By the way, why hasn’t Antti Mäkelä made an announcement about this acquisition, even though he sits on the board? There have also been these additions in February and October at least. Or are these some kind of board remunerations or similar, and for some reason they don’t need to be reported? I don’t remember exactly how those regulations went.
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I haven’t seen an announcement myself, at least 
Antti, of course, is in a situation where his purchases probably remain quite well below FIVA’s reporting threshold. If he continues this trend, at some point he too will face making those announcements. The system where those are reported is absolutely terrible, so no one would voluntarily want to start doing it.
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Own share repurchases continue now that the SiPi project has been completed:
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So, has Mäkelä made a notification to the company and FIVA, but these have not been communicated to the market by the company?
Because according to Nasdaq Helsinki Oy’s guidelines, all insider trades must be reported to the company and FIVA, but now there is a slight ambiguity as to what the company’s obligation is to communicate these to the market.
And it thus concerns all “listed companies,” which also includes FN companies.
Edit: there seem to be several guidelines now, so apparently the 20k limit is also in effect. A bit confusing.
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So, has Mäkelä made a notification to the company and FIN-FSA, but these haven’t been communicated to the market by the company?
Aren’t those remunerations paid in shares to board members? Note. Timo Lappi, i.e., the Chairman’s, amount has also increased (by about 2x the amount).
As Franco also points out here, this large share buyback program is a very good thing for us owners, provided that the figures (revenue, profitability) develop in the direction that management has led us to expect (targets) and in which we investors believe when owning Witted’s share. Big thumbs up to the management for this from the perspective of increasing shareholder value 
It’s hard to imagine achieving a better risk-reward ratio through an acquisition when one can acquire one’s own shares at this price, and the target to be acquired is well known in this case.
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No very interesting changes on the ownership list in May.
Nexec sold, Mikko Mäkinen trimmed a bit, and trader Kankaanpää capitalized on the stock’s rise.
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Hartsa was talking about his company as an investment at the IT services evening. 
In addition, he also got to be interviewed by Frans.
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Revenue (4.6M€ vs 4.3M€) and number of specialists (332 vs 325) clearly exceeded Franco’s expectations. Sales successes in May were 50% higher than last year, and verbal comments were also promising. Now just get the summer’s next steps in order!
The report was also released already on the 7th business day 
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Oh damn, is it the seventh already? Oh crap. Now everyone will expect these to be delivered early in the future. Oh well. The thing about these is that the information must be published as soon as it’s ready. Now they were completed today.
Here’s my summary of the month: TOUKOKUU LEVEL COMPLETE 💥 CEO-Harri in the chat: Wazzup squad! Toukokuu oli... wild. 💀 Uudet hahmot: W Vauhti: Lowkey L Liikevaihto 4,6M€ 👉 pretty mid, mut ylöspäin mennään. Viime vuoteen… | Harri Sieppi
→ go check it out so I don’t have to repeat myself 
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The stock price firmly moved above the SMA 200 for the first time since listing, and the bears couldn’t generate enough selling pressure to push the price back below it. Therefore, I declare the downtrend that started with the Death Cross to be over, the April 7th price bottom as the turning point, and the first phase of Witted’s turnaround to be complete. From the intraday lows of 1.145, it has already risen a solid +41% 
Now the company somehow needs to turn its fundamentals around, either in terms of growth (
) or a significant improvement in profitability, and thereby achieve sufficient escape velocity to launch the stock rocket out of the gravitational field of horizontal crawling. These are, in my opinion, usually the best times to invest in turnaround companies, because expectations are non-existent, people have lost money in the stock, and investors still have a long-lasting, unfounded negative sentiment towards the company due to its recent history.
Now seems like an excellent time to monitor the company’s fundamental development and fish for the signal that we are heading back into an uptrend. It always takes investors a couple of years to realize that a turnaround company has genuinely turned around, so if we could get 1-2 positive quarters here indicating that things are happening at the company, there would still be time to scale in before the big boys wake up.
Let’s remember Jesse Livermore’s most important rule: The trend is your friend. Buy stocks that are rising and sell stocks that are falling.
Not investment advice. The undersigned is an aggressive risk investor who often also loses big in the stock market. Do your own investment research and make your own decisions, etc.
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Frans has commented on Witted’s May.
Witted’s May revenue grew (-3%) better than our expectations and turned into growth (+2%) on a working-day adjusted basis for the first time since Q1’23. Revenue per specialist was at an excellent level, and the number of specialists turned into pleasant growth compared to April. Sales comments were slightly more optimistic, although uncertainty remains high. Overall, May’s figures caused a slight upward pressure on our forecasts, but in the big picture, they support the improving performance level we expect for the rest of the year, and our view of the company remains unchanged.
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Hey,
Thanks for the comments to Eka. Thanks to Sijoittaja Alokas and Karhu hylje for sharing those materials here. Franco also always does a good job with these comments. He calls me before writing them and asks about the feelings behind them. Yesterday we had another good discussion about the state of the world, etc.
It’s nice to hear that SMA 200 looks good. It’s especially heartwarming to read about such death crosses. One learns something new every day by reading these writings. A year ago, I wouldn’t have dared to even open a link, as the tone sounded so gloomy. But that was a good thing - perhaps such news also brings new people to this thread!
This spring left a really good taste in my mouth. Everyone at Witted has done a great job so that we’ve been able to turn the direction. This spring, 15 more people have joined expert roles (awesome), the price competition hasn’t spread to us, but we’ve managed to navigate these minefields and even exceed Franco’s forecasts a few times. Now there are still very important weeks ahead to get a vigorous start to the autumn.
-H
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Regarding the May report, it would seem that private demand is weakening and public demand is strengthening further 
@Harri_Sieppi How to interpret a recovering market?
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It’s even surprisingly controversial among Finnish investors to systematically examine stock price movements and try to understand investor psychology and emotions through them. Investing is still such a new hobby among the general public, and our market gurus are so book-smart that the activities of ‘speculators’ are still viewed askance. A car, a house, and a spouse are acquired emotionally, but when the same person enters the stock market, they buy their shares purely rationally, utilizing information obtained from hundreds of pages of a company’s annual report. However, I have yet to meet an investor who can explain the price development of the almost worthless cryptocurrency Bitcoin or the meme stock Gamestop purely with fundamental theories, so it is clear that to explain events on the stock exchanges, one must sometimes also know how to use other tools than cash flow and revenue.
Those investors who joined Witted after the IPO and believed in the company are almost all still at a loss. Those who were not interested in the company are still not. Those who did not believe in Witted have had their own view confirmed. From these starting points, it is difficult to get investors to buy the stock, so the stock must ‘gather strength’ for a new rise with a sufficiently long horizontal mambo, fundamentals must turn sharply, or some catalyst must emerge that changes the investor story and captures investors’ attention.
Weak price development even affects fundamentals. It is harder to use the stock to raise financing or as currency for an acquisition, and decisions and operating methods quickly become more cautious. Everyone, of course, claims this is not the case, but that’s how it goes. Making measurements always changes the behavior of the subject, which is why in psychology tests, subjects are never told what is actually being measured. When everyone in the company knows the stock price level and its direction in recent years, it affects all employees of the company. Even if that price movement is completely detached from their own actions.
If this sounds frustrating to a CEO, it is also frustrating to an investor. I myself have been following Witted for three years now without earning a single penny. At the IPO, I concluded that the company was too expensive for my taste, and then that long and strong downward trend soon began, which is why the markets have not given permission to buy the stock, except for short-term exploitation of individual overshoots, which I am bad at.
Well, now in April, I finally thought about fishing for a buy a bit closer to that one euro mark, because it is psychologically one of the strongest support levels for the price, but the stock never went below €1.1, and now it looks like those levels will not be revisited. And I have no idea if the next buying opportunity will come this year, or if I have to wait for years, or if it will happen again that a suitable buying opportunity never comes. In the back of my mind, there’s a throbbing desire to buy just because of the time spent and the fear that if the price jumps to, say, two euros, I might not be able to join Witted’s next rise, but discipline doesn’t allow me to make such a bad decision; it forces me to lie still on the lookout before the elephant gun is fired. Active stock investing for me is a wrestling match between sitting on my hands and hating myself. If someone buys stocks for their portfolio purely rationally without emotions involved, I can at least wave the flag that I am not such an investor 
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This has been explained earlier by Harri; he speaks from Witted’s perspective about the market picking up. The reports speak about the markets on a general level.
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Moro @Putti,
Good that you’re spotting and sharing that report here too. In my eyes, that data is “broken”. Technically, I don’t believe it’s broken. Excel itself works, but the industry changed in 2022. Before that, companies collaborated a lot, information about new projects was widely shared across organizational boundaries, but now that’s no longer the case. The competition is now more binary, as there isn’t a shortage of experts in the same way there used to be. Because of this, it’s much harder to form a picture of the industry’s demand now than it was before.
That Insights project started as a passion project of mine. I was on a flight to Levi with 70 IT executives. During the flight, I thought I’d take the opportunity to make the most of the time and try to form an overall picture of how these companies were doing. I made the first version of this insight. I showed it to Seppo Kuula, the then CEO of Siili, who got excited and asked me to send him the Excel file as well. Soon, one after another, these other executives came asking me for the same Excel, and I shared it. This tradition has now been continued in the Witted Insights report, but it’s now done by one of our team members. The Excel has changed a lot; when I look at it, the number of tabs has grown enormously, and there’s a lot more data. That’s one snapshot of the market situation, and the changed demand curve certainly shows that the industry has undergone a major transformation. However, I wouldn’t necessarily try to form an understanding of how companies or the industry are doing based on it, because I don’t believe that forming such an understanding is possible based on this, as it perhaps once was.
In the autumn, I need to consider whether to stop using that data or if there’s a better way to compile it.
Regards, Harri
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Hello, Sir Sieppi!
I always love to read your thoughts and comments, i am learning something new every day!
I see some of your peers in Sweden (B3 Consulting Group) and in Norway (Bouvet) Give information regarding their utilization rate - which is an amazing data for investors,
Would you perhaps consider this too?
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Hello Sir Thomas,
So great to hear from you!
Funny enough, when we first started reporting, I secretly hoped we could just share our internal metrics spreadsheet with everyone — same data I use myself. But my more traditional advisors talked me out of it. I still believe it would be a bold and brilliant move someday.
Regarding utilization rate — you’re absolutely right. It’s an important metric for consulting companies, but more complex than it looks. For example, we track it in four countries, where we have different legislations. We follow billed hours, allocated hours, potential hours, billing rates, vacations, sick leaves etc - different utilization perspectives.
I really like that B3 shares this openly. However, I’m not sure which of our internal metrics would directly compare to theirs. Their definition seems to be “available hours minus vacation,” but it’s unclear f.e. if it includes only front office or also back office. Imho, the levels look really low if they are only front office figures. Swede’s typically use their 100% allocations to the max (in contrary to Finns who mark all toilet breaks in the hours)
We should definitely consider publishing some of this too — we already track it monthly anyway. The key is to present it in a way that brings clarity and insight, not more questions. Utilization is one of those metrics that seems simple at first glance — but often needs ten follow-up explanations.
Thanks for the nudge. I’ll bring this idea forward again when next time discuss how to improve reporting.
Best regards,
Harri
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I see, issue lies in how to present it so that you compare “apples-to-apples”, regarding the swedish and finnish, and I wasnt aware of the 100% allocations difference aswell, thank you for that.
Either way, I recently started an investment position in Witted, eventhough I am sad to hear you leave - I always admired your openess, transparency and pragmatic approach to leadership and communication with the public.
Although my own thoughts are that you have created an organisation with an amazing culture, so I am not too worried regarding new future ceo. Lets hope he is a great capital allocator!
The stock price today is incredibly low, enterprise value/sales at modest 0,32 for a company with historic organic growth above 50% cagr
If I do a little back of the envelope exercise I find that “intrinsic value” should be roughly;
Total 20% organic + ebita margin target for 2027 lead to;
Revenue: 5% growth 2025, 15% 2026 & 2027 = 74meur in 2027
Ebita 2027: 5% of 74meur = 3,7meur
Net income 2027 : 3.7*0,8 ~~ 3 meur
P/E multiple 15
Fair value = 45meur
Net cash of = 8meur
Enterprise value = 53meur
Compare that to days enterprise value in the stock market: 18meur
So that gives 2,5 years to reach intrinsic value
Buying Witted today leave 18 to 53 meur in 2,5 years gives a yearly return:
54% CAGR
Also looking from a capital cycle lense, a lot of oversupply has left the industry, although some oversupply in tailored solutions still persist. Although in Witted it has been 5 months of stabile employee growth which I view as as strong indication of potensial turnaround
Either way - I wish you all the best for you, your family and friends, and thank you again for the thoughtful responses to my silly questions and all other responses you have shared publicly, I sure as hell has learned alot, and look forward to learn more.
All the best
thomas
norwegian amateur investor
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