PAR - PAR Technology Corporation

[whatdadil9]

Anyone looked at this?

 

ADW just filed in it.

 

They had some interesting commentary on the last qtrs. conference call....seems very assymetric.

[KJP]

Yes.  As usual, I sold too soon, largely because of concerns about management.  There's a VIC writeup about it from 2016 that hits the highlights.   

[Foreign Tuffett]

Anyone looked at this?

 

ADW just filed in it.

 

They had some interesting commentary on the last qtrs. conference call....seems very assymetric.

 

Can you elaborate on what seems "assymetric" here? Also, is the 2nd "s" an understated commentary on management's abilities (or lack thereof)?

[wisowis]

Voss Capital is a big investor in this (owns ~7% of the company). They do value investing in the software space - see Southpaw's posts on the board.

 

Here is the long thesis that they posted on their twitter last year - "PAR: A Framework for $30". Attached.

PAR_Path_to_$30_Plus_-_September_28th_2017.pdf

[whatdadil9]

I think the VOSS analysis applies roughly as it relates to unit count ( perhaps is conservative).

 

I think what they miss that ADW points out on the call is payments. Toast their closest competitor has a 100 pct capture rate on payments. Given Par is tilted towards enterprise its unlikely they get a 100 pct capture rate but 50 pct is not unreasonable.

 

If PAR has 30k boxes in 2020 at 1.5mm of AUV thats 45bn of transaction value. Say they get 22.5bn of it and make 50 bps NET that's almost 120 mm of EBITDA in payments....Put a 10x multiple on that and its 1.2bn alone.

 

SAAS at 30k units is 60m assuming no additional modules or ARPU growth... 60mm of SAAS at 10x is worth 600mm. Public market multiples for those growth rates prob render higher.

 

Govt is probably worth 100 ( alot of corp allocation making results look lower than are)

 

Hardware has a good amount of WC and prob could be liscenced to Asia. I think we could take 75mm out of that biz. You will also sitll have the liscencing, support and maintenance revenue. Not sure what that is woth.

 

Surecheck prob worth 20

 

RE prob worth 20-30.

 

If you add up all the legacy businesses you get to the company's existing market cap --- ascribing zero value to brink / payments which are enormous...

 

 

[KJP]

I think the VOSS analysis applies roughly as it relates to unit count ( perhaps is conservative).

 

I think what they miss that ADW points out on the call is payments. Toast their closest competitor has a 100 pct capture rate on payments. Given Par is tilted towards enterprise its unlikely they get a 100 pct capture rate but 50 pct is not unreasonable.

 

If PAR has 30k boxes in 2020 at 1.5mm of AUV thats 45bn of transaction value. Say they get 22.5bn of it and make 50 bps NET that's almost 120 mm of EBITDA in payments....Put a 10x multiple on that and its 1.2bn alone.

 

SAAS at 30k units is 60m assuming no additional modules or ARPU growth... 60mm of SAAS at 10x is worth 600mm. Public market multiples for those growth rates prob render higher.

 

Govt is probably worth 100 ( alot of corp allocation making results look lower than are)

 

Hardware has a good amount of WC and prob could be liscenced to Asia. I think we could take 75mm out of that biz. You will also sitll have the liscencing, support and maintenance revenue. Not sure what that is woth.

 

Surecheck prob worth 20

 

RE prob worth 20-30.

 

If you add up all the legacy businesses you get to the company's existing market cap --- ascribing zero value to brink / payments which are enormous...

 

Adam Wyden drilled home many of these points to management in the latest call.  It's not clear they understand his point about how raising capital at the Brink level may be the best way to fund the business or, more broadly, that they're in a land grab situation so more capital now could be very valuable long term. 

 

Transcript here:  https://seekingalpha.com/article/4198254-par-technology-corporation-par-ceo-donald-foley-q2-2018-results-earnings-call-transcript?part=single

[wisowis]

I think the VOSS analysis applies roughly as it relates to unit count ( perhaps is conservative).

