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Real-Time news about Verdant (London Stock Exchange): 0 recent articles
|mero: I think the prospect of bid is more relevant than the fundamentals. Rumour will drive the share price until the bid issue is resolved.|
|manfromsony: Lovegod... What will make the press stand up thus pushing the share price north? Plus who is Gadge? Can you develop your last postering please!
|aggressive saver: Virtual Internet just recovered 0.5p. When they make the final anouncement later this afternoon the share price may go up double the amount again. Dont know what to do now about topping up, although the brave normally win.|
|aggressive saver: The share price does not represent the takeover possibility, its what I thought the shares would go up to in a few days fundamentaly. Although I would of taken a profit today if there was not this news of a takeover.|
|goodfella: I was intrigued by a poster on e trade who questioned the rapid decline of Virtual internet share price and having looked into it the fall seems perfectly justified and even at these levels could still be more than 100% overvalued.
VET is in the business of registering Domain names and creating and managing web sites for clients, and with the recent collapse of Boo.com, the realisation is hitting home that Business to consumer web sites for everything are not going to work and therefore I would forsee a decline in the rate of web site creation and domain registration.
As a loss making company I cannot see how VET can maintain a compound growth rate and this would be reflected in the next accounts.
In this present bear market as I am actively looking for stocks to short this seems a prime candidate.
They still have a market cap of £124 million which is roughly 60times
After 4 million losses last year it will be some time in the future
before they are profitable and with potentially net cash of only 65pence per share they could quite easily reach a level of £1 or less
Looking into this further it appears all but £15 million of
the cash which was set aside for acquisitions was already spoken for.
and also more worrying in the recent report it was stated that apart from the CEO none of the other shareholders were subject to any lock in arrangements and could dump their stock at any time.
I can empathise with your reaction that the fall from £9.90 to today's
levels seems overdone but this is clearly an example of another stock
which got ahead of itself in the tech frenzy and at £9.90 had a market
cap of approaching 450 million.
The highlights of the fundraising were
The Directors intend to use the proceeds of the Placing in developing the Group's existing business and for acquisitions. Within the existing business, the Directors intend to spend approximately: #3.0 million on the Group's infrastructure, including new web site hosting equipment; #1.5 million to fund the costs of additional administration, sales and technical staff; #3.5 million on advertising and marketing costs, principally within wholesale domain-based services and directed mainly at the corporate market; and #2.0 million on general corporate expenditure, including supporting the establishment of the Group's existing overseas operations.
The more I look at this the worse it gets .
I note that the 1999 accounts show sales of 2.07 million and losses of 4.43 million which would produce a cost of sales and overhead of 6.5 million.
From the companies statement above it appears that the 2000 accounts will show a further cost of sales and overhead in order to fund expansion of 10 million and at a rough guess I would project the total for 2000 as circa 14 million.
Should we be generous and assume that they are able to double sales in 2000 to 4.14 million this would
still leave us with a loss for 2000 of just under 10 million.
The fact that the certain shareholders including the CEO placed almost 700,000 shares at 9.00 on his own account in the recent fundraising also gives cause for concern.
Since it started its decline the chart shows little or no support at all and with average daily volume pathetically low and on some days actually zero it appears every sell will force the price down further.
As it appears it may be some years before they are into profit I cannot envisage many buyers for this stock and as any news releases by any company seem to have negligible upward movement on any stocks in the present market I really cannot see what will produce any sustained buying.
Buyers in today’s market are looking for growth or value or daytraders looking for volatility and IMHO at present VET does not fall into any of these categories.
No investment advice offered or intended.|
Verdant share price data is direct from the London Stock Exchange