Revisiting - What Am I Missing? Here's my original post - https://www.stockhouse.com/companies/bullboard/v.scr/thescore,-inc?threadid=24766823
I decided to revisit thescore when I noticed the price was below $0.25. I see people talking bankrupcy on here - which is obviously complete nonsense. Unless they burned $19 million since June, this company is solvent. But that doesn't mean it's a good investment. They'll need to raise more money soon or solvency becomes an issue in the next year or so.
I continue to believe thescore is a poor investment, but that's due to my style of investing. This is a company that loses a ton of money without a clear path to profitability. The best opportunity they have (esports) is a labour intensive business (staff of over 50 at the moment) when 'investors' seem to think this is a software company. It's more of a traditional media company and should be valued as one. They do not have the laborforce/margins of a software company.
I fully recognize I can be surprised - if Disney comes in and decides it's easier to buy an esports business than build one. Or if they decide for some strange reason that ESPN is desperate and need thescores users. But that's it in my opinion. That's the chance I'm wrong. If someone come in and bails out management with a purchase. From my experience that's a poor way of investing - hope. Hope generally leads to disappointment.
So here's my original post. It's only been 6 months, but I'm looking pretty right in my assesment. I'm not declaring thescore a scam. I do think Mr. Levy is paying himself/his family a unreasonable amount of money, but there is nothing illegal about that. So own this stock/company if you want. It could work out! Just do so with open eyes.
My original post/questions below. Would love new comments -
Can someone please explain to me how this company gets to a profit next year? What am I missing?The operating loss was $4.3 million on $5.8 million in revenue. Personnel costs are over $5 milion when you account for a tax credit. Levy said they plan on hiring more people - 10 to 15% more - in the next 6 months.
They burned $9 million in 6 months after raising $25 million @ .67 a few months ago! They will need to raise more money and the terms will be - if I consult my magic ball - $0.22. Maybe $0.25 but I assume people will want good terms for this leaking ship.
WHAT AM I MISSING HERE? This isn't facebook. They don't have a weath of data to sell to advertisers. They sell a platform to advertisers. It's a decent media business, but this isn't a tech startup like WhatsApp. They don't have the data to sell. Who cares if I spend 5 minutes looking up hockey scores? How does that help a company sell to me?
They lose so much money. The potential seems limited.
What's the bull case I'm missing? And don't just say ESports. Tell me how esports will get them to profitability soon. I like esports, but they don't seem to be moving fast enough and the big competition is moving in.
The fantasy sports thing was a waste of millions and never had potential. Chasing a silly market because they saw someone else making money.
https://www.theglobeandmail.com/report-on-business/the-score-scores-financing-for-app-development/article11529597/
https://www.thestar.com/business/sportonomics/2014/04/21/sportonomics_score_mobile_app_growing_fast_next_up_turning_a_profit.html
People have been looking for a profit for years now. I believe in 2012 we were told it would take 5 years to be profitable.
According to the Management Information circular from November 2015 John Levy paid himself over $3 million in the past 3 years. He paid his son about $1.5 million. Not bad for losing the company millions upon millions of dollars.
I don't understand this stock. I don't understand this company. I don't understand the shareholders.
I'm not short this stock, but I've been telling anyone I could to sell over the past 2 years.
Please tell me where I am wrong. Politely. I'm not short, nor is this a attack. I just don't get it.