Yahoo Finance The DXStorm.com (CVE:DXX) Share Price Is Down 80% So Some Shareholders Are Rather Upset
Some stocks are best avoided. It hits us in the gut when we see fellow investors suffer a loss. Imagine if you held DXStorm.com Inc. (CVE:DXX) for half a decade as the share price tanked 80%. We also note that the stock has performed poorly over the last year, with the share price down 43%. More recently, the share price has dropped a further 20% in a month.
View our latest analysis for DXStorm.com
With just CA$508,547 worth of revenue in twelve months, we don't think the market considers DXStorm.com to have proven its business plan. This state of affairs suggests that venture capitalists won't provide funds on attractive terms. So it seems shareholders are too busy dreaming about the progress to come than dwelling on the current (lack of) revenue. It seems likely some shareholders believe that DXStorm.com will significantly advance the business plan before too long.
We think companies that have neither significant revenues nor profits are pretty high risk. There is usually a significant chance that they will need more money for business development, putting them at the mercy of capital markets. So the share price itself impacts the value of the shares (as it determines the cost of capital). While some such companies do very well over the long term, others become hyped up by promoters before eventually falling back down to earth, and going bankrupt (or being recapitalized). It certainly is a dangerous place to invest, as DXStorm.com investors might realise.
DXStorm.com had liabilities exceeding cash by CA$230k when it last reported in September 2019, according to our data. That puts it in the highest risk category, according to our analysis. But since the share price has dived -28% per year, over 5 years , it looks like some investors think it's time to abandon ship, so to speak. The image below shows how DXStorm.com's balance sheet has changed over time; if you want to see the precise values, simply click on the image. You can see in the image below, how DXStorm.com's cash levels have changed over time (click to see the values).
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? It would bother me, that's for sure. It only takes a moment for you to check whether we have identified any insider sales recently.
A Different Perspective
While the broader market gained around 19% in the last year, DXStorm.com shareholders lost 43%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 28% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. You could get a better understanding of DXStorm.com's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CA exchanges.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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