 

I think what they miss that ADW points out on the call is payments. Toast their closest competitor has a 100 pct capture rate on payments. Given Par is tilted towards enterprise its unlikely they get a 100 pct capture rate but 50 pct is not unreasonable.

 

If PAR has 30k boxes in 2020 at 1.5mm of AUV thats 45bn of transaction value. Say they get 22.5bn of it and make 50 bps NET that's almost 120 mm of EBITDA in payments....Put a 10x multiple on that and its 1.2bn alone.

 

SAAS at 30k units is 60m assuming no additional modules or ARPU growth... 60mm of SAAS at 10x is worth 600mm. Public market multiples for those growth rates prob render higher.

 

Govt is probably worth 100 ( alot of corp allocation making results look lower than are)

 

Hardware has a good amount of WC and prob could be liscenced to Asia. I think we could take 75mm out of that biz. You will also sitll have the liscencing, support and maintenance revenue. Not sure what that is woth.

 

Surecheck prob worth 20

 

RE prob worth 20-30.

 

If you add up all the legacy businesses you get to the company's existing market cap --- ascribing zero value to brink / payments which are enormous...

 

Adam Wyden drilled home many of these points to management in the latest call.  It's not clear they understand his point about how raising capital at the Brink level may be the best way to fund the business or, more broadly, that they're in a land grab situation so more capital now could be very valuable long term. 

 

Transcript here:  https://seekingalpha.com/article/4198254-par-technology-corporation-par-ceo-donald-foley-q2-2018-results-earnings-call-transcript?part=single

 

Just listened to the call, and wow, Adam really spent a lot of time and effort in driving that point home. I am worried that his understanding and vision of the company sounded more articulate than management's. Several times, management just responded with "we hear ya".

 

 

[walkie518]

I think the VOSS analysis applies roughly as it relates to unit count ( perhaps is conservative).

 

I think what they miss that ADW points out on the call is payments. Toast their closest competitor has a 100 pct capture rate on payments. Given Par is tilted towards enterprise its unlikely they get a 100 pct capture rate but 50 pct is not unreasonable.

 

If PAR has 30k boxes in 2020 at 1.5mm of AUV thats 45bn of transaction value. Say they get 22.5bn of it and make 50 bps NET that's almost 120 mm of EBITDA in payments....Put a 10x multiple on that and its 1.2bn alone.

 

SAAS at 30k units is 60m assuming no additional modules or ARPU growth... 60mm of SAAS at 10x is worth 600mm. Public market multiples for those growth rates prob render higher.

 

Govt is probably worth 100 ( alot of corp allocation making results look lower than are)

 

Hardware has a good amount of WC and prob could be liscenced to Asia. I think we could take 75mm out of that biz. You will also sitll have the liscencing, support and maintenance revenue. Not sure what that is woth.

 

Surecheck prob worth 20

 

RE prob worth 20-30.

 

If you add up all the legacy businesses you get to the company's existing market cap --- ascribing zero value to brink / payments which are enormous...

 

Adam Wyden drilled home many of these points to management in the latest call.  It's not clear they understand his point about how raising capital at the Brink level may be the best way to fund the business or, more broadly, that they're in a land grab situation so more capital now could be very valuable long term. 

 

Transcript here:  https://seekingalpha.com/article/4198254-par-technology-corporation-par-ceo-donald-foley-q2-2018-results-earnings-call-transcript?part=single

 

Just listened to the call, and wow, Adam really spent a lot of time and effort in driving that point home. I am worried that his understanding and vision of the company sounded more articulate than management's. Several times, management just responded with "we hear ya".

 

they seemed to do that on the last call as well

 

ADW appears to have filed a 13D

https://www.sec.gov/Archives/edgar/data/708821/000138713118003839/0001387131-18-003839-index.htm

 

[wisowis]

ADW and Voss Capital have now both publicly called for the company to be sold. Combined they own ~18% of the company (?)

