's attitudes to change from "that's crazy, I'm not paying to ride in some person's own car" to "just call an Uber". Trust in a new product or service takes a lot of legwork by the team involved and creating a great user experience. I tend to think there is a market for what Sequant is offering, it just takes time for new customers to trust in the product they're offering. Every platform's dream is to reach that inflection point where network effects come into play and growth takes off like a rocket ship, whether Sequant gets there or not is yet to be seen but most successful platform companies had a number of lean years before things came together.

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Not really. Sanjeev and his partner who traded russell shares for premier really took a hit. The only benefit is due to the stock falling in price, shareholders in premier benefited to the detriment of sanjeev and his partner. Russell management was exploring strategic options for the company. Read the circular that was sent out.

 

I bought a small position in Russell and then doubled down with a book value of $0.055. This has been a great investment and hopefully we get the full $0.085.

 

Just thinking about the Russell Brewing sale.  Would it be conceivable that Sanjeev pulled a Berk/3G type deal and found a partner to work with to take Russell private?

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I've taken only a quick look, but from what I saw it appeared revs from China essentially went to 0, and no mention of Sequant revenue, just a loss on that investment of approx $180k on the quarter.  There were a few words in the MD&A describing difficulties in China and the possibility that the China MRI ops could be disposed if poor conditions persist, and nothing on Sequant.  I would certainly appreciate some additional colour on those matters.  I have a token position but have been sitting on the sidelines until there's more clarity regarding the underlying businesses.

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Is this a dilution? 

Prasad must have seen great things for SequentRe to continue to put money in -- can't wait to see the annual letter.

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Regarding the letter Sanjeev, I agree with the others that more clarification about what's going one with the underlying businesses would be great. And if possible, what do you think about these businesses. Why did you invested in them in the beginning. It would help us clarify what is your investing framework.

 

Cheers!

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Regarding the letter Sanjeev, I agree with the others that more clarification about what's going one with the underlying businesses would be great. And if possible, what do you think about these businesses. Why did you invested in them in the beginning. It would help us clarify what is your investing framework.

 

Cheers!

 

+1

I agree with Partner24 and others that more clarity in AL in terms of mid term , long term objectives,  would be much appreciated.

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