Capital Raise?, page-57

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elzephyrus

5,515 Posts.

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14/03/18

09:29

Post #: 31735612
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Originally posted by Winter08 ↑

It seems a very optimistic view imo to be a dollar on day or valuing big at around 275m. One of the problems I had as an investor (and I’m reasonably clued in (CA, ex auditor, masters degrees in finance and accounting) is that On my best day I can only be as good as the info release to investors to make their decisions.

One of the bombs is that the market cap is 500 million not 300m as they hadn’t disclosed a ton of shares approved to others that had yet to be issued. The other is the obvious one of cash receipts I took as revenue from financing (deferred or earned but a receipt from customer who obtained financing to accept an offer of a product with the cash to be amortised to the revenue line in due course).

I bought in at 1.91 average after afr disclosed and then big confirmed they had a financing agreement (paraphrasing ‘similar to other commercial financing agreements and well understood by the market’and on the day the share fell from 2.70. This was me acting on a 300something million market cap and cash revenue growing very strongly and annualised easily to a hundred million that the valuation should be circa $1bn. This as we know now is a fiction

The change of auditors from pkf (firmly at the top of the mid tier but not a big4 as may be expected for listed company) to an unknown auditor at the other end of the country rather than changing to a big 4 should have stopped me and I take a degree of responsibility for this as I knew that this was an alarm bell hitting me on the head but I acted the way I did anyway.

I expect the full year financials audited by Rothesay to be restated. I don’t believe they could have the 9 or 10million revenue that was disclosed for last financial year and suspect this was likely cash receipts in some form but not from a customer as payment for an accepted product. Would be very happy to be wrong.

Back of envelope if disclosures fall out as expected and the revenue is based on customer acceptances and not receipts from financing I think market cap of 50-100million should be fair. So 23c-50c a share.

This would be with ethical honest management which is imperative and they have lost my confidence. I Sank $106k into this and the value for me now as I’m sitting on about $600k gain for this fin year on other shares so I want the crystallised loss. That’s pretty much what bigs value is to me now

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Agree with most of what you're saying, however I think the "revenue" in the Annual Report will be fine.. The "deferred revenue" & cash balance will probably have to be restated though..

BIG Price at posting: $2.22 Sentiment: Hold Disclosure: Held
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