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By Tom Winnifrith, The Sheriff of AIM | Monday 8 October 2018
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
While readers reflect upon the various related party transactions undertaken by First Derivatives (FDP) over the years, see HERE and HERE, and in anticipation of further revelations to come do the smart thing and SELL, it seems an opportune moment to consider more recent “contract wins”.
Red Bull Racing is a customer win announced by First Derivatives just last year, in November 2017.
First Derivatives announced:
“FD (AIM:FDP.L, ESM:FDP.I) announces that it has been selected by Red Bull Racing as a team supplier for the use of its Kx technology to analyse sensor data from its Formula 1 vehicles. Initially, Kx will be deployed for the analysis of wind tunnel data, a critical element in the development of faster, more competitive F1 cars.”
Naturally, no financials were provided regarding the value of this customer win. But that doesn’t deter corporate marketing writers extraordinaire Citi or Goodbody mentioning the contract in their respective marketing to encourage investors to buy the stock.
Kx Systems, which First Derivatives currently retains a 65% interest in and is expected to increase to 100% by June 2019, says it was selected as an “official team supplier.”See here:
On the basis of this, one would assume that being “selected” would be the consequence of some type of bidding process. However, the privilege of “team supplier” is not doled out for free. In fact, as with other “customer wins” (which will be revealed soon), there is evidence here to suggest that the contractual relationship is reversed. I.e. Rather than First Derivative supplying software is it instead buying visibility?
This question is raised when considering a few other “team supplier” deals signed by Red Bull Racing.
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