Taking the occasional loss comes part and parcel with investing on the stock market. Unfortunately, shareholders of BIG Blockchain Intelligence Group Inc. (CNSX:BIGG) have suffered share price declines over the last year. To wit the share price is down 56% in that time. BIG Blockchain Intelligence Group hasn't been listed for long, so although we're wary of recent listings that perform poorly, it may still prove itself with time. The falls have accelerated recently, with the share price down 32% in the last three months.
With just CA$110,327 worth of revenue in twelve months, we don't think the market considers BIG Blockchain Intelligence Group to have proven its business plan. This state of affairs suggests that venture capitalists won't provide funds on attractive terms. So it seems that the investors focused more on what could be, than paying attention to the current revenues (or lack thereof). It seems likely some shareholders believe that BIG Blockchain Intelligence Group will significantly advance the business plan before too long.
As a general rule, if a company doesn't have much revenue, and it loses money, then it is a high risk investment. You should be aware that there is always a chance that this sort of company will need to issue more shares to raise money to continue pursuing its business plan. While some companies like this go on to deliver on their plan, making good money for shareholders, many end in painful losses and eventual de-listing. BIG Blockchain Intelligence Group has already given some investors a taste of the bitter losses that high risk investing can cause.
When it last reported its balance sheet in March 2019, BIG Blockchain Intelligence Group had cash in excess of all liabilities of CA$10m. That's not too bad but management may have to think about raising capital or taking on debt, unless the company is close to breaking even. We'd venture that shareholders are concerned about the need for more capital, because the share price has dropped 56% in the last year. You can see in the image below, how BIG Blockchain Intelligence Group's cash levels have changed over time (click to see the values). You can click on the image below to see (in greater detail) how BIG Blockchain Intelligence Group's cash levels have changed over time.
In reality it's hard to have much certainty when valuing a business that has neither revenue or profit. Would it bother you if insiders were selling the stock? I would feel more nervous about the company if that were so. You can click here to see if there are insiders selling.
A Different Perspective
BIG Blockchain Intelligence Group shareholders are down 56% for the year, even worse than the market loss of 1.7%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. With the stock down 32% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. If you would like to research BIG Blockchain Intelligence Group in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.
Of course BIG Blockchain Intelligence Group may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CA exchanges.
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