A CXO company with ~50% of EV as Cash on Hand
What are the implications? The ones I can think of are:
1. A sign they are not using cash efficiently. I know they are looking for M&A deals, but haven't done any yet. A large portion of that cash are some >1 year money-market instruments. might be longer. Could be a sign that the CEO, an ex-banker, somehow has no idea how to use that cash.
2. Why not infuse that into sales and marketing to acquire more enterprise customers? Mainly governments and pharmaceutical/biotech firms.
3. The market is underestimating it's potential. The Co. doesn't have much interest-bearing debt. Has big salaries payables and accounts payables. Term deposits and restricted bank cash make its operating, liquid cash position kinda small compared to those payables.
What are your take solely on this? Assuming its busines model is valid.
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