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First Derivatives & the NASA "Customer win" er....

By Tom Winnifrith, The Sheriff of AIM | Thursday 11 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.

Okay this is not a slam dunk pig and pork like the one that enabled the really dodgy IPO handled by bent broker JM Finn, bit it seems that every "deal" announced by First Derivatives (FDP) now has to be examined to see if it is what it purports to be.  Following on from the “contract win” with Red Bull Racing, which appears to be more akin to a sponsorship deal, another “contract win”, which should bear much closer scrutiny is the one with NASA.

Sell side analysts like to describe First’s partnership with NASA Frontier Development Labs as a “contract win”. The best description is by Goodbody, that talks about the “analysis of structured climate data to predict weather patterns.” There is a lot of embellishment of the truth in that statement. To begin with, the partnership is to solve “space related challenges.” The project “weather” in question is actually solar storms!

Not to matter. The interesting point is that this appears to be nothing more than marketing for First. I.e. it’s not clear that NASA is in fact a paying customer. In fact, there is evidence to the contrary that suggests that First is the one paying for the privilege of being associated with NASA!

Below is a link to the scientific paper that describes the NASA project.

To its credit, Kx Systems is mentioned in the project paper. However, the acknowledgment describes Kx’s involvement as follows:

We are very grateful to Kx and to NASA’s Heliophysics division for providing financial support that enabled this interdisciplinary collaboration and to the SETI institute for providing the logistic framework that nurtured and enabled our research.”

Hang on? “Providing financial support?” Is NASA a customer of Kx or is Kx a sponsor in this relationship, just as the evidence from the Red Bull Racing “contract win” might suggest?

What’s more, in this brochure, Kx Systems is simply profiled as a “supporter” or a “partner” of Frontier Development Labs.

What’s even better, James Parr, the director of the NASA Development Lab quoted in the FDP PR below, is the co-founder of a company called Trillium Technologies Limited.

As expected, Trillium’s equity ownership belongs to Parr.

FDP/Kx is always described as a “suuporter” or a “partner” or “teaming up” in this relationship. So is it actually a commercial relationship or just PR fluff?

Keep selling!

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