I've decided to bite the bullet and just concede I made a very...

I've decided to bite the bullet and just concede I made a very bad decision.

I have realised a big loss and it sure hurts.

Led on by exciting news and hope, I thought I was onto a good thing.

Some of my concerns are below that influenced my decision.

From the last quarterly report. (June 2022)

"The strong investment in global infrastructure, people, partnerships, and product development has led to a

final cash position of ~$15 million, up by ~136% compared to June 2021 ($6.3M)."

To me the choice of wording gives the strong impression that the reason we increased in cash is because the business is generating cash?

Fact: The only reason we have 15M in the bank is because of the earlier capital raising.
Cash is dropping QoQ, so to gloat about it increasing by 136% is crazy wrong.

Red Flag

Then it gets better. In the annual report (YE 30 June 2022) we read.

"The Company today has $21 million in total liquid assets"

This is CLEARLY attempting to embellish the cash situation again, focusing now on the higher total liquid assets instead of the cash position.

Red Flag

The above 2 red flags force me to question what else are they embellishing? The manipulative slant is very concerning and reminds me of a dodgy
sales person skillfully bending the truth to make things sound better to clinch the sale.

Objectives of Directors

Directors of public companies that do not make a profit like Vection are very much like salespeople to investors.

They have to consistently sell the exciting story to investors to allow the company to continue to pay employees and very importantly their own director fees.
The existence of their very jobs are dependent on regular capital raises from YOUR money as investors.

They naturally want play on hope (within the ASX rules) to keep the price as high as possible to get the most longevity out of a capital raise.

They all portray genuine concern for investor returns I'm sure, but I don't think they care about investor returns anywhere near securing their own pay packet.

Capital Raise

I think they will do another capital raise in 7 months max.

If you look at the balance sheet 30 June 2022 and the NTA they really only have about 8M in leeway as at 30 June 2022.

If the 2M or so in negative cash flow continues per qtr then we have about 12 months from 30 June, but management never take it to the edge like that, so I think 9 months is a good guess minus the 2 months we have already had gets us to the 7 months.
This is of course guess work, but I think it will be about right.

There was also a convenient and very large drop in provision liabilities in the order of 8M or so.

With out this provision drop they may have had to raise already.

Europe

There is still a huge percentage of revenue coming from Europe.

Fact: There is a major energy crunch which will likely negatively affect all businesses in Europe.

My opinion is that it would be amazing if Vection kept it's Europeans revenue even flat in this environment.

Webex app

The Webex app news is non existent.

The fact that nothing has been said about this after 2 months says it all.

I'm sure they don't want to update investors with bad news, and since it's not material, they don't have to.

Disclaimer.

I have no intention of buying this back if the price goes lower.

These are my genuine thoughts which you can think critically on for yourself.

I probably won't post much from now on as I'm not a holder anymore.

Good luck. DYOR