 

ADW letter: https://www.prnewswire.com/news-releases/adw-capital-seeks-strategic-alternatives-process-to-pursue-immediate-sale-of-par-technology-300729472.html

Voss letter: https://mma.prnewswire.com/media/769201/Voss_ADW_Letter.pdf

 

The ADW letter is particularly scathing.

[walkie518]

ADW and Voss Capital have now both publicly called for the company to be sold. Combined they own ~18% of the company (?)

 

ADW letter: https://www.prnewswire.com/news-releases/adw-capital-seeks-strategic-alternatives-process-to-pursue-immediate-sale-of-par-technology-300729472.html

Voss letter: https://mma.prnewswire.com/media/769201/Voss_ADW_Letter.pdf

 

The ADW letter is particularly scathing.

To be fair, I'm not sure why mgmt is so hesitant to the idea...every conf call they say, "we understand," but do not seem to budge in any direction. 

 

Splitting the businesses apart makes a lot of sense considering where public markets are trading...though I don't understand why the market is so negative on the stock when there is so much underlying value and there is attention...maybe ADW and Voss are simply not well known enough

[DamienC]

https://www.sec.gov/Archives/edgar/data/708821/000114036118041403/s002470x1_s3.htm

 

Some people can't accept being wrong! Why can't they just accept Adam's proposals?

[walkie518]

https://www.sec.gov/Archives/edgar/data/708821/000114036118041403/s002470x1_s3.htm

 

Some people can't accept being wrong! Why can't they just accept Adam's proposals?

just astounding... are they doing this on purpose?  what's the underlying value of this transaction? 

 

maybe it's all preferred? 

[wisowis]

Hey all -- sorry, I am still wet behind the ears, could someone confirm that this is normal language? Or are they deliberately putting in measures to screw over shareholders?

 

Anti-Takeover Effects of Delaware Law, Our Certificate of Incorporation, as Amended and Our Bylaws, as Amended

 

Certain provisions of Delaware law and our Certificate of Incorporation and Bylaws could make the acquisition of the Company more difficult.  These provisions of the General Corporation Law of the State of Delaware (the “DGCL”) could prohibit or delay mergers or other takeover or change in control attempts and, accordingly, may discourage attempts to acquire us.  These provisions, summarized below, are expected to discourage certain types of coercive takeover practices and inadequate takeover bids and are designed to encourage persons seeking to acquire control of us to negotiate with our board of directors.

 

Stockholder meetings.  Under our Certificate of Incorporation, only the board of directors, or the chairman of the board of directors or the president pursuant to a resolution approved by a majority of the then authorized number of directors of the Company may call special meetings of stockholders.

 

Requirements for advance notification of stockholder nominations and proposals.  Our Bylaws establish advance notice procedures with respect to stockholder proposals and the nomination of candidates for election as directors.

 

Action by written consent.  Pursuant to our Certificate of Incorporation, any action required or permitted to be taken by the stockholders of the Company must be effected at an annual or special meeting of stockholders of the Company, and no action required to be taken or that may be taken at any annual or special meeting of stockholders of the Company may be taken without a meeting except by the unanimous written consent of all stockholders entitled to vote on such action.

 

Election and removal of directors.  Nominations for the election of directors may be made by the board of directors or a committee appointed by the board of directors, or by any stockholder entitled to vote generally in the election of directors who complies with the procedures set forth in our Bylaws.  All directors (other than those who may be elected by the holders of any then outstanding preferred stock, voting as a separate class) shall be elected for a one-year term expiring at the next annual meeting of stockholders.  Each director shall serve until his or her successor is duly elected and qualified or until his or her death, resignation, or removal. The board of directors has the exclusive right to increase or decrease the size of the board, provided such number will not be less than a minimum of three and more than a maximum of fifteen.Vacancies and newly created directorships resulting from any increase in the authorized number of directors, and any vacancies on the board of directors resulting from death, resignation, disqualification, removal or other cause shall be filled by the affirmative vote of a majority of the remaining directors then in office, even if less than a quorum of the board of directors, or by a sole remaining director, and the directors so chosen shall hold office, subject to the limitations set forth in the Bylaws, until the next annual meeting and until their respective successors are elected and qualified.  Subject to the rights of the holders of any then outstanding preferred stock any director may be removed from office, with or without cause, by the affirmative vote of the holders of a majority of the voting power of all shares of the Company entitled to vote generally in the election of directors, voting together as a single class. This system of electing directors may discourage a third‑party from making a tender offer or otherwise attempting to obtain control of us, because it generally makes replacing a majority of directors more difficult for stockholders.

