Z1P - The Rise To $15.00, page-184

I've been in the markets for over thirty years and brokered major deals with some of the leading merchant banks so have first hand knowledge of what happens in the "City"

A lot of these "jam tomorrow " stocks exist for the single purpose of making the founders rich and have zero chance of ever making a profit.

The market history is littered with "darlings " who eventually go bust .

On the 21 st August the price was $6.63 and a large green candle the following day as The E Bay news was leaked.

The news was released on the 26 th the day before the full year results which can only be described as horrendous.

This really was a "fluff" announcement and not worthy of a seperate announcement outside of the full year results.

After initial excitement to the headline figures the price has now crashed 44 per cent from its highs

In reality those results were shocking and worthy of a 44 per cent crash in price from $6.63 resulting in a share price of $3.71

The headline numbers were bad but getting deeper into the accounts they reduced the losses by a $47.5 increase in value of Quadpay.

Real cash item losses were $70 million and bad debts a staggering 33 % of revenue.

It takes a staggering level of financial mis-management to produce that level of losses and bad debts on only $ 160 million of revenue

Of course this revaluation was nonsense even before PayPal announcement.

I note they have drawn over a billion $ of warehouse facility and had very little headroom left on borrowings.

Post balance sheet this was increased to $164 million headroom so they have very little borrowing capacity left to grow the business in Australia.

The reason there is such heavy short interest is they only have $32 million in cash and a similar amount in excess of receivables over borrowings

With the full ownership of Quadpay those losses are going to accelerate and they will need to come back to market within six to 12 months but their financials are so dire that it would need to be at a extremely heavy discount and significant dilution.

i can see another CLH here which has been suspended for months and may never return to market.

All IMHO and DYOR