January 11th, 2022 | 11:20 CET
Steinhoff, Aspermont, Bayer - Crazy speed
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The native Franconian has more than 20 years of stock exchange experience and a broadly diversified network.
He is passionate about analyzing a wide variety of business models and investigating new trends.
It goes hit after hit
It is rather rare to find such a success story as that of the digital media company Aspermont. Before its transformation about 5 years ago, the Australians were a mining industry publisher that gained notoriety by publishing the two oldest publications for the mining sector, Mining Journal and Mining Magazine. But the days of print media were coming to an end.
So the CEO, Alex Kent, decided to start the digital transformation by launching an "anything as a service" (XaaS) model for B2B media that would distribute high-quality content at a cost to a growing global audience. Aspermont has over 7.5 million registered contacts from the mining, energy, and agriculture segments through its long history. Payment runs similar to Netflix via flat-rate model, but multi-tiered and personalized.
The model quickly bore fruit. Aspermont has established itself as the absolute market leader in the mining industry. The next step is to expand into other segments and countries by developing the disruptive B2B platform, which is expected to generate enormous economies of scale. With the establishment of a joint venture with Spark Plus and IPC, the entry into the lucrative fintech segment was sealed with the development of a capital-raising platform. It could contribute significantly to the already positive cash flow in the near future.
CEO Alex Kent always emphasized growing from its own cash flow. As the latest annual figures show, this has undoubtedly been achieved. As a result of the high cash flow, the balance sheet shows a cash balance of AUD 7.0 million, and the gross margin rose from 58 to a remarkable 65%. The potential has also been recognized by SooChow CSSD Capital Markets SCMM, an investment bank specializing in young, high-growth companies in Asia.
The latter signed an agreement with Aspermont for management consulting services. Separately, SCCM will underwrite unlisted transferable stock options that can be exchanged for Aspermont common shares. In total, there are up to 250 million shares with a maturity date of only Sept. 30, 2022, and an exercise price of AUD 0.0432 per share.
Aspermont's share price in Sydney is currently quoted at AUD 0.025. Thus, there is a potential of almost 50% until SCMM even gets the opportunity to exercise the options. Since we assume that an investment bank making investments in the order of more than AUD 10 million is looking for high returns, investors should be eager to see what happens in the next few months. A win-win situation for Aspermont! If the options were to be exercised, the Australians would receive a sum of AUD 10.8 million, the equivalent of EUR 6.84 million.
Steinhoff sells the silverware
Following the agreement with the former Tekkie Town founders and Trevo Capital, the approval of the main settlement should only be a formality; the Western Cape High Court is expected to approve it on Jan. 24, 2022. That would solve the first construction site. From now on, it is up to the Steinhoff Group to push the enormous debt and interest burden. In the previous week, the initial S-1 registration form was filed with the SEC for Mattress Firm to prepare for a possible IPO.
The German-South African group still holds just under 50% of the mattress retail chain from the USA. At the same time, the Company itself was struggling with bankruptcy. Before the insolvency in 2018, the Company operated around 3600 stores in the USA. After the closure of about 700 stores, the insolvency proceedings were concluded at the end of 2018. Since then, things have been going smoothly again, with sales in the first half of 2021 totaling around EUR 1.69 billion.
And the flogging of silverware continues in Europe. The group with the red chair, XXXLutz, is taking over the Swiss discount furniture chain Lipo with over 600 employees. The acquisition includes all 23 of the chain's furniture stores in Switzerland. The sale price was not disclosed, Lutz announced Monday. The deal is subject to approval by the relevant antitrust authorities. The transaction is expected to be completed by mid-2022.
Steinhoff's enterprising management is trying everything to push down its enormous debt burden. However, it remains more than questionable whether the subsidiaries, which are undoubtedly doing well, will be enough to service the debt. It remains risky.
It took a long time, but it looks as if the pharmaceutical and agricultural giant Bayer has found its bottom. With the breakout above the resistance at EUR 49.90, the next target is around EUR 57.73. Should this striking area be cracked, the bottoming formation should be finished, unlike the glyphosate settlement.
For the future, the Leverkusen-based Company has agreed on strategic cooperation with Mammoth Biosciences. According to their own statements on Monday, both companies want to develop next-generation CRISPR products jointly. "The partnership, which is additionally combined with a continuing option for Bayer, aims to use Mammoth Biosciences CRISPR systems to develop in vivo gene editing therapies," Bayer said. Initially, the Company will focus on targets in the liver, it said. According to the statement, Mammoth Biosciences is expected to receive an upfront payment of USD 40 million. With future potential milestone and option payments, that sum could rise to as much as USD 1 billion.
Digital transformation is advancing, and Australian digital company Aspermont has recognized the signs. With a new partner, there is considerable growth potential here. Steinhoff continues to sell briskly but remains high-risk. Bayer may have achieved the technical liberation blow.
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