Theres no doubt that money can be made by owning shares of unprofitable businesses. For example, biotech and mining exploration companies often lose money for years before finding success with a new treatment or mineral discovery. But while the successes are well known, investors should not ignore the very many unprofitable companies that simply burn through all their cash and collapse.
So, the natural question for iMining Blockchain and Cryptocurrency (CVE:IMIN) shareholders is whether they should be concerned by its rate of cash burn. For the purpose of this article, well define cash burn as the amount of cash the company is spending each year to fund its growth (also called its negative free cash flow). First, well determine its cash runway by comparing its cash burn with its cash reserves.
See our latest analysis for iMining Blockchain and Cryptocurrency
A companys cash runway is the amount of time it would take to burn through its cash reserves at its current cash burn rate. In November 2019, iMining Blockchain and Cryptocurrency had CA$6.8k in cash, and was debt-free. Importantly, its cash burn was CA$39k over the trailing twelve months. Therefore, from November 2019 it had roughly 2 months of cash runway. To be frank we are alarmed by how short that cash runway is! Depicted below, you can see how its cash holdings have changed over time.
iMining Blockchain and Cryptocurrency didnt record any revenue over the last year, indicating that its an early stage company still developing its business. Nonetheless, we can still examine its cash burn trajectory as part of our assessment of its cash burn situation. From a cash flow perspective, its great to see the companys cash burn dropped by 99% over the last year. That might not be promising when it comes to business development, but its good for the companies cash preservation. iMining Blockchain and Cryptocurrency makes us a little nervous due to its lack of substantial operating revenue. We prefer most of the stocks on this list of stocks that analysts expect to grow.
Theres no doubt iMining Blockchain and Cryptocurrencys rapidly reducing cash burn brings comfort, but even if its only hypothetical, its always worth asking how easily it could raise more money to fund further growth. Issuing new shares, or taking on debt, are the most common ways for a listed company to raise more money for its business. Many companies end up issuing new shares to fund future growth. By comparing a companys annual cash burn to its total market capitalisation, we can estimate roughly how many shares it would have to issue in order to run the company for another year (at the same burn rate).
iMining Blockchain and Cryptocurrencys cash burn of CA$39k is about 5.4% of its CA$727k market capitalisation. Given that is a rather small percentage, it would probably be really easy for the company to fund another years growth by issuing some new shares to investors, or even by taking out a loan.
Even though its cash runway makes us a little nervous, we are compelled to mention that we thought iMining Blockchain and Cryptocurrencys cash burn reduction was relatively promising. Looking at the factors mentioned in this short report, we do think that its cash burn is a bit risky, and it does make us slightly nervous about the stock. Separately, we looked at different risks affecting the company and spotted 6 warning signs for iMining Blockchain and Cryptocurrency (of which 4 cant be ignored!) you should know about.
Of course iMining Blockchain and Cryptocurrency may not be the best stock to buy. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
Read the original post:
Will iMining Blockchain and Cryptocurrency (CVE:IMIN) Spend Its Cash Wisely? - Simply Wall St
- Bitcoin Center NYC To Support Wednesday's CryptoCurrency Convention By Hosting After-Party [Last Updated On: April 11th, 2014] [Originally Added On: April 11th, 2014]
- As Bitcoin Soars in Value, Alternative Cryptocurrencies ... [Last Updated On: April 11th, 2014] [Originally Added On: April 11th, 2014]
- CryptoCurrency.org [Last Updated On: April 11th, 2014] [Originally Added On: April 11th, 2014]
- Cryptocurrency - Wikipedia, the free encyclopedia [Last Updated On: April 11th, 2014] [Originally Added On: April 11th, 2014]
- Qoinpro Cryptocurrency Faucet - Video [Last Updated On: April 11th, 2014] [Originally Added On: April 11th, 2014]
- Global Issues Cryptocurrency Project - Video [Last Updated On: April 11th, 2014] [Originally Added On: April 11th, 2014]
- cryptocurrency - Video [Last Updated On: April 11th, 2014] [Originally Added On: April 11th, 2014]
- PotCoin @ Cryptocurrency convention NYC, Good Audio - Video [Last Updated On: April 12th, 2014] [Originally Added On: April 12th, 2014]
- Bryce Weiner @ CryptoCurrency Convention 2014 - Video [Last Updated On: April 12th, 2014] [Originally Added On: April 12th, 2014]
- Unobtanium Cryptocurrency Explained - Video [Last Updated On: April 12th, 2014] [Originally Added On: April 12th, 2014]
- How To Create Your Own Cryptocurrency Co.Labs code ... [Last Updated On: April 14th, 2014] [Originally Added On: April 14th, 2014]
