Reflecting on Modulight as an investment over the weekend, the company certainly has a lot of work to do to establish itself as a credible investment case.
Take cost control as an example: I read a comment from Orsila mentioning that when making the factory investment, they couldn’t decide between two machines, so they just bought both. Or sponsoring both Tampere ice hockey teams and having fine-dining chefs provided by Modulight.
On top of this, with the shareholder register consisting only of founders/employees and pension funds, it does seem like a rather lazy use of capital. The company could really use a private equity-type owner to push it forward with a sharper focus on the bottom line. Right now, it feels more like a playground for the founders and employees. There does seem to be potential, as the glimpses of profitability suggest, but with a track record like this, it’s hard to go asking investors for more money. That’s why the turnaround in profitability needs to continue over the coming quarters and next year, while revenue keeps growing.