So, QFX needs 100k subscribers, or 4 times its current amount, to break even.
Given that 10k were acquired ex Homescreen, and some $10m has been spent to date on marketing to acquire the rest, this looks like a major drag on DES as an imminent capital raising will be due to fund this.
Analysts will be aware of what a drag this is going to be on DES
Each quarter results in QFX making an announcement stating more subs, greater loss. When will DES realise that the more subs = the more titles = more CAPEX to spend each month, ending in a death spiral.
I dont believe that break even is at 100k - I suspect its much higher than that - given the low number of new release titles that QFX has in stock at any time. And no where do they release their "churn" rate - subs that are leaving due to dissatisfaction at the lack of new release titles
This is a real dog that DES must shed in order to regain SP.
I am a strong supporter of DES's other businesses as I think they represent real short term and long term value
DES Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
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