Australia's largest stock trading and investment forum Australia's #1 stock forum

BUD

Click for more information

0.00%

0.6¢ buddy technologies ltd

LIFX Review, page-35

First 35 Last

Share
Profile

Follow
gallea

2,577 Posts.

298

19/10/21

15:46

Post #: 56910843
Share

Originally posted by Kmtw: ↑

DM is misleading you into believing they have stock to sell and make money. The current inventory is collateral for the revolving line of credit with PFG. If they want to maintain the loan, they need to maintain enough inventory to satisfy the loan terms.

For example, say the loan was on an LVR of 50%. They would need to hold at least $20m of inventory to draw down the loan in full to $10m. If they sell $10m of inventory at a 35% gross margin then of the $13.5m cash received, only $3.5m could be retained by BUD for future operations.

This wouldn't be an issue in a world where you could readily manufacture your products. But because BUD can't get enough chips, this $3.5m quickly disappears in operational costs to keep the lights on.

Expand

Do you spend as much time analysing and commenting on every stock on the ASX that you don't hold or does BUD have a special fascination for you??

BUD Price at posting: 1.7¢ Sentiment: Hold Disclosure: Held
6 Upvote

0 Great analysis

Reply

Top Stories

MGU

New results confirm Buena Vista's iron grades potential

Trimmed CPI figure provokes market jump of 1%, but inflation pressures remain a reality

KOB

Koba, formerly a cobalt player, gears up to become newest explorer in the uranium state: South Australia

1CG

One Click Group jumps 4% after ending quarter with $2.4M in cash; $1M in revenue and 150K+ users on board

MRC

Mineral Commodities to shut down Tormin mineral sands project as oil spill contaminates beach

First 35 Last

Add BUD (ASX) to my watchlist