In This Article:
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
It's not a secret that every investor will make bad investments, from time to time. But serious investors should think long and hard about avoiding extreme losses. We wouldn't blame Cryptanite Blockchain Technologies Corp. (CNSX:NITE) shareholders if they were still in shock after the stock dropped like a lead balloon, down 75% in just one year. A loss like this is a stark reminder that portfolio diversification is important. Cryptanite Blockchain Technologies hasn't been listed for long, so although we're wary of recent listings that perform poorly, it may still prove itself with time. And the share price decline continued over the last week, dropping some 10.0%.
View our latest analysis for Cryptanite Blockchain Technologies
Cryptanite Blockchain Technologies recorded just US$1,106,362 in revenue over the last twelve months, which isn't really enough for us to consider it to have a proven product. You have to wonder why venture capitalists aren't funding it. As a result, we think it's unlikely shareholders are paying much attention to current revenue, but rather speculating on growth in the years to come. Investors will be hoping that Cryptanite Blockchain Technologies can make progress and gain better traction for the business, before it runs low on cash.
Companies that lack both meaningful revenue and profits are usually considered high risk. You should be aware that there is always a chance that this sort of company will need to issue more shares to raise money to continue pursuing its business plan. While some such companies do very well over the long term, others become hyped up by promoters before eventually falling back down to earth, and going bankrupt (or being recapitalized). Some Cryptanite Blockchain Technologies investors have already had a taste of the bitterness stocks like this can leave in the mouth.
Cryptanite Blockchain Technologies had cash in excess of all liabilities of just US$210k when it last reported (December 2018). So if it hasn't remedied the situation already, it will almost certainly have to raise more capital soon. With that in mind, you can understand why the share price dropped 75% in the last year. You can see in the image below, how Cryptanite Blockchain Technologies's cash levels have changed over time (click to see the values).
In reality it's hard to have much certainty when valuing a business that has neither revenue or profit. What if insiders are ditching the stock hand over fist? I would feel more nervous about the company if that were so. It only takes a moment for you to check whether we have identified any insider sales recently.