Friday 19 January 2018 | ShareProphets: The one stop source for breaking news, expert analysis, and podcasts on fast-moving AIM and LSE listed shares
Like London buses you wait for ages and then suddenly they all arrive at once. Big Sofa (BST) has announced two major contract wins with Target Corporation, a leading US retailer, and Zurich North America, the US company of the global insurance group.
Disclaimer: a) We own a large number of shares in Big Sofa (BST). b) There is a bear case. My colleague at ShareProphets puts it in full HERE. I explain why he is wrong in a Bearcast HERE. But why are the shares a buy? Unlike Mr Bear I have spoken at length to the company. So I enlarge on a piece from HotStockRockets on the basis of that chat.
I’m not particularly good at being smug but it would be remiss of me not to give an update following Big Sofa’s (BST) interims on Friday as I was pretty spot on. For completeness, Tom has already covered his thoughts in a Bearcast and a separate article HERE and HERE respectively, but here’s my take on it.
When the international video analytics provider to consumer brands and market research agencies completed a placing a few weeks ago it flagged up that H1 results for calendar 2017 would not be anything to write home about. Let us not kid ourselves: they are piss poor. But that should be no surprise and it is what happens next that matters which is why we think the share price sell-off is wrong.
I have been having some good natured debate with Tom on the pros and cons of Big Sofa Technology (BST) recently and, as ever, he has allowed me to present my bearish version of events in advance of next week’s interims in contrast to his bullish thoughts the most recent of which is HERE.
This will make those who said Big Sofa (BST) was set to do a placing happy. Except that they stated that it was because the business was doing badly. The reality is that it is going gangbusters and needs working capital to take on extra business. Thus last Thursday four phone calls to four fund managers meant that - with NEDS lead by Adam Reynolds chipping in £210,000 - £1.5 million was raised at 18.5p in just ten minutes.
Big Sofa's (BST) AGM went smoothly enough but the market seems to have overlooked the statement from chairman Nicholas Mustoe. It really is very exciting indeed. Mustoe stated:
The distracting noise and untruthful commentary surrounding the results from Big Sofa (BST) a couple of weeks ago has died down and the shares have started a re-rate - they are now 25p-26.5p and if you can get any stock at all at 25p or better you should do so. We continue to see a minimum price target of 50p + to sell. Today we have news of two heavy hitters coming on board.
"When's the Big Sofa (BST) placing?" said one of our contributors after results last week. Well "there isn't one" said the company. Over at Value the Markets they claimed that the company had guided that it would do calendar 2016 sales of £1.5-£2 million when it listed (sales came in at £757,000). Given that miss VTM said "take profits" and Leon Boros of the discredited abusers and rampers nest that is ShareSoc tweeted this aggressively. But there was no official guidance from the company- that was not true. The company listed on 19 December 2016 - is anyone really claiming it guided to £1.5-£2 million 6 days before Christmas and 12 days before the year end when it would have know that its sales just ahead of the Christmas break were going to be c £757,000 ( the eventual FY number) . What total bollocks.
On 12 June Big Sofa (BST) announced a Global Agreement with a Consumer Goods Multinational based in the US. This was a big deal and reinforces our bullishness on the shares. But it did not name the company. But hang on have a look at the company's recently updated website below:
Big Sofa (BST), the provider of video analytics technology and services has announced that it t has been approved as a ‘Global Systems Partner’ to provide video research and technology services to one of the world’s largest consumer goods corporations, headquartered in the USA. Annoyingly we are not told who this is but it will leak. You may remember the big win with a market research firm?
In this video from the storming success that was the 2017 UK Investor Show, Simon Lidington, CEO of Big Sofa (BST), is at the podium. And make sure that you keep April 21 2018 free for next year's UK Investor Show.
Big Sofa (BST) is signing major deals but the clowns who manage its PR seem unable to communicate why this is so important to the market. In due course despite the manifest incompetency of Vigo Communications, a firm too cowardly and inept to answer basic questions posed by email, the truth will out and the shares will zoom. But pro tem this is frustrating.
We are already well ahead on this share tip. But we can still see it doubling from here!
We have four more share tips out between now and January 2nd which you can access for just a fiver HERE, but here is one we prepared earlier which is our first share tip of the year.
Big Sofa Technologies (BST) IPO'd on AIM today at 17p - the shares are now 21p. It is the latest Adam Reynolds stock and we own "a few" shares. I recorded this podcast to discuss the investment case with Adam.