I'd just written a long rant but then realised just gone through share consolidation......
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Have a look at their balance sheet (FY19) page 25 https://www.seadragon.co.nz/invest/annual-reports/
75.7 million x $0.20 = $15.1m net tangible assets.
They don't have $15m worth of assets, got some more cash from major shareholders, and no major liabilities but since that time they've lost another $5m. While their latest annual report hasn't come out, imagine they would still be cashflow negative on operations.
2019 HY had assets of $14m, but have a look at their assets and again have a look at their income/cashflow. Operations chew up $3.5m of cash....in 6 months - funded by $3.6m from major shareholders for convertible notes.
And not like they are experiencing huge growth in sales that they are funding to get to critical mass, 'buying' customers and where they get some cost efficiencies. Cost of sales still much bigger than revenue.
If you look at their assets, they have inventory, some stock, and a plant processing fish oil in Nelson. If it comes to a situation that you are reliant on NTA (ie liquidation??), then their cash is going to be gone, inventory is going to be sold at a discount and what is a specialised plant like that worth? Not the book value, for sure. In their 2019 HY there is $2.3m based on a lease (which I don't understand)
There is a quite a difference between Net Tangible Assets and Net Realisable Assets. It's more about income/cash they make out of it, and in this case the wrong measure. Look at A2 Milk, net tangible assets of $1.28 (alot of which would be cash in the bank) but trading at over $19.
Sea Dragon aren't going to shut up shop and sell everything - they are going to keep on going, so doesn't matter what NTA is. But if the worst happened, as a shareholder, you'd be at the bottom of the list.
If hunting solely based on NTA, then there are plenty of other fish in the sea......
I've just edited a few comments. Disclaimer, I'm no accountant or expert, but pays to read the annual reports, especially for a company like this.
2019: $9.5 million loss (includes $3.4 million impairment)
2018: $6 million loss (includes $350k impairment)
2017: $6.6 million loss (includes $300k impairment)
2016: $5.5 million loss (includes $4.2 million impairment)
2015: $2.8 million loss
If anyone thinks this story actually changes I'll be surprised.
I believe the thread has firmly established that this stock was not for investment or even for a punt fro the brave souls since the beginning.