Market research : RDX:WSE

Redux Technologies (RDX:WSE)
https://www.wselive.com/research/company/48

Figures for SEP07:
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Assets : 12,000,000 $L
Outstanding shares: 100,000,000
Net Tangible Asset: L$0.12
Av. share price during last 30 days: 0.82 $L
Monthly Revenue: L$ 1,787,485

How does Redux, the CEO of RDX, sees her company? “I've always felt that most of my investors have shares in my company not because they've calculated the exact value or the projected dividends, but because they simply want to be a part of a good company”.

Well, is RDX really a good company or just an oversized dinosaur of the prehistoric phase of WSE? If we look at the number of outstanding shares we easily can compare RDX with a brontosaur. The market capitalization at actual prices (0.9 $L/share) is with 90 millions so heavy and the free float with less than 5% so little that even a small movement is already causing an earthquake at WSE (compare with www.slquotes.com/lemur all major WSMI picks are RDX related).

However, RDX possesses assets of 12 millions $L only if we forget about goodwill or the RDX-brand which has a high reputation in SL. But all these soft values are linked to Redux in person as RDX is a one woman show which make it very difficult to include them in any calculation. If we look at RDX in a negative and only fact driven manner it is surely overvalued with a Net Tangible Assets of roughly 0.12 $L /share as it is the case right now.

However, there are also positive aspects which have to be taken into consideration. Redux started her company from scratch and around her impressive scripting skills. In the meantime she could build up an excellent reputation for customer scripting and in a vast field from design up to web-based systems. Redux doesn’t do this alone. In parallel she built up an efficient and complementary business network in form of co-operations or subsidiaries (Kawa, Ada Labs just to name a few). All these combined scripting and design skills help to create a steady income which is only limited by her own personal workload she can invest. Basically this is a handicap. However, also it doesn’t look as Redux want to invest in more staff (except the clones of herself she is making…lol) she sees further important growth potential through her network. The pipeline for new scripting projects seems to be plenty for months.

Benefits were wisely invested from the beginning into real estate (14 island) a business which is also profiting from her scripting skills. At a rate of almost 2 new Islands per months which get added to her portfolio revenues from this activity will become more important in the future. The fact that real estate was the reason that RDX wrote red figures in September is related to special effects which shouldn’t be overvalued. This business branch is highly complementary to the scripting activities and has huge growth potential.

RDX is also offering banking services, especially currency exchange of larger amounts as RDX keeps a high standing balance instead of using the inworld banking systems. This business is also highly profitable.

Overall, we see RDX as aggressively in the market as a hungry Velociraptor which is looking for fresh prey- but only financial sharks are eaten - customers get a warm and comfortable place in her nest. Sorry, Redux is too much a nice furry so that I couldn’t resist to add a furry metaphor.

We recommend to buy this title at actual prices also the NTA is low because of the high number of outstanding shares. It’s one of the most stable titles on the WSE board and has growth potential. The actual real estate problems are only temporarily and are compensated due to other activities. We see the average share value in three months time at 1.2 $L and dividend at 2.5%.

Positive aspects:
• Very good management
• Clear and well adapted business model
• large network which permits to handle any scripting project from A-Z efficiently
• Excellent Customer relationship management
• Consistency of business and dividend history
• Good communication skills towards share holders
• Future outlook looks promising

Negative aspects:
• Too many different tasks for CEO which is a risk for further growth
• Number of outstanding shares to high and free float to small
• infrastructure, looks as RDX is victim of its own success


Casper Trebuchet
LEM, CEO
House of derivatives (LFB, LWI, LHH, LEM Knock-In WSEIndex as IPO)
Analyst, WSE