RE: spike24 Oct 2019 11:42
I have weighed up the options here. I had built a large holding in August in anticipation of the 200 restaurants that we were told would be launched in September. 200 a month would have given about 900 restaurants by Xmas and that would have been a major chunk - say 50% - of the total requirement of independent restaurants. It would have been huge.
I was also expecting a large re-rate. As I've said before, most IPO's of good ideas or ideas with potential can 3/4/5 bag quite easily in the first year or so from the IPO price and that is long overdue here and IF they had started signing 200 restaurants per month every month the SP would have easily re-rated to 20p/25p.
That was what I was expecting and what I bought in for. Without that, and with just a handful of restaurants now being added per week/month, that is never going to happen. Even though over time the share price may well pick up from the current lows there is not enough action here to warrant getting involved.
On top of the lack of action there are too many risks for me to put any serious amount of my hard-earned cash on this company. There is, I believe, a risk that Sanj could be removed, there is the risk of further competitors such as Discoeats arriving, and even of the management deciding to sell huge chunks of their vast holdings now things are not really happening. Plus the interims are due out some time and will probably show very little revenue, huge costs and further write-down of assets (assets that only existed in the inflated IPO listing and were never real anyway). Any or all of these could lead to a further drastic fall in the share price and m/cap.
All in all, in my opinion, this is just too high risk with only limited upside.