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Chairman Chris Vonwiller has sold two million shares for "a number of personal reasons" and delivered himself a $58 million payday after selling at $29 a share. He remains the company's largest shareholder with approximately nine million shares, or around 7.5 per cent of issued capital. His remaining stake is worth around $272 million.

 

Appen chief executive Mark Brayan sold 95,535 shares, pocketing $2.9 million, to satisfy tax obligations and diversify his personal investments. He sold at $30.60 a share.

 

Non-executive director Bill Pulver sold 275,000 shares, delivering a windfall of around $8.4 million. He sold at $30.68 a share

 

Appen's share price closed at $30.48. Shares have rallied from a low of $17.14 on March 12.

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Industry background:

 

Appen is one of the two big players in the artificial intelligence data services industry. It provides the world's biggest technology companies with the crowd-sourced data needed to train the AI algorithms that power everything from search engines to voice assistants and autonomous vehicles.

 

Its biggest rival is Lionbridge, which was acquired by New York based private equity firm H.I.G Capital in 2016 for $US360 million ($489 million). There is also a range of smaller venture capital-backed players in the market.

 

Appen has flourished in recent years as the major tech giants, such as Microsoft and Facebook, have invested more and more in AI.

 

The result: Appen's half year result to June 30 was solid, with the business resilient against the pressures of COVID 19.

 

Its revenue grew 25 per cent to $306.2 million and its net profit after tax increased to $22.3 million, up 20 per cen

 

The company's content relevance division, which is data annotated for the purpose of improving search results, is the growth engine of the business, with revenue up 34 per cent to $273.9 million. But its substantially smaller speech and image data segment fell 20 per cent from a bumper first half in 2019, despite being the second strongest half for the segment in the company's history.

 

Its speech and image results came in below analyst expectations and was the catalyst for an 11 per cent sell-off on the day, undoing share price gains in the week leading up to the result.

 

Outlook: Despite taking a minor hit from COVID-19 because of smaller customers delaying some projects, Appen reaffirmed its previously-upgraded full-year guidance.

 

It has forecast underlying earnings before interest, tax, depreciation and amortisation in the range of $125 million to $130 million, at a $1 equals US70¢ conversion rate, having already booked $475 million of revenue, plus orders in hand, as of August.

Over the longer term, the company's future is also bright. It is well positioned to benefit from the acceleration of digital transformation and the boom in e-commerce as a result of the COVID-19 pandemic, with its services required by more and more businesses investing in AI.

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  • 11 months later...
... any view around their sliding performance lately?
Welcome..

 

ooh ahh.... that is quite a slide. Appen was one of the WAAAX stocks, trading at high PEs and needing to grow spectacularly to make it?? These were momentum stocks, and some seem to have come to a grinding halt.

 

Six months ago, this was some of the chat : https://www.livewiremarkets.com/wires/appen...-of-opportunity

 

Latest results out last week are not pretty. Revenue slid 2 per cent to $US196.6 million (about $270 million), while profit crashed 55.1 per cent to $US6.7 million for the first half of 2021.

Shares in Appen plunged on Thursday, after the AI data services company reported profits had more than halved during the first half of the year, as customers such as Facebook, Microsoft and Google, grappling with global data privacy changes, redirect spending away from intrusive user tracking technology.

Appen, which collects and establishes clean data sets to sell to technology companies wanting to experiment with artificial intelligence and machine learning, said its customers had shifted their priorities towards augmented reality, virtual reality and geolocation projects, rather than advertising....

 

 

Plus, is there truth in these sorts of advancements? : There are some interesting articles about new developments in AI which largely make the work of companies such as Appen irrelevant. Users are developing self supervised learning for AI that bypasses the work that companies like Appen do with lots of humans.

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Matthew Kidman (Livewire Markets): Here is one that has been absolutely torched, and no wonder everyone is looking at it because it used to be a market darling. Chris, we will start with you. Appen: buy, hold or sell?

Chris Stott (1851 Capital) : Sell, Matthew. Its earnings were disappointing in the recent release. We think the guidance they provided for the full year is a bit of a stretch. It needs a huge second half to get there. The last few earnings results have been disappointing from this company, so we will sit on the sidelines and sell.

Matthew Kidman (Livewire Markets) : James, it was only a year and a half ago this was one of the market darlings. It was teaching computers how to understand voices around the world, it was selling to the big tech companies. Been a disaster since. Buy, hold or sell?

 

James Gerrish ( Market Matters): I am going to say sell on it as well. I agree with Chris. What the last 12 to 18 months have shown is the lack of visibility in earnings for this sort of business. Some technology businesses have really strong abilities to forecast. These guys do not, and that has come home to roost. So for me, Appen is a sell. Even though it is around the $10 dollar level. It's been whacked, but it is a sell.

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