Jeffreries Target Price-$0.60, page-58

Appen is debt free because no one will lend them any money. They no longer have any facility to draw down, the only way they can raise more money is with hugely discounted rights issues. The first half of the year is usually loss making. They are no longer developing products (no CTO, no CPO). Unless there is some huge change in fortune they will need to raise money again at the end of next month, I would not like to have a significant holding on 27th February. I expect there to be more excuses as to why the company is yet to become EBITDA positive and a plea for more money. If the banks won’t lend them money (no CFO) why should shareholders give them more. The only thing keeping the price up at the moment is the underwriter pumping the price so that they can offload at a profit. Once this 22m overhang is cleared the price will fall below 55c. Appen will become a zombie company relying on ever more frequent discounted cap raises to keep them afloat. Relying on interest rate cuts to boost performance will not work, they have no debt.