To speculate, higher volumes over the last couple of days...

To speculate, higher volumes over the last couple of days (relative to normal) has overcome what support was available which leads me to think, as @Biggsy 07 mentioned, this is likely sentiment driven. Although volumes are higher than normal they aren't huge outright, so are likely to be limited to non-institutional investors, but who knows. The apparent sell off in growth stocks notwithstanding, last year EVS brought forward positive cash flow expectations from Q4 to Q3, re-iterated this multiple times and now seems to be on track to miss. Put this miss with the lackluster SP performance compared to peers since COVID, and my guess is that all those holders holding out for a cash flow positive announcement to turn everything around, are now selling out. Trust has been eroded by the miss and investors will likely want to see targets hit prior to trusting guidance again, therefore 4-5 months before we get confirmation on positive cash flow. My expectation (and hope) is that EVS does see the expected uptick in sales this quarter and next, this includes non-recurring sales which will stave off a CR for working capital.

A couple of notes,
- The other driver of positive cash flow will be cost reductions, which have been highlighted as continuing, so we are not just relying on increased revenue. This is one advantage about a business going through lean times, they get better at conserving cash, it is my hope they carry any lessons learnt forward if/when they do turn a profit.
- The SP on the other hand, I am not so positive on. I see it now providing good value, but the problem with a declining share price for a company low on cash is that the lower the SP, the worse any CR dilution, which drives the price lower and there begins the cycle. This is exacerbated by the expectation of a discounted CR, which leads potential investors to wait for a better entry. Whilst there is a possible CR looming, the SP could keep getting worse. Alternatively, it could hit that "too cheap not to buy" bottom or there is good news and it goes up....

All in all, I do expect a CR this year, but not just for working capital. I expect the CR to accompany an acquisition, something the company has said it is actively looking for as highlighted twice in the recent presentation:
- "Short-term outlook impacted by: ... New investment opportunities" - slide 9
- "M&A - Inorganic growth to be active part of our strategy" - slide 13

I think the perceived quality of the acquisition and whether Macquarie continues to back the company by participating in it will drive the markets response if it happens. My hope this happens once the share price has recovered a little, however I am not holding my breath on that. If not, hopefully I will have a chance to top up at or below the CR price, depending on what they buy.

All IMO, please DYOR and GLATH