 

Undesignated preferred stock.  The authorization of undesignated preferred stock makes it possible for the board of directors, without stockholder approval, to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to obtain control of us.  These and other provisions may have the effect of deterring hostile takeovers or delaying changes in control or management of the Company.

 

Amendment of provisions in the Certificate of Incorporation. The affirmative vote of the holders of at least 66 2/3% of all of the shares of the Company entitled to vote generally in the election of directors, voting together as a single class, is required to amend the provisions of our Certificate of Incorporation relating to calling special meetings of stockholders, stockholder actions by written consent, the number and election of directors, and director liability.

 

[walkie518]

Hey all -- sorry, I am still wet behind the ears, could someone confirm that this is normal language? Or are they deliberately putting in measures to screw over shareholders?

 

Anti-Takeover Effects of Delaware Law, Our Certificate of Incorporation, as Amended and Our Bylaws, as Amended

 

Certain provisions of Delaware law and our Certificate of Incorporation and Bylaws could make the acquisition of the Company more difficult.  These provisions of the General Corporation Law of the State of Delaware (the “DGCL”) could prohibit or delay mergers or other takeover or change in control attempts and, accordingly, may discourage attempts to acquire us.  These provisions, summarized below, are expected to discourage certain types of coercive takeover practices and inadequate takeover bids and are designed to encourage persons seeking to acquire control of us to negotiate with our board of directors.

 

Stockholder meetings.  Under our Certificate of Incorporation, only the board of directors, or the chairman of the board of directors or the president pursuant to a resolution approved by a majority of the then authorized number of directors of the Company may call special meetings of stockholders.

 

Requirements for advance notification of stockholder nominations and proposals.  Our Bylaws establish advance notice procedures with respect to stockholder proposals and the nomination of candidates for election as directors.

 

Action by written consent.  Pursuant to our Certificate of Incorporation, any action required or permitted to be taken by the stockholders of the Company must be effected at an annual or special meeting of stockholders of the Company, and no action required to be taken or that may be taken at any annual or special meeting of stockholders of the Company may be taken without a meeting except by the unanimous written consent of all stockholders entitled to vote on such action.

 

Election and removal of directors.  Nominations for the election of directors may be made by the board of directors or a committee appointed by the board of directors, or by any stockholder entitled to vote generally in the election of directors who complies with the procedures set forth in our Bylaws.  All directors (other than those who may be elected by the holders of any then outstanding preferred stock, voting as a separate class) shall be elected for a one-year term expiring at the next annual meeting of stockholders.  Each director shall serve until his or her successor is duly elected and qualified or until his or her death, resignation, or removal. The board of directors has the exclusive right to increase or decrease the size of the board, provided such number will not be less than a minimum of three and more than a maximum of fifteen.Vacancies and newly created directorships resulting from any increase in the authorized number of directors, and any vacancies on the board of directors resulting from death, resignation, disqualification, removal or other cause shall be filled by the affirmative vote of a majority of the remaining directors then in office, even if less than a quorum of the board of directors, or by a sole remaining director, and the directors so chosen shall hold office, subject to the limitations set forth in the Bylaws, until the next annual meeting and until their respective successors are elected and qualified.  Subject to the rights of the holders of any then outstanding preferred stock any director may be removed from office, with or without cause, by the affirmative vote of the holders of a majority of the voting power of all shares of the Company entitled to vote generally in the election of directors, voting together as a single class. This system of electing directors may discourage a third‑party from making a tender offer or otherwise attempting to obtain control of us, because it generally makes replacing a majority of directors more difficult for stockholders.

