Its Over

Originally posted by 1ronnie ↑

Posted on 16/4/18 (unfortunately can't attach the link as it is too far back)

Another very bad day for Blue Sky (BLA) sp falling 20% and hit another low of $4.03- another reason why people should avoid 'tainted stocks' at all cost. As they say if there's smoke there's likely to be fire. Now BLA has downgraded Asset Under Management (AUM) and NPAT guidance (by some 40%).

While a stock which had been suspended is not necessarily proven to be 'guilty', its very suspension suggest its corporate governance is suboptimal either via misleading disclosure to prop/spruik sp or non disclosure or poor transparency, take your pick. Which means you cannot place trust on management of such companies. Management of such companies are popular amongst HC forum communities because they make frequent announcements designed to prop up sp; such behaviour is rarely observed in companies which already have proven revenue and profit track records where HC forums are rather quiet.

BLA is back on the AFR covers with further write downs and potential cash issues. Its stock is now just $1.74 now from about $14.60 at the start of the year. And I cautioned people from buying into falling knives stocks or tainted stocks , thinking it could be a bargain.
If you haven't noticed, quality stocks take centre stage such as WTC and APX making new highs - dear gets dearer and cheap gets cheaper.

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On 18 Dec 2018, IOT announced that they signed with the largest Technology Distributor in the World, Ingram Micro Inc

Executive Director of IOT Group, Mr. Sean Neylon comments:
“IOT continue to grow their distribution network, the signing of the World’s largest distributor - Ingram Micro, for Europe and the UK, strengthens IOT’s footprint and sales presence in that territory. Purchase orders are already in process and products are being shipped.
IOT are seeing continual repeat orders from current retailers and distributors which strengthens the long-term plan for IOT to grow its sales and distribution network globally.
IOT is on plan to significantly grow its business over the next five years.”

IOT are also pleased to advise that Best Buy US, Superior Distribution, b8ta, B&H Photo and Amazon USA continue to sell out both AirSelfie and ROVA and regularly place repeat orders.

The stock was then trading at 1.1c with a market cap of just $10.1m. They were selling AirSelfie, the first inimitable flying camera.

In 30 Jan 2018 Quarterly Report

Business Update
Since engaging Spring/Cities as Sales Agents, IOT have seen a strong lift in business activity. Repeat orders for the ROVA have come from groups such as Amazon, B&H Photo, Best Buy and first orders for the Air Selfie have been received from B&H, Best Buy and Amazon

Receipts from Customers then stood at $210k.

In its end of Feb 2018 Annual Report, it reported annual sales revenue of $1.48m against a loss of $8m.

The stock drifted to 0.8c ($0.008) which valued it at $10.3m based on an enlarged capital after a rights issue.

In 30 April 2018 Quarterly Report

Business Update
IOT Group Limited (ASX:IOT) (“IOT” or “the Company”) would like to update the market regarding its activities for the 3 months ended 31 March 2018.
The enormous opportunities in the “Internet of Things” space has been proven with the ongoing development of a large market in and acceptance of drones. Whilst IOT has not been able to successfully break into this market to date, the opportunity was appropriately identified early on in development. Sales execution by distributors has been disappointing. IOT is commissioning an external review and report to the IOT Board on the IOT Drones business.
IOT is diversifying its IOT lines of business into areas identified by IOT as having a high chance of becoming major market disrupters. IOT is then searching for and reviewing opportunities in these identified verticals.

By then, it acquired a home delivery and personal courier Run-A Australia and had declared that its drones business had pretty much failed, even though 4 months earlier it boasted the signing with Ingram and repeat orders from Amazon and others.

By 30 April, its stock fell to 0.4c from 0.8c when the earlier Jan Quarterly report was issued.

By early May, it began its foray into bitcoin mining. Today the stock fetces 0.2c at a market cap of $2.55m, 75% loss in just 5 months.

So what is the purpose of this illustration, you may ask:
1. Signing with the largest tech distributor Ingram Micro means nothing – Ingram houses hundreds of thousands if not millions of products and probably churns a large percentage of them out as they get no market traction. So BUD (Buddy Platform) signing with Ingram is in the same boat – success is never assured notwithstanding signing with a big boy.

2. Read the narratives provided the end of last year and even in the Jan Quarterly update and you would hardly guess that their AirSelfie flying camera was going to end up as a ‘wannabe’ and a failure – so take them not with not a pinch but several teaspoons of salt. I would actually be more circumspect of companies (and especially management) using such language to accentuate the ‘enormity’ of their potential ! In just less than 6 months, the product’s failure did not correspond one bit to the earlier confidence in the ED’s narrative.

3. The business was already registering significant losses and yet continuing to issue large amounts of shares – tell-tale sign can’t be good

4.If the business fails, let’s get into something sexy like bitcoin or blockchain- some strategy!

5.The longer you wait for Quarterly to reveal the “truth”, the sp cops a bigger beating. In this case, holders would probably never recover back 80-90% of their capital.