Thread by @Patrick_Invests

$TRIT Alright, so the short report doesn't seem too notable given the Rhodium news (which is notable) broke before it was published. If anyone has read the full report behind the paywall, please correct me if wrong. Given the market reaction since 11AM EST, I'll focus on Rhodium.

On the surface, losing a customer who represents ~10% of revenue is obviously bad, especially when losing them to

On the other hand, reiterating guidance despite losing said customer is pretty impressive.

Furthermore, $TRIT trades at a well below market multiple (~10x 2021 earnings), so unlike $FSLY (similar cust. concentration issue), where any slight change in the growth trajectory violently affects the stock, Triterras doesn't need to smash estimates to stay afloat

Financially, this news can actually be seen as bullish as $TRIT reduced its revenue concentration significantly and has shown it doesn't need Rhodium to grow in 2021

But there's non-financial reasons $TRIT trades at a below market multiple and the market reaction is about them

$TRIT CEO, CFO, and COO came from Rhodium (CEO was Rhodium's founder rhodiumresources.com/download/Rhodi…)

Also, Netfin considered acquiring Rhodium and Triterras together, but broke off the Rhodium piece to avoid balance sheet commodity exposure.

The question becomes why did Rhodium fail?

Bulls: Their mgmt. team left and they never found the right replacements.

Bears: Koneru ( $TRIT CEO) left before Exxova fell through. This time, he's still involved with Rhodium. What's to stop $TRIT from failing too?

The most interesting line in the 6-K filing is where Rhodium explains why it is in trouble:

"Rhodium has informed the Company that its traditional commodity trading business has been adversely impacted by the COVID-19 pandemic and the lack of availability of trade finance funding for commodity trades involving SMEs"

Let's look at the COVID impact on $TRIT (pulling from its 12/3 6K): "In addition to the ease of use of the platform during worldwide closures, we believe that less trade finance liquidity due to a risk-off environment and

fewer available funding sources are exacerbating the US$1.5 trillion annual shortfall in trade finance funding for SMEs, making our offering and solutions even more compelling."

So Kratos is well-positioned for COVID, but Rhodium, a Kratos user, isn't so well off because of a lack of funding, which the lenders on Kratos provide

The only way this reconciles is if Rhodium had some company-specific issues, which still reflect poorly on Koneru.

Having your CEO, CFO, and COO leave is a tough situation for any company. However, given his involvement, I would like to see Koneru answer the many outstanding questions himself.

A $TRIT rerate higher rests on execution + mgmt. showing competence (a low bar)

B. Riley (OW: $16 PT) is having a fireside chat with Koneru and Co. tomorrow, so hopefully that can alleviate some concerns.

To me, the only antidote is execution, and even through all of this, nobody has questioned the quality of the platform and the niche it fills.

I am adding here at $9 (this thread cost me about $0.50 per share!) based on what I view as a favorable r/r. I highly value strong management in my holdings, but with Triterras, my conviction lies in the product.

Looking forward to learning more.