 

Undesignated preferred stock.  The authorization of undesignated preferred stock makes it possible for the board of directors, without stockholder approval, to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to obtain control of us.  These and other provisions may have the effect of deterring hostile takeovers or delaying changes in control or management of the Company.

 

Amendment of provisions in the Certificate of Incorporation. The affirmative vote of the holders of at least 66 2/3% of all of the shares of the Company entitled to vote generally in the election of directors, voting together as a single class, is required to amend the provisions of our Certificate of Incorporation relating to calling special meetings of stockholders, stockholder actions by written consent, the number and election of directors, and director liability.

 

Mgmt doesn't want to get fired...likely it gets ugly

 

[wisowis]

ADW Capital has released a second letter to PAR management in response to their S-3: https://www.prnewswire.com/news-releases/adw-capital-seeks-immediate-sale-of-par-technology-300740825.html

[wisowis]

Donald Foley stepping down as CEO, Savneet Singh named interim CEO: https://www.businesswire.com/news/home/20181206005901/en/

 

Great news for shareholders. I recall listening to Savneet Singh's interview on Patrick O’Shaughnessy's podcast: http://investorfieldguide.com/savneet/

 

PAR Technology Corporation (NYSE:PAR) (the “Company”) announced today that Savneet Singh, a member of the Company’s Board of Directors since April 2018, has been appointed Interim Chief Executive Officer (“CEO”) and President of the Company, effective December 4, 2018. The Company also announced that Dr. Donald H. Foley has stepped-down as CEO and President, and as a director of the Company. The Board’s Nominating and Corporate Governance Committee has initiated a search process to identify a permanent CEO and has retained a leading executive search firm to assist in its efforts.

 

Mr. Singh is a partner of CoVenture, LLC, a multi-asset manager with funds in venture capital, direct lending, and crypto currency. He has served as a partner of CoVenture since June 2018. From 2017 – 2018, Mr. Singh served as the managing partner of Tera-Holdings, Inc., a holding company of niche software businesses that he co-founded. In 2009, Mr. Singh co-founded GBI, LLC (f/k/a Gold Bullion International, LLC (GBI)), an electronic platform that allows investors to buy, trade and store physical precious metals. During his tenure at GBI, from 2009 – 2017, Mr. Singh served as GBI’s chief operating officer, its chief executive officer, and its president. In 2018, Mr. Singh joined the board of directors of Blockchain Power Trust (TSXV: BPWR.UN; TEP.DB); he also serves on the boards of directors of LottoGopher Holdings, LLC, Produce Pay, Inc. and EcoLogic Solutions, Inc.

 

On behalf of the Board, Cynthia Russo, Lead Independent Director, commented, “Don helped guide the Company through a period of significant transition and development. We thank Don for his service. Looking ahead, the search to identify a permanent CEO is well underway and we will work diligently to identify the best candidate to lead the Company and drive stockholder value. We are pleased to have an executive of Savneet’s caliber lead the Company during this interim period and expect his technology and business experience will ensure a smooth transition period.”

 

Mr. Singh commented, “I am looking forward to working closely with the Board and management team to move the Company forward during this transition period.”

 

 

[walkie518]

Donald Foley stepping down as CEO, Savneet Singh named interim CEO: https://www.businesswire.com/news/home/20181206005901/en/

 

Great news for shareholders. I recall listening to Savneet Singh's interview on Patrick O’Shaughnessy's podcast: http://investorfieldguide.com/savneet/

 

PAR Technology Corporation (NYSE:PAR) (the “Company”) announced today that Savneet Singh, a member of the Company’s Board of Directors since April 2018, has been appointed Interim Chief Executive Officer (“CEO”) and President of the Company, effective December 4, 2018. The Company also announced that Dr. Donald H. Foley has stepped-down as CEO and President, and as a director of the Company. The Board’s Nominating and Corporate Governance Committee has initiated a search process to identify a permanent CEO and has retained a leading executive search firm to assist in its efforts.

