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The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But in contrast you can make much more than 100% if the company does well. For example, the Infant Bacterial Therapeutics AB (publ) (STO:IBT B) share price has soared 258% in the last three years. Most would be happy with that. It's down 2.7% in the last seven days.
See our latest analysis for Infant Bacterial Therapeutics
Infant Bacterial Therapeutics didn't have any revenue in the last year, so it's fair to say it doesn't yet have a proven product (or at least not one people are paying for). 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 Infant Bacterial Therapeutics can make progress and gain better traction for the business, before it runs low on cash.
We think companies that have neither significant revenues nor profits are pretty high risk. There is almost always a chance they will need to raise more capital, and their progress - and share price - will dictate how dilutive that is to current holders. While some such companies go on to make revenue, profits, and generate value, others get hyped up by hopeful naifs before eventually going bankrupt. Infant Bacterial Therapeutics has already given some investors a taste of the sweet gains that high risk investing can generate, if your timing is right.
Infant Bacterial Therapeutics has plenty of cash in the bank, with cash in excess of all liabilities sitting at kr536m, when it last reported (June 2019). This gives management the flexibility to drive business growth, without worrying too much about cash reserves. And with the share price up 53% per year, over 3 years, the market is focussed on that blue sky potential. The image below shows how Infant Bacterial Therapeutics's balance sheet has changed over time; if you want to see the precise values, simply click on the image. You can see in the image below, how Infant Bacterial Therapeutics'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. One thing you can do is check if company insiders are buying shares. It's usually a positive if they have, as it may indicate they see value in the stock. You can click here to see if there are insiders buying.
What about the Total Shareholder Return (TSR)?
Investors should note that there's a difference between Infant Bacterial Therapeutics's total shareholder return (TSR) and its share price change, which we've covered above. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Infant Bacterial Therapeutics hasn't been paying dividends, but its TSR of 300% exceeds its share price return of 258%, implying it has either spun-off a business, or raised capital at a discount; thereby providing additional value to shareholders.