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So with the latest earnings report will be released this week, On Wednesday.
Although the share price has now dropped about 80%, these ER will be for the period up December - at this time the share price was about $20 - Because of this there will be a re-measuement of the earnout liability that will create a very sizable loss (this is a loss on paper only, does not affect cash-flow)
Anyways - I expect that with this "growth stock" still transitioning away from their cameras and focusing more on subscriptions, I think the market will over react to this ER and cause a sizable drop.
This is where I think a fantastic buying opportunity will arise. Current price is $8.50 and I expect this to drop to somewhere in the region of $6-7 this week.
Now the balance sheet is very strong with no long-term debt, and the Earnout liability is the only real liability of note. This is contingent on the share price hitting certain prices. The lowest of these is $13.50 up to $25.50
If share price doesn't reach these milestones then this cannot be activated. Trances of 3.9m.
Moving onto the Real Value - When the next earnings report comes around for Q1, the share price will be much lower, the fair value of warrent and Earnout liabilities will be remeasured again EXCEPT this time the share price will be very far below the $20 on December 31st.
This will cause a huge swing in the P&L and if the company can show improvements in growth and outlook, I feel that the future is very bright. And if market sentiment was to improve by then too it would be an added bonus!
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