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For WeShop I think there was an 18 month lock up period for existing shareholders, which would expire around mid 2023. But I don't think there is an active and liquid secondary market to offload WeShop, and they would probably need to find a buyer. I can't remember exactly what the carrying value is they have for WeShop, maybe in the region of £/$ 1.5-2m. Can they find a buyer, and how big a discount to carrying value will they be taking to offload? Based on current market environment I would imagine quite a large discount if they can actually find a buyer.
all good points raised. A 2nd placing in a few months is really poor and completely unacceptable.
As i said a few months ago whilst the growth is quite good (as long as it doesn't slow) it appears costs are increasing at a similar pace so we are still nowhere near breakeven.
Today's placing clearly proves this is still the case.
A trading update (hopefully a positive one) is long overdue.
What is happening to the WeShop money - it was mentioned that there is a lock in period, however, i have never seen this RNSed.
Great points raised in your post nicwe, as shareholders it would be good to get these directly answered by the board
Does anyone remember the Investor Meets sessions last year ? I am sure there were multiple questions about future fund raises, and the response from memory was that they had sufficient funding from the reverse takeover and fundraise and that the recent loan facility arranged should set investors minds at ease. We are now two equity fund raises later and the language in the most recent RNS has now changed to operating with constrained funds. The additional capital raised appears to be earmarked for the same things that the RTO fundraise was meant to cover i.e. increased effort on sales and marketing, rather than some new opportunities.
Are these red flags?:
1) ARR growth dropped from c79% in 2020 to c59% in 2021. Decelerating % sales growth but presumably increasing costs. It is harder to grow in % terms as the $/£ amount increases, but these volumes are still small in absolute terms. Is the increased investment in sales/marketing/etc. producing a good return ? Ha
2) There is mention of significant increase in interest over 2022, momentum of organic pipeline and several new clients. Those statements are positive but quite subjective. We are 5 months in to 2022 and there has been no trading update to objectively quantify how positive this is in terms of 2022 ARR growth.
3) There is mention of the unique nature of their SaaS solutions and being a leading provider, again positive but subjective. If you browse the websites of their leading competitors you will see that they all offer an automated AI/machine learning proposition, but their customer numbers are 1000+ compared to Brandshield's c130 customers at YE21. One competitor had a debt fundraise of c15m euros, and that same competitor was doubling customers and revenues from a higher base in their early days. Competitors have greater scale and funds (objectively), you can debate the uniqueness of the proposition.
4) The recent 2022 economic climate is probably tough, and this could explain some operating difficulties and decline in share price. The Brandshield share slide was in progress from before the general market shock downturn. Companies should be managing funds conservatively in these times. There was a picture on Brandshield's twitter from the INTA conference in the US, and I counted what I think are 5 Israeli-based staff at the US function. Good use of funds - we will have to see from the trading update ? There was a job ad on their Linkedin page where from the job spec it looked like the key responsibilities were to essentially create a good office environment for the staff, I think I remember writing staff birthday cards being listed as a task. There also seems to be a continuous string of job ads on the Linkedin page for sales and business development people - are these new positions or an indication of churn of existing staff due to difficulties in actually delivering on the sales/business development aspects?
I hope the 2022 trading update dispels some
Indeed jon1234, to me that's poor cashflow management or strategic planning, especially after raising capital in January.
Surely it would have been better to raise a larger figure then, although the market seemed to expect it pricing the share down further since that raise.
Hopefully this is the final time they come to the market for more funding and the cash burn can be turned around from increasing economies of scale, surely the market awareness has increased as a result of the funding they've allocated to marketing.
3 funding announcements in less than 9 months isn't a great look. I'm hoping William currie do still believe and its not a case of keeping the lights on to avoid losing what they've invested so far.
Bought this share years ago and its been a disaster!!!
Dont even bother to look anymore.
TERRIBLE DECISION!!!!
Totally agree, so watch this space?
My only concern is that the aggressor may be able to buy a BRSD at 20p or less which would be a steal.
Agreed. I know people always hype about companies being taken over but I'd think BRSD would be a great target for a cybersecurity company. The ability to defend and attack would be a really compelling offer.
I believe you are correct jc1220 and that is why they are complimentary to the standard cyber security companies whilst offering an extremely important and valid service.
It is also true to add that the BRSD technology is non intrusive and does not require any integration into a companies internal software systems which allows BRSD to sign up brands quickly and start to deliver value almost immediately.
