Why it keeps getting smashed: - high quarterly cash outflows compared to cash inflows - cash inflows not growing significantly. - minimum sales contracts with providers not being honoured (a big one imo that sorely needs explanation) This of course all leads to continual dilution through the need for more CR to meet expenses.
So all in all we have an increasing number of shares against a picture of declining potential for the product (due to sub-contractors not willing or able to meet minimum sales). If SP = earnings potential / number of shares, this is an equation that is being attacked from all sides.
Management have stated that the last quarter's recent poor performance in growth of receipts was due to seasonality. My question is that if they knew about the existence of seasonality, why hadn't they communicated it to the market previously and, accordingly, planned the CR last quarter instead - given that this seasonality was going to force them into the compromised cash position they have found themselves in today? In all likelihood the CR could have then been done at better prices.
OVN Price at posting:
12.0¢ Sentiment: None Disclosure: Held
