The discussion on this share is as dichotomous as ever. No one...

The discussion on this share is as dichotomous as ever. No one is talking objectively.

If I earned AUD $1 for every time investor wrote "almost profitable", "almost EBITDA positive", and so on, on this forum, I wouldn't need to invest in the share market anymore, I'd be living on my own island.

What I read from the announcement:

1. Reduced revenue projection

"Due to ~ 85% of the U.S. population currently in lockdown (stay in place orders), many brands
(not specific to EN1) have temporarily reduced their marketing budgets, as consumers cannot
transact with them at the moment. As a result, the ad exchange did not see demand ramp-up
as usual in the last days of the quarter. April starts a new quarter and typically, demand is
lighter in the first three weeks of the first month"

The above highlighted comment is irrelevant - all notions of "typical" are out the window for the rest of the year - the coronavirus is taking us into the deepest recession since 1929.

We may have increased revenue now, but we will have increased dilution (exceeding 1 billion fully paid ordinary shares by the end of December 2020) and increased costs due to financing and all the weird and marvelous ways the management team will be funding themselves this year.

And anyone expecting the revenue to continue to increase throughout the year is clearly living in a pre-coronavirus world.

2. MORE financing needed because the ever elusive profit is still evading the management team

"Management has applied for several new
financing opportunities; none of which involve equity. Management is currently working with a
large tier-1 Australian bank in the application process (3-4% APR). Additionally, EN1 qualifies
and has applied for U.S. SBA loans under the CARES Act, with UMB Bank U.S. (2-3%)"

Wow, "no equity"? What a gift. I'm sure our existing debts will cause us to issue millions of shares this year anyway. That's excellent. So the shareholders will just have to chase profit a little longer as they pay the interest on any additional loans EN1 decide to sign up to. Fantastic.

It would be good if at least one announcement over the next 10 years reads "Management has generated huge after tax profits this quarter as cash flows from several proven new profitable business opportunities flow in" as opposed to "applied for several new financing opportunities".

Declaring that the management is losing money and is applying for more loans shouldn't be viewing positively - and the drop in share price reflected that.