 

Mr. Singh is a partner of CoVenture, LLC, a multi-asset manager with funds in venture capital, direct lending, and crypto currency. He has served as a partner of CoVenture since June 2018. From 2017 – 2018, Mr. Singh served as the managing partner of Tera-Holdings, Inc., a holding company of niche software businesses that he co-founded. In 2009, Mr. Singh co-founded GBI, LLC (f/k/a Gold Bullion International, LLC (GBI)), an electronic platform that allows investors to buy, trade and store physical precious metals. During his tenure at GBI, from 2009 – 2017, Mr. Singh served as GBI’s chief operating officer, its chief executive officer, and its president. In 2018, Mr. Singh joined the board of directors of Blockchain Power Trust (TSXV: BPWR.UN; TEP.DB); he also serves on the boards of directors of LottoGopher Holdings, LLC, Produce Pay, Inc. and EcoLogic Solutions, Inc.

 

On behalf of the Board, Cynthia Russo, Lead Independent Director, commented, “Don helped guide the Company through a period of significant transition and development. We thank Don for his service. Looking ahead, the search to identify a permanent CEO is well underway and we will work diligently to identify the best candidate to lead the Company and drive stockholder value. We are pleased to have an executive of Savneet’s caliber lead the Company during this interim period and expect his technology and business experience will ensure a smooth transition period.”

 

Mr. Singh commented, “I am looking forward to working closely with the Board and management team to move the Company forward during this transition period.”

this is a fabulous development...

 

 

[peterHK]

What can ADW really do? I've spoken with Adam and he's sharp, takes big positions, and is loud about them, but I've yet to see him actually affect any change anywhere, especially when dealing with a founder.

 

I find the whole thing odd. We have an activist saying that Brink is worth $2 billion in 2020 (3x the share price today), but that same activist wants to have the company sold today? Why would you do that? What PE firm looking for a bargain is going to give you say a 100% premium today to make this worthwhile?

 

We have another firm saying that shares are at least worth $30, but what PE firm is going to want to pay fair value for the assets? I'd see a buyout at $25 maybe, but that's 30% upside for me as a shareholder coupled to a company with no EBITDA, low gross margins, etc. Don't see how that's so asymmetric.

 

If it were me, I'd be asking for new management and a new board, and get some smart people on it who can build this business.

 

[walkie518]

What can ADW really do? I've spoken with Adam and he's sharp, takes big positions, and is loud about them, but I've yet to see him actually affect any change anywhere, especially when dealing with a founder.

 

I find the whole thing odd. We have an activist saying that Brink is worth $2 billion in 2020 (3x the share price today), but that same activist wants to have the company sold today? Why would you do that? What PE firm looking for a bargain is going to give you say a 100% premium today to make this worthwhile?

 

We have another firm saying that shares are at least worth $30, but what PE firm is going to want to pay fair value for the assets? I'd see a buyout at $25 maybe, but that's 30% upside for me as a shareholder coupled to a company with no EBITDA, low gross margins, etc. Don't see how that's so asymmetric.

 

If it were me, I'd be asking for new management and a new board, and get some smart people on it who can build this business.

you don't think Singh fits the bill?

 

or do you see his appointment as a means to effect that change? 

[peterHK]

What can ADW really do? I've spoken with Adam and he's sharp, takes big positions, and is loud about them, but I've yet to see him actually affect any change anywhere, especially when dealing with a founder.

 

I find the whole thing odd. We have an activist saying that Brink is worth $2 billion in 2020 (3x the share price today), but that same activist wants to have the company sold today? Why would you do that? What PE firm looking for a bargain is going to give you say a 100% premium today to make this worthwhile?

 

We have another firm saying that shares are at least worth $30, but what PE firm is going to want to pay fair value for the assets? I'd see a buyout at $25 maybe, but that's 30% upside for me as a shareholder coupled to a company with no EBITDA, low gross margins, etc. Don't see how that's so asymmetric.

