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Taking the occasional loss comes part and parcel with investing on the stock market. Unfortunately, shareholders of 333D Limited (ASX:T3D) have suffered share price declines over the last year. In that relatively short period, the share price has plunged 67%. 333D may have better days ahead, of course; we've only looked at a one year period. The falls have accelerated recently, with the share price down 50% in the last three months.
View our latest analysis for 333D
333D recorded just AU$533,243 in revenue over the last twelve months, which isn't really enough for us to consider it to have a proven product. This state of affairs suggests that venture capitalists won't provide funds on attractive terms. 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. It seems likely some shareholders believe that 333D will significantly advance the business plan before too long.
Companies that lack both meaningful revenue and profits are usually considered 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. 333D has already given some investors a taste of the bitter losses that high risk investing can cause.
333D had liabilities exceeding cash by AU$1,488,179 when it last reported in December 2018, according to our data. That makes it extremely high risk, in our view. But with the share price diving 67% in the last year, it's probably fair to say that some shareholders no longer believe the company will succeed. You can see in the image below, how 333D'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. Would it bother you if insiders were selling the stock? I would feel more nervous about the company if that were so. It costs nothing but a moment of your time to see if we are picking up on any insider selling.
A Different Perspective
Given that the market gained 8.5% in the last year, 333D shareholders might be miffed that they lost 67%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. With the stock down 50% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.