My understanding is Brandshield is all about 'brand protection' not general cybersecurity (or the 'defence' side of things).
Brandshield's target audience is companies who manufacture and sell products but have fakes being sold around the world damaging their brand, taking away sales etc. (e.g. pharmaceutical companies who have knock-off drugs sold in their name, New Balance who have counterfeit shoes being sold across the globe...)
So Brandshield won't protect a company like Tesco from hackers, but they'll source / locate / remove any fraudulent companies, remove the threat of phishing attacks etc.
The growing threat hackers pose to businesses has led Tesco to conduct a cyberattack stress test for the first time, which found that a breach could cost it up to £2.4 billion in fines.
Under a risk analysis detailed in its latest annual report, Tesco modelled various scenarios for a cyberattack where customer data was compromised.
Britain’s biggest supermarket holds a wealth of customer data due to its 20 million Clubcard members. This means that it has to comply with the GDPR penalty framework under which firms can be fined for serious data breaches.
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Under the worst-case scenario outlined by Tesco, it could be fined a maximum of 4 per cent of group revenue. That is equivalent to £2.4 billion.
Yoav Keren
• 1st
CEO at BrandShield
now • Just now
I had a great time at the International Trademark Association (INTA) Annual Meeting 2022 along with several colleagues. It was all about chatting, networking and bringing up ideas around #brandprotection.
All in all a fantastic event - thanks to all those who stopped by for a chat!
Absolutely - valued at 2x ARR is definitely undervalued with the growth rates achieved.
However that doesn't offer much comfort to the share price performance. The cash burn seems to be the big question mark as the market looks like its preparing for a placing in the midst of a savage bear market.
However:
They raised, albeit small, less than 4 months ago.
They also have a debt facility with a leading Israeli bank.
They have William Currie who they could hopefully tap for additional funds like last time. I would hope if they built a position in the teens and the thesis hasn't changed, they'd dip into their pockets again.
I know there's good skin in the game already with the board, but I'd like to see a director buy soon please!
Revenue on an ARR basis came in at $5.22m end 2021 or £4.18m with guidance at $6.80m through $7.25m…
I personally think undervalued but I agree that without decent communication to the market we are likely to fall further.
Unfortunately I think this company was just overvalued. 28mil mcap on under 2mil of revenue is steep, even without small caps and growth stocks being smashed!
However, now it is potentially undervalued. If they hit target ARR for FY22 they'll be on £5.75mil, so just about 2x, and their growth is immense.
Crucial thing will be what their cash burn is and how long the £1.5mil recently raised will last. Hopefully long enough to see out the bear market...
Similar position and echo your thoughts entirely jon
Ive been a shareholder for well over a year now and am sitting on a large % loss. The 7% William Currie stake and the regular contract win updates have kept me invested. I wish they could name the clients - it would make a huge difference to investor engagement with the company. I know that's somewhat out of their control, however I do think the company needs to be doing more investor relations activities. They hosted an investor meet call a few months ago which offered great insight. I'm not sure why they haven't made similar efforts since...or is it that they've sold the vision to William Currie Investments so job done?
got it - thank you
RNS was headed Placing Results and Trading update
could not find it on their web page
https://www.brandshield.com/investors/
either under RNS or financial reporting
Guidance for 2022 ranges from $6.80m - $7.25m - (£5.49m - £5.87m)
That would leave Brsd on an undemanding 2.08 to 1.99 times revenues...
Looks oversold.
Trading update was delivered end of January for 2021.
Revenue was $5.22m
130 clients signed
Strong pipeline of opportunities exist
I could not get BRSD on ADVFN !!!! any more. So I looked further - and I wrote to the Co - as their client - as on the page I could not find their info email. 1. I am an investor into BRSD, 2.BRSD did not publish a financial calendar for 2022. 3. We did not get preliminary results for 2021 4. When can we expect getting full results for the previous fin period and the annual report? Thank you
This continual fall is becoming concerning, I'm feeling this share is now too heavily weighted in my portfolio. Unfortunately I think the current high inflationary environment may be impacting loss making growth shares even more harshly in discounting future earnings, which are currently non-existent here. Earnings meaning profit not revenue or ARR, they do not equal rising share price in an unprofitable growth stock for some blinkered posters.
However, conversely in a high inflationary environment growth stocks probably have the most potential to offset that inflation figure, hope we get some positive figures soon from the company as the macro environment isn't going to provide them!