Sure, depending on your risk profile. You can go to the races and put your money on the rank outsider. A lot of people do so, and sometimes they win.
There is no issue with taking a gamble, as long as you realise that is what it is. Putting together a spreadsheet which shows how much money they will make under fanciful circumstances is all very well, but the numbers you are talking about, Bells, are absurd. Increasing sales from the current $30K per month to $5m per month inside the next 20 months? They would have to increase sales at $250,000 per month, every month, to achieve that. They would have to sell to a significant percentage of the Australian population and retain them all as paying customers. It is just not going to happen.
There is no indication that sales will increase even modestly. iWebGate have over 10 years of history with a product which does not sell. It did not sell when it was called GhostNetwork, it did not sell when it was called VirtualServicesPlatform, it did not sell when it was called Launchpad, and I see no reason to believe it will sell now it is called Workplace Suite. (Or is it now called Virtual Segmentation Platform? It is a shame rebranding isn't the answer!) Prior to their IPO they survived with loans and grants, and, following their "reverse takeover" float, they have extracted another $10m from shareholders. Sooner or later the game will be up and the well will run dry. Given how long this last raise took and the few month's money they got from it, they might just about be there.
So, worth a gamble? Maybe. But worth an investment within the range of most investor's risk profiles? No. That is why the share price is tanking. People are understanding the story and fewer and fewer of them believe it.
IWG Price at posting:
16.0¢ Sentiment: None Disclosure: Not Held