 

If it were me, I'd be asking for new management and a new board, and get some smart people on it who can build this business.

you don't think Singh fits the bill?

 

or do you see his appointment as a means to effect that change?

 

He is a temporary CEO.

[walkie518]

What can ADW really do? I've spoken with Adam and he's sharp, takes big positions, and is loud about them, but I've yet to see him actually affect any change anywhere, especially when dealing with a founder.

 

I find the whole thing odd. We have an activist saying that Brink is worth $2 billion in 2020 (3x the share price today), but that same activist wants to have the company sold today? Why would you do that? What PE firm looking for a bargain is going to give you say a 100% premium today to make this worthwhile?

 

We have another firm saying that shares are at least worth $30, but what PE firm is going to want to pay fair value for the assets? I'd see a buyout at $25 maybe, but that's 30% upside for me as a shareholder coupled to a company with no EBITDA, low gross margins, etc. Don't see how that's so asymmetric.

 

If it were me, I'd be asking for new management and a new board, and get some smart people on it who can build this business.

you don't think Singh fits the bill?

 

or do you see his appointment as a means to effect that change?

 

He is a temporary CEO.

 

I don't think that makes a difference?

 

Singh was on the board and has experience building.  Even if it's temporary, he will see through the first fund raise and finding his replacement. 

[wisowis]

Market isn't happy they are offering $70 million in convertible notes: https://www.businesswire.com/news/home/20190410005919/en/PAR-Technology-Corporation-Announces-Pricing-70-Million/

 

I listened to their 2018 year-end conference call and thought it was good: https://edge.media-server.com/m6/p/8kidrzre

 

Savneet talks about capital allocation, incentives, etc. Andrew from ADW Capital asks some questions after noting "...this [conference call] is going a lot different [better] than the last one."

[tripleoptician]

I bought more today

 

Been a holder of this company since Voss Capital wrote it up about 2 years ago.

I pared back on the holding once old management (Foley/Sammons) looked like they were going to underfund the Brink opportunity. They ducked out of a conference call having Q and A for having to deal with Wyden asking legitimate questions on their poor capital allocation decisions and not sourcing more capital to speed up the Brink transition.

 

Savneet not only had a good conference call, his background IS SAAS and optimizing capital allocation. His mindset appears quite focused on why Saas/sticky costumer products are one of the optimal businesses to run.

I think this convertible debt deal is a good move because it allows adequate capital to fund the transition to on-board big Tier 1 players onto Brink POS. There is no way to take on a huge # of franchises from a Tier 1 when your staffing for the transition is suboptimal and takes 2-3 years to process them.

 

Once a Tier 1 has picked Brink, they won’t be changing their POS again unless it is woefully underperforming. All signs point to Brink being an above average product with Tier 1 relationships from its legacy hardware business and operating on a PC/Windows infrastructure like all the entrenched Tier 1 ‘s will be on.

 

As a CSU long, I really appreciate someone like Savneet at the helm who has studied Leonard and appears thoughtful on capital allocation. This deal will prove fruitful in the long term.

[whistlerbumps]

Agreed and bought more as well.  Converts almost always hammer the price in the ST due to convert buyers hedging.  This debt allows them to get out from the restrictive credit facility and gives them capital to more aggressively build Brink.  Signing more Tier 1s for Brink will add tremendous value and they were resource constrained previously so I believe this is a very good deal.

[whatdadil9]

4m shares traded in two days. Thats 4x the most ever traded in Company's history on super positive news.

 

On 8300 locations installed and 2k ARPU that's 17mm ARR. DQ is 6k units. Its our understanding that ARPU on DQ is like 280 a month and they are giving 5k subsidies to adopt brink. Coca cola is also giving 2,500 a year for 10 years.. Pretty wild. So 3400 per year ARPU x 6k units is 20.4m SaaS right there... I think realistically this thing can be 25k restaurants installed year end 2020 at 3k ARPU.. Upside to payments. Upside to M&A. Stock flat for 9months...80mm of capital and outsider CEO too good to be true...