It's not a secret that every investor will make bad investments, from time to time. But it's not unreasonable to try to avoid truly shocking capital losses. It must have been painful to be a Hemcheck Sweden AB (publ) (STO:HEMC) shareholder over the last year, since the stock price plummeted 72% in that time. That'd be enough to make even the strongest stomachs churn. Hemcheck Sweden may have better days ahead, of course; we've only looked at a one year period. Furthermore, it's down 43% in about a quarter. That's not much fun for holders. We note that the company has reported results fairly recently; and the market is hardly delighted. You can check out the latest numbers in our company report.
View our latest analysis for Hemcheck Sweden
With just kr4,391,995 worth of revenue in twelve months, we don't think the market considers Hemcheck Sweden to have proven its business plan. You have to wonder why venture capitalists aren't funding it. So it seems shareholders are too busy dreaming about the progress to come than dwelling on the current (lack of) revenue. It seems likely some shareholders believe that Hemcheck Sweden will significantly advance the business plan before too long.
Companies that lack both meaningful revenue and profits are usually considered high risk. There is usually a significant chance that they will need more money for business development, putting them at the mercy of capital markets. So the share price itself impacts the value of the shares (as it determines the cost of capital). 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). Hemcheck Sweden has already given some investors a taste of the bitter losses that high risk investing can cause.
Hemcheck Sweden had cash in excess of all liabilities of kr24m when it last reported (June 2019). That's not too bad but management may have to think about raising capital or taking on debt, unless the company is close to breaking even. We'd venture that shareholders are concerned about the need for more capital, because the share price has dropped 72% in the last year . You can click on the image below to see (in greater detail) how Hemcheck Sweden's cash levels have changed over time. You can see in the image below, how Hemcheck Sweden's cash levels have changed over time (click to see the values).
It can be extremely risky to invest in a company that doesn't even have revenue. There's no way to know its value easily. Given that situation, would you be concerned if it turned out insiders were relentlessly selling stock? 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.