Investors Who Bought Tyranna Resources (ASX:TYX) Shares Three Years Ago Are Now Down 93%
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As an investor, mistakes are inevitable. But you want to avoid the really big losses like the plague. So spare a thought for the long term shareholders of Tyranna Resources Limited (ASX:TYX); the share price is down a whopping 93% in the last three years. That might cause some serious doubts about the merits of the initial decision to buy the stock, to put it mildly. The more recent news is of little comfort, with the share price down 71% in a year. The falls have accelerated recently, with the share price down 67% in the last three months.
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We really hope anyone holding through that price crash has a diversified portfolio. Even when you lose money, you don't have to lose the lesson.
See our latest analysis for Tyranna Resources
Tyranna Resources recorded just AU$4,592 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. So it seems that the investors focused more on what could be, than paying attention to the current revenues (or lack thereof). It seems likely some shareholders believe that Tyranna Resources will find or develop a valuable new mine before too long.
As a general rule, if a company doesn't have much revenue, and it loses money, then it is a high risk investment. 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). It certainly is a dangerous place to invest, as Tyranna Resources investors might realise.
Our data indicates that Tyranna Resources had AU$130k more in total liabilities than it had cash, when it last reported in June 2019. That puts it in the highest risk category, according to our analysis. But with the share price diving 59% per year, over 3 years , it's probably fair to say that some shareholders no longer believe the company will succeed. The image below shows how Tyranna Resources'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 Tyranna Resources's cash levels have changed over time (click to see the values).
Of course, the truth is that it is hard to value companies without much revenue or profit. 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.