For those who didn’t pick up on this in my End of July summary, I thought I’d post it as a separate thread:
After reading the initial write-up on the British tech company Blue Prism early in the month by Ethan, I got excited and took a 3% small position. But then I started thinking to myself: “I think we made a real mistake here!”
After re-reading the information in the write-up, going on to the earnings report, the comments on Blue Prism board threads by guys with much more tech knowledge than I have (and who are actually working in tech in the field), I became concerned that I was investing in:
A second level, troubled, company
with rapidly slowing growth,
rapidly shrinking market share,
losing gobs of money,
very negative cash flow,
clunky interface,
using programs based on very old technology,
with poor marketing,
getting left behind by the category leader,
with a falling price for the last year and 9 months,
and a lower price even than the price two years ago.
It seems very much as if we are hoping for a turnaround or an acquisition instead of investing in a category leader.
I learned that is a company which trades not on the main London exchange, but on a “funky” secondary exchange (according to a spontaneous comment by the Schwab Global representative with whom I was placing an order), and a company from which we only get a report every six months… and that what we are doing is investing in the hope of a bounce when the actual market leader goes public, and gets a lot of publicity and hype. What we are missing about that is that all that publicity that the category leader will get will actually risk pushing Blue Prism even further into the second tier background as far as their chances for getting new customers.
I asked myself “What am I doing investing in a company like this?”
I decided to sell half of my 3% position, and then decided to sell it all, which I did at a small loss (5%), less than a week after I bought it. I’m perfectly aware that my decision may turn out to be a mistake, but that’s what I did and I have no regrets. Oh, I put most of the money into a new little position in Cloudflare and a some into Zoom and Fastly.
Saul
A link to the Knowledgebase for this board is in the Announcements panel that is on the right side of every page on this board.
For some additions to the Knowledgebase, bringing it up to date, I’d advise reading several other posts linked to on the panel, especially “How I Pick a Company to Invest In,” and “Why My Investing Criteria Have Changed,” and “Why It Really is Different.”