The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
A crap company run by the industry’s losers. Langworthy along with Simon Cole were the two that ran this once promising company into the ground. Sheer incompetence and personal greed. They both feathered their nests nicely. The board are utterly incompetent too. Just look who are on it. Serial failures.
The creative part of the business creates content (radio shows etc). It’s a legacy business unit and has been declining year on year. It should have been sold off years ago whilst it still had some value but that would have made 7dig’s massive revenue drop look even worse. New separate website may be in preparation for a last ditch effort to sell it off to generate some cash to support the rest of this ailing business. Just prolonging the inevitable in my view
There’s a reason virtually no one competes with 7dig. Others looked at this market and long ago realised its miniscule. They had smart leadership and management unlike this mob of repeat offenders. In a tech market under pressure this rubbish is only going in one direction (no pun intended)
Amazes me that some people remain optimistic about this company. 3 years ago its revenues were over £18m, three times what they are now. In the intervening time they have burnt through about £15m of cash raised from share issues and now only have £200k left. They have won a few deals with interesting companies, but they are not valuable contracts as we can see from their stagnant revenues. The business model doesn’t work. The profit goes to the record labels not to the delivery channel that 7dig is. Just peanuts for 7dig. There is no interesting money in this business for 7dig. It will certainly never scale like some people seem to still believe. Also, look at the balance sheet. Their short term trade payables are 3.5 times their receivables. This company is in real trouble, again.
Despicable Liars. Paul Langworthy - failed CEO, Tamir Koch - charlatan Chairman. Together with Simon Cole, a trio of rubbish.
The problem with this company is that it doesn’t have the potential to scale revenue quickly. Even with a couple of wins with sizeable customers who have a large number of subscribers, 7 dig only makes a pittance out of them. The other customers are all no name startups with no volume. That’s why 7dig always talks about reaching breakeven rather than revenue growth. Breakeven might be achieved this year but only because they have ripped massive cost out of the business not because of stella revenue results. So being invested in a 7 to 8m revenue company with small revenue growth < 10%, even if it is at breakeven, hardly sets my heart a flutter!
Aim listed companies may not divulge information to institutional investors that is not made available to the public at the same time. So unless the numbers were published to all at the time, institutional investors invested blind based on the same hype that we invested on.
Great analysis. Thanks for putting In the effort to crunch the numbers. The big take away for me is that the revenue for the streaming business continues to shrink every 6 months. Hard to see that if you just look at the hype on the first page of the interim update RNS.
No need to be condescending. Rather than having a one eyed view that is closed to other opinions, suggest you apply some critical thinking to both sides of the debate and then reach a considered conclusion. If you are only interested in hearing your own opinions echoed back at you then I won't waste my time with you. Nevertheless, I wish you good luck with your investing and genuinely hope you make some good money with this stock.
Can you name any big, growing 7dig B2B customers that have an audience anywhere near the size of Spotify and pay £9.99 each? With 7dig, It's all small fry music plays with tiny or small customer bases compared to Spotify using the music service (eg Jazzed). Half of them fail and disappear and probably don't pay their bills. With the ones that succeed, 7dig gets a much smaller revenue share than Spotify does. So if Spotify loses money why do you think 7dig will be able to do it better?
Sorry, I don't know who EUA is. You may have me confused with someone else. They took 500K at 18% interest!! This is on top of the £5m cash they raised only 1 year ago, which they must have burnt through or they wouldn't need 500K at 18%. Their cash burn rate was huge, a lot more than 750K per year. I'm sure there have been big cost cutting and hopefully this is enough to get them to a cash neutral position without killing the ability to sell and deliver, but until there is proof rather than promises (which they already slipped another 2 quarters) I will remain cautious. But fortune favours the brave, so buy up if you are so inclined.
I hope you are right of course. Would be good to see a deal of significance announced.
It's not a "return to profitability" because it has never been profitable. I remain cautious as these recent rises are on the back of an RNS about the dropping of potential legal action rather than winning any significant business. Fact is, the stock was not being held back because of the potential legal action, it was being held back because it has lost many, many customers and only announced a few renewals of existing customers and one minor scale new customer. So this has all the makings of a false dawn. Until they announce a major new customer win of substantial deal size, I think they are at risk of running out of cash again. I wish you luck but caution is warranted.
I can't see any sustainable hike coming. Yes, the company was just barely and miracuously saved from Simon Cole's "rein of ruin". However, the £5M raised has already dissipated in less than 8 months. They even had to borrow another £500K at an eye watering interest rate of 18% per annum. Clearly no bank would touch them, so they had to borrow from the sharks. Claims they will be profitable by mid year? Unlikely and if they are it will because they have completely stripped the company of costs including the people able to deliver the growth and to continue developing the technology in a fast changing and competitive space. When the numbers come out, I think we will find there has been a huge drop in revenue compared to the previous year and very little new business signed. They touted a deal with Fender, but that was only a minor upgrade to an existing customer.
https://www.rollingstone.com/music/music-news/streaming-music-down-coronavirus-971059/
Rolling Stone magazine reporting significant drop (somewhat counterintuitively) in streaming since lockdowns. For B2B music streaming companies like 7Dig must be even worse with bars/restaurants/shops closed that would normally make use of their service though businesses that use their catalogue.
Sounds like they have already burnt through the £5m they raised last year on top of the £12M the year before. Not much to show for it,
I cannot see any reason to be positive about this company. It has huge negative equity driven by current liabilities that far outweigh current assets (see last annual report). Even with all the cash raised it doesn't scratch the surface of fixing this. The market it is in is not the Spotify market, it is in a far less interesting space that will never reach a mass market and is highly unlikely to become cash flow positive. There seem to be many people that think TK is the saviour here. He provides cash for now, but his other business (eMusic) is also a mess. I know someone who worked there and they say there is lots of hype but little substance. Revenues have plummeted since it was acquired and is losing money too. So as a former investor that was burnt by this in the Simon C days, it is a "raise cash, fund lifestyle, dream up new BS to raise more cash" cyclic kinda business in my opinion.
Still many unknowns. Would like to see more news on acquisition progress.
So, what do we know about this hapless company? Reading the press releases, we can see that the company was a financial train wreck when Simon Cole departed. The company had not been able to retain its customers (MMS etc.). This would have left the company with a cost base far greater than its revenue (already posted a £12M for last year before the loss of customers. New management came in, sold off bad assets, cut significant costs, raised enough cash to save the company short term, and then left after only 3 months (why did they not want to stay after completing the fundraise?). New controlling investors promised another £4.5M in funding by end of July. So far nothing, but the recent PR suggests it is imminent even though previous press releases claimed the company would be out of cash at end of July. Regardless, the delay suggests the fundraise has been difficult. Company must be surviving (or not) by not paying suppliers. So many red flags here, it could be the people's republic of China.
This could be good for short term speculators, but not good for the business. JA and JH are high calibre company builders who saved the company from bankruptcy and without them where is the experienced leadership? At least Simon Cole's pillaging days are over, but a long road ahead to turning this into a winner.