I got out on the last annual report as the cash burn needed to be replenished by some mug, which is normally us shareholders or sometimes by raising more bank debt to continue funding unprofitable operations.
I took my holding and bought into JAT which has a lot smaller MC. Unlike Bubs though they recently came into profit, their turn over is alarmingly almost the same revenue as Bubs and they are growing rapidly using their FMCG relationships to offer products outside of dairy and goat formula to help protect the shareholders from mono platforming. They are signing new contracts every few weeks and just like Bubs they too require an $8.5M capital raise, however theirs is for a 14m manufacturing facility in Melbourne to increase the tinned formula margin.
My take is to get out of Bubs while you still can, its run on bank induced hype similar to lithium and others that I feel stole the farm and mine off unsuspecting Australians, I pray you weren't caught up in that fiasco.
You now the drill they trap you in at an inflated price it drops down on you and you won't take the loss, then they callously kick the seat out from under you walk away shorting you and just let you hang in the breeze all while you are chocking and wondering were the buyers all went, sadly you will be hoping for a turnaround, have you got 5 years?
Bubs is marketed really well to shareholders by super slick graphic design, well no guesses who taught them that as they are the offspring of political elites who by all accounts are the leaders in directing the heard to the abattoir. (Krudd anyone)
This is why they are so well presented by the banks and their interconnected promotional machine, they hype the shite out of it and pull you on in. The fundamentals show years of churn before they will even look like turning a profit and until they do well they of course will be diluting your holdings to keep themselves in those well paid jobs and dishing out free shares to sell back to you on market in order to buy another upmarket home.
Lets face it, It's stacked against you out there with Citi, UBS and the rest of the big four crocks, shorting you, then there is bot trading, insider trading by substantial shareholders that are privy to financial information well before you ever get your eyes on it and then they pump or dump for way longer than the average Joe could ever endure.
But this one unfortunately will take far too much of your mental health before it has another rerate.
I get that its in growth mode and thats the risk that you need to be comfortable with, but if it lacks the fundamentals the market will eventually wake up to it and treat it harshly.
This business is way over valued when compared to JAT, and now it has the added problem of competing with Bellamy's Chinese takeover which should never of happened BTW.
I'll buy in again at 39cents with the earnings from JAT when it hits 40cents.
Sorry for the realty check, do think about this one.
All the best from Changgu Bali.
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