- CryptoCoinsNews - Cryptocurrency and Bitcoin News with ... [Last Updated On: April 14th, 2014] [Originally Added On: April 14th, 2014]
- Joe Rogan and Reddit Co-founder Alexis Ohanian talk Dogecoin, Cryptocurrency - Video [Last Updated On: April 14th, 2014] [Originally Added On: April 14th, 2014]
- How To Assess A CryptoCurrency: AltCoin Assessment Protocol. What's the next big AltCoin? - Video [Last Updated On: April 14th, 2014] [Originally Added On: April 14th, 2014]
- Reggie Middleton's UltraCoin @ NYC CryptoCurrency Convention - Video [Last Updated On: April 14th, 2014] [Originally Added On: April 14th, 2014]
- The future is Nxt (cryptocurrency platform) - Video [Last Updated On: April 19th, 2014] [Originally Added On: April 19th, 2014]
- CryptoCurrency Convention 4/9/14 - Dan Larimer Bitshares - Video [Last Updated On: April 20th, 2014] [Originally Added On: April 20th, 2014]
- CryptoCurrency Convention 4/9/14 - Xavier Hawk Permacredits - Video [Last Updated On: April 20th, 2014] [Originally Added On: April 20th, 2014]
- Does a cryptocurrency have the potential to revolutionize Ukraine? - Video [Last Updated On: April 20th, 2014] [Originally Added On: April 20th, 2014]
- Marscoin @ CryptoCurrency Convention NYC 4/9/14 - Lennart Lopin - Video [Last Updated On: April 22nd, 2014] [Originally Added On: April 22nd, 2014]
- Vertcoin @ CryptoCurrency Convention NYC 4/9/14 - Joe Fisher - Video [Last Updated On: April 22nd, 2014] [Originally Added On: April 22nd, 2014]
- UltraCoin @ CryptoCurrency Convention NYC 4/9/14 - Reggie Middleton - Video [Last Updated On: April 22nd, 2014] [Originally Added On: April 22nd, 2014]
- iCoin @ CryptoCurrency Convention NYC 4/9/14 - Ryan Ridgeway - Video [Last Updated On: April 22nd, 2014] [Originally Added On: April 22nd, 2014]
- Florincoin @ CryptoCurrency Convention NYC 4/9/14 - Joe Fiscella - Video [Last Updated On: April 22nd, 2014] [Originally Added On: April 22nd, 2014]
- PotCoin @ CryptoCurrency Convention NYC 4/9/14 - Nick Iversen - Video [Last Updated On: April 22nd, 2014] [Originally Added On: April 22nd, 2014]
- ZenithCoin @ CryptoCurrency Convention NYC 4/9/14 - Eddie Corral - Video [Last Updated On: April 22nd, 2014] [Originally Added On: April 22nd, 2014]
- Bryce Weiner @ CryptoCurrency Convention 4/9/14 - - Video [Last Updated On: April 24th, 2014] [Originally Added On: April 24th, 2014]
- Bitcoin Exchange CryptoRush Loses Millions of BlackCoin Cryptocurrency - Video [Last Updated On: April 24th, 2014] [Originally Added On: April 24th, 2014]
- Brock Pierce, Entrepreneur "FireSide Chat" @ CryptoCurrency Convention NYC - 4/9/14 - Video [Last Updated On: April 24th, 2014] [Originally Added On: April 24th, 2014]
- [OFFICIAL SPONSOR] Nick Spanos, Bitcoin Center NYC @ CryptoCurrency Convention 4/9/14 - Video [Last Updated On: April 24th, 2014] [Originally Added On: April 24th, 2014]
- AuroraCoin @ CryptoCurrency Convention NYC 4/9/14 - David Lio - Video [Last Updated On: April 24th, 2014] [Originally Added On: April 24th, 2014]
- DigiByte @ CryptoCurrency Convention NYC 4/9/14 - Jared Tate - Video [Last Updated On: April 24th, 2014] [Originally Added On: April 24th, 2014]
- Digitalcoin @ CryptoCurrency Convention NYC 4/9/14 - Andrew Davidson - Video [Last Updated On: April 24th, 2014] [Originally Added On: April 24th, 2014]
- BitAngels Co-Founder, David Johnson @ CryptoCurrency Convention NYC 4/9/14 - Video [Last Updated On: April 24th, 2014] [Originally Added On: April 24th, 2014]
- The Future of Cryptocurrency, Investing, and Crowdfunding (Toronto #BitcoinExpo Highlights) #548 - Video [Last Updated On: April 24th, 2014] [Originally Added On: April 24th, 2014]
- How to Set Up a Ripple (CryptoCurrency) Generating System! - Video [Last Updated On: April 24th, 2014] [Originally Added On: April 24th, 2014]
- --- The Great Debate --- Bitcoin vs Altcoin @ The CryptoCurrency Convention 4/9/14 - - Video [Last Updated On: April 24th, 2014] [Originally Added On: April 24th, 2014]
- Popularcoin @ CryptoCurrency Convention 4/9/14 - Joshua Nold - Video [Last Updated On: April 24th, 2014] [Originally Added On: April 24th, 2014]
- TimeKoin @ CryptoCurrency Convention 4/9/14 - Michael Brown - Video [Last Updated On: April 24th, 2014] [Originally Added On: April 24th, 2014]
- Infinitecoin @ CryptoCurrency Convention 4/9/14 - Loring Small - Video [Last Updated On: April 24th, 2014] [Originally Added On: April 24th, 2014]
- Bitcoin vs. Political Power: The Cryptocurrency Revolution - Stefan Molyneux at TNW Conference - Video [Last Updated On: April 26th, 2014] [Originally Added On: April 26th, 2014]
- TNW - Stefan Molyneux - Money, Power and Politics The Cryptocurrency Revolution - Video [Last Updated On: April 26th, 2014] [Originally Added On: April 26th, 2014]
- Coinnext Cryptocurrency Exchange Coming Soon - Video [Last Updated On: April 29th, 2014] [Originally Added On: April 29th, 2014]
- The Mises View: "Taxing Cryptocurrency" | Jeff Deist - Video [Last Updated On: May 2nd, 2014] [Originally Added On: May 2nd, 2014]
- mTrader.org - Cryptocurrency Mining System - Video [Last Updated On: May 2nd, 2014] [Originally Added On: May 2nd, