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Etherstack (ASX:ESK) - CEO, David Deacon - The Market Herald
CEO, David Deacon
Source: PPR Australia
  • Wireless communications company Etherstack (ESK) has released a strong quarterly report and trading update soon after its thousandfold share price increase in late June
  • After signing a major deal with Samsung, the company's shares increased by over 1300 per cent in one day at the end of June
  • Since then, shares have corrected to back under a dollar but still well above their 2020 average
  • Today, the company revealed some strong customer receipts over the June quarter, which it ended cashflow positive by roughly $2 million
  • Moving forward, Etherstack has just over $2 million in the bank to play with
  • After today's report, shares in the company are trading almost 18 per cent higher and worth 84 cents each

Wireless communications company Etherstack (ESK) has released a strong quarterly report and trading update soon after its thousandfold share price increase in late June.

The company recapped some key milestones hit over the past half-year, including the expansion of its large digital radio network, reduced borrowing and, of course, the major deal with Samsung.

When Etherstack announced the Samsung agreement, under which the tech giant will use Etherstack's Land Mobile Radio (LMR) softswitching tech to deliver Mission Critical Push To Talk solutions to telecommunications carriers and governments across the globe, the ESK share price soared.

In one day, shares went from 12 cents each to $1.63 — a 1358 per cent increase. The day after, shares touched as high as a whopping $3.70 before going through a correction and settling back under a dollar.

Today's quarterly financial report suggests Etherstack is not a one-hit-wonder, either. Over the June 2020 quarter, Etherstack's customer receipts outweighed its spending, resulting in the company ending the quarter cashflow positive by US$1.4 million (roughly A$2 million). The company made US$2.25 million (roughly A$3.22 million) from customers.

Of course, the company had just US$474,000 (roughly A$678,000) in the bank at the end of a cashflow negative March quarter — meaning investors are yet to see sustained positive cashflows from Etherstack.

Still, the company. said along with increasing recurring revenue, debt is continually being paid down and retired. With US$1.48 million (roughly A$2.12 million) cash in the bank at the end of June, the company has more than enough to keep operating at recent spending levels.

Following today's update, Etherstack shares are trading 17.61 per cent higher at 84 cents each. While this is a long way down from $3.70, it's still nearly 600 per cent higher than Etherstack's share price one month ago. The company has a $100 million market cap.


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