Interesting chart of nearly (or is it all?) of our so called "growth" companies. It certainly shows how their capital needs keep growing and blossoming ;).
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It is interesting until you read the fine print:
"... analysis is not adjusted for forecast revenue growth or anticipated burn rate" which imo makes the data pretty much worthless,
and in his own words (tweet) "What listed NZX companies will need to raise capital this year?" ... it's a question, implying that even he is uncertain of the validity.
Pretty charts though shame about the analysis, imo.
That's a bit harsh - isn't it? I think the assumption that parameters (here - cash burn) stay in the year to come as they have been is a legitimate starting position for any analysis. Sure - in reality things always change. Sometimes they improve and often they deteriorate - i.e. anybody's best guess how many of these companies need regularly fresh money (and how much).
Still think that a graph like that should be attached to every IPO document of another startup. Many investors realise only too late that their initial IPO cash injection is often just the start of a long series of cash injections ... without guarantee of positive returns.
If we look back at WYN - they don't say when they "plan" to be cash positive ... and the analyst assumptions I have seen put this date for WYN further than 3 years into the future (or is it never-never?). This means that they will need at least another couple of CR's after this one before they can stand on their own feet.
And fair enough - you need to spend money before you make money, but I still think they could make this "need" a bit more visible to potential investors. Always better if people commit open eyed.
The full Note is quite clear how its calculated and yes it does have that bit you quoted.
So a good snapshot in time and indicative of what might happen (hence the ?)
Forecasts probably would change amounts / time frame but jeez they only forecasts and we know what they are like.
Don't be so miserable Baabaa - the worlds not that perfect
Sure, if you think it's harsh that your prerogative, however imo the Note does say "not adjusted for forecast revenue growth or anticipated burn rate" which would have been easy to incorporate and provide a more thorough analysis. Maybe he left it out because he didn't have forecasts or anticipated for all of the companies. Without that additional data, the chart has little value except to say that the companies are likely, 'at some time' to require capital raising.
WYN: Trading Halt of Securities
9:50am, 17 Feb 2016 | HALT
Memorandum
To: Market Participants
From: NZX Client and Market Services
Date: 17 February 2016
Subject: Wynyard Group Limited (“WYN”) - Trading Halt of Securities
Message:
NZX Regulation (“NZXR”) advises that, at the request of the company, it has placed a trading halt on Wynyard Group Limited ordinary shares (“WYN”). The trading halt was placed at pre market open this morning.
The trading halt has been put in place pending the release of an announcement to be made by the company.
Please contact Client and Market Services on +64 4 496 2853 or cms@nzx.com with any queries.
ENDS
Attachments
I was hoping for small increase this morning and I was seriously considering selling my shares, even though I would have taken a lost. I would have lost about 12% in value at yesterday closing price. Hopefully the news is promising, even though I'm doubtful about any positive announcements after the halt is lifted.
So thought on the halt?? Capital raised at market price perhaps? We did see a hefty rise the last 2 days - so maybe 'leaky ship' - or more likely just the rally of global markets.
Cancelled the special meeting because overseas parties no longer interested at $2 placement.
Very good in my books. Looks like the mysterious overseas investors wanted in for too cheap. Now WYN needs to refocus to do it on their own. As I think they are perfectly capable of this, I consider this a big WYN. No dilution and no distractions. Now go forth and grow like anything!