@Sanami - are you still keeping your spreadsheet/graphs updated? Grateful if you could share
EV dropped to around $40m in Feb 2023 (market cap was higher, but the company held about $18m cash at the time). Now that cash on hand is effectively cancelled out by debt, today's EV is about 25% higher than it was back in Feb. It doesn't mean that the price will inevitably drop to 3c or even continue to trend lower, but it's a recent precedent of how the market has recently valued the company.
When a company is burning cash and cannot demonstrate revenue growth, there's always heightened risk to the downside, especially in this macro climate.
Those buying near the Feb lows probably thought that they were getting a bargain. Six months down the line, what has changed? $12m+ net spend, limited visible signs of IP development and progress, and no assurance from management that they are on-track to be cash-flow positive any time soon. The 1H2023 financial update is not going to look pretty.
The counter argument is that the money has been spent/invested well with a positive ROI expected over future years, that IP/games remain on track and will launch this quarter and next, and consequently this will bolster revenue and result in profitability.
Based on past performance and the empty promises from management, the probability of the counter argument eventuating seems unlikely. I'm expecting the next leg down to commence, as the market prices in a declining revenue trend (which invalidates the "explosive growth" story), game development/launch delays (maybe even more cancelled projects) and dilution from an (impending?) cap raise.
@FingerLicking - It'd be good to get your take on how you see the rest of the year unfolding and the probability to the upside (or downside?) in view of the recent quarterly results, which again missed your expectations.
ICI Price at posting:
4.0¢ Sentiment: None Disclosure: Not Held
