Good morning!

I had a look at results from Telit Communications (LON:TCM) last night, and updated yesterday's report quite late, so here is the link for that.


Audioboom (LON:BOOM)

Share price: 3.25p
No. shares: 535.6m
Market cap: £17.4m

Results y/e 30 Nov 2015 - these figures are shockingly bad. Turnover for the year was only £192k. The company managed to rack up a £7.5m operating loss. This is complete madness.

The cash pile reduced from £8.9m a year earlier, to £3.1m at 30 Nov 2015. Given ongoing heavy cash burn, the company must be close to running out of cash by now.

It's always jam tomorrow with Audioboom, and no doubt conversations are already ongoing with existing shareholders, to see what appetite they have to pour fresh cash in, to support its continuing cash burn.

This type of business model - heavy cash burn, with repeated rounds of fundraisings, is probably the worst type of investment you can imagine. This type of company very rarely succeeds commercially (although the ones that do succeed, can occasionally do so in a spectacular way). I think it's dawning on investors that Apps seemed a trendy idea a couple of years ago, but in reality are just black holes for cash, usually run by delusional characters who believe their own hype.

I've probably mentioned it before, but if you want a riveting (and relatively short) read, on a dot.com boom & bust story, then "Boo Hoo - A Dot.Com Story from Concept to Catastrophe" (nothing whatsoever to do with Boohoo.Com (LON:BOO) by the way) is an absolutely brilliant book. It's about one of the first dot.com disasters, called Boo.com which had a shoot for the moon type of business model, and it collapsed when the funding dried up. Eventually shareholders tire of putting fresh waves of money into cash-burning businesses.

So the historic numbers for BOOM look a complete joke. However, there is a second announcement from the company today which gives a glimmer of hope;

Q1 Quarterly Update - as the begging bowl is out, the pressure is on to issue some positive news. Therefore in such situations I'm always particularly sceptical about the claims being made.

Nevertheless, this bit sounds quite interesting;

Revenue in Q1 exceeded the total revenue for the full year…

Unlock the rest of this Article in 15 seconds

or Unlock with your email