Thanks all, appreciate the extra comments and glad my post was taken in the right spirit. Nothing extra to say to
@tinhat or
@Eggboy, I think you've both hit the nail on the head. Also agree with
@Mahnamebob however one point I'd make: yes it's absolutely true that a company in early-stage growth needs to spend cash to grow, get scale and so on; nobody can expect you to turn a profit in your first quarter (or year). But turning back to the SOI matter, companies with billions and billions of SOI can be an indication that they have been stuck in the 'growth' phase for too long without actually delivering. This kind of company is what the writer Jason Zwieg calls an 'OPM' company: something operating on Other People's Money. I think the reason they get away with this is because there is generally always a fresh wave of investors who come along and replace the jaded ones. That to me is one explanation for why the high SOI companies have so much supply, and you see constant share churn (which people mistakenly believe is "big whales holding us back" etc). Let me be clear:
this is not am attempted dig at CRO, I have *no idea* how many capital raises they've done, all I know is the SOI is up towards the 3b mark. So before I even start my DD, I see that fact, and start making some possibly negative assumptions. I'm probably not alone in that regard, which is why SOI does get raised quite a bit on HotCopper, to some people's chagrin.
One last comment I will make, specific to CRO, is this: the best thing you can do as a retail investor is to get a more robust understanding of financial reports. It's all too easy to get fixated on the narrative in the quarterlies. I mentioned this in a recent post on CRO found here:
https://hotcopper.com.au/posts/57142627/single. I say this only because one thing I've noticed both here and on Twitter is an extremely high level of regard for the CRO 'GOAT' etc. That's great - you want to trust your management given you've just handed them your cash - but as an investor you also need to
critically analyse the company
without blinkers on. This is hard but absolutely necessary. One way to do this looking at the numbers divorced from the narrative spin. Remember, every ASX small cap has a management team who say all the right things, speak with confidence, know the right buzzwords and apparent 'clues' to drop, etc. That is why financial statements like the 4C quarterly cashflow are so vital: it's the figures in the cold hard light of day. If you're not too hot on this stuff, an excellent place to start is on YouTube, '
How to Analyse a Cash Flow Statement' by Daniel Pronk. This guy does a great job of talking through the basics, he also does Balance Sheets and Income Statements (I have no link/affiliation, I just stumbled across his stuff a while ago). I will leave it there and revert to 'lurker' mode but hopefully this is useful. I'm a retail investor like most of you and HotCopper, used properly, can be a great place to learn and share. Happy Weekend. Cheers
