Yahoo Finance Such Is Life: How CanadaBis Capital (CVE:CANB) Shareholders Saw Their Shares Drop 60%
CanadaBis Capital Inc. (CVE:CANB) shareholders will doubtless be very grateful to see the share price up 90% in the last quarter. But that's small comfort given the dismal price performance over the last year. Specifically, the stock price slipped by 60% in that time. So the bounce should be viewed in that context. It may be that the fall was an overreaction.
View our latest analysis for CanadaBis Capital
We don't think CanadaBis Capital's revenue of CA$283,516 is enough to establish significant demand. We can't help wondering why it's publicly listed so early in its journey. Are venture capitalists not interested? So it seems that the investors focused more on what could be, than paying attention to the current revenues (or lack thereof). Investors will be hoping that CanadaBis Capital can make progress and gain better traction for the business, before it runs low on cash.
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 the company needed to issue more shares recently so that it could raise enough money to continue pursuing its business plan. While some such companies go on to make revenue, profits, and generate value, others get hyped up by hopeful naifs before eventually going bankrupt. CanadaBis Capital has already given some investors a taste of the bitter losses that high risk investing can cause.
Our data indicates that CanadaBis Capital had more in total liabilities than it had cash, when it last reported. That put it in the highest risk category, according to our analysis. But with the share price diving 60% in the last year , it's probably fair to say that some shareholders no longer believe the company will succeed or they are worried about dilution with the recent cash injection. You can click on the image below to see (in greater detail) how CanadaBis Capital's cash levels have changed over time.
It can be extremely risky to invest in a company that doesn't even have revenue. There's no way to know its value easily. Given that situation, would you be concerned if it turned out insiders were relentlessly selling stock? I'd like that just about as much as I like to drink milk and fruit juice mixed together. You can click here to see if there are insiders selling.
A Different Perspective
We doubt CanadaBis Capital shareholders are happy with the loss of 60% over twelve months. That falls short of the market, which lost 13%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. Putting aside the last twelve months, it's good to see the share price has rebounded by 90%, in the last ninety days. This could just be a bounce because the selling was too aggressive, but fingers crossed it's the start of a new trend. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for CanadaBis Capital (of which 1 is concerning!) you should know about.
Of course CanadaBis Capital 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.
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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