IPO - BikeExchange Limited - 9 February 2021, page-3

No post here, yet. ... So, I will get the ball rolling.

I am a keen cyclist (a few thousand kilometres a year ), I troll the internet for all sorts of bike stuff to buy. Why not having a share in a bike business? Here are my musings, and some of them are just anecdotal:

a) There are only so many bikes one can have (5 in my case, and I only ride 2 of them). The cycling boom has gone on now for a while, there will be a saturation point in demand (not good if you are looking at a growth stock)
b) 2 Bricks and mortar bike shops in my area have closed in my area, 1 has reduced retail space in the last 3 years. This could be good for internet presence, but could also be a sign of either previous oversupply (shops) or a slowing or lessening in retail demand.
c) Looking at the pro forma figures (page 11 of the prospectus):

• sales are stagnant or declining over last 3 years (in mio $3.9, $3.9 and $3.7)
• net losses varying over same period: in mio $2.9, $4.5 and $2.9

BEX has been around for more than a decade, winning TELSTRA business of year in 2012. According to linkdin, the co-founder Sam Salter has been involved for more than 13 years. ... and a prospective investor is still looking at a loss of $2.9 mio on a sales revenue of $3.7 mio.

When this IPO goes through, the will be 292,995,907 mio shares issued. Valued at $0.26, this would mean a market cap of a little more that $76 mio. To me, this seems high if the BEX loses 78 cents per $ turnover (2.9 mio net loss / 3.7 mio revenue). I would need to see the uptrend, like where is the blue sky in the business figures?

I am not sure if I am in for the ride. Better hop on the bike now.

DYOR