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    Dubber Suspended!

    Hi James, Dubber Share Price has collapsed and will likely fall further. I hold Dubber bought at $1.68 so am looking at a big loss. I would be grateful if you could provide answers to the following : Why is the company taking longer than it should to get audited accounts again? Will this cause the Share Price to further collapse and effect any Capital Raising!! Excluding acquisitions, what is the company’s organic growth rate over the past 3 years? What is the company’s average revenue per user? Why does the company offer zero-exercise price options (ZEPOs) instead of asking employees to pay for their options? What is there to stop a suspension from happening again? Is Dubber Bankrupt?? Dubber was promoted by many earlier this year including MM. Now it smells like there are serious problems with management! The bottom line ---is it a Hold or Sell?? when -if it is released from suspension. As always I appreciate your insight. Richard Orr

    Answer

    Hi Richard,

    There’s a lot of moving parts with Dubber’s suspension at the moment.

    It’s hard to say why we haven’t seen updated accounts as yet. Our best guess being the company needs to restate prior revenues given the disconnect between cash receipts and reported revenue – but this is just a guess. From my understanding of ASX listing rules, they needed to be back out on Friday otherwise there is a more onerous compliance process they need to go through, but again, I’m not 100% sure on this as there are lots of caveats when it comes to ASX rules.

    I’ll try to answer your questions as best I can with some assistance from Harry who knows the stock better than I.

    ARPU is around $25/user. They are still in the ramp up stage so growth by acquisition shouldn’t be necessary.  The company has deals with a number of international telcos and communications companies and has only penetrated a small portion of their underlying customers. The target market is huge, and they provide a product that is expected to see demand continue to grow.

    It is hard to see the company bankrupt at the moment given they had over $80m in cash at the end of the financial year, and around $35m of liabilities.

    ZEPOs are not-uncommon for a company like this. Generally speaking the number of options are reduced relative to a company providing paid options in the company.

    We will be making a call on our position in the Emerging Companies Portfolio when we have more information at hand.

    Apologise Richard that DUB has not been a good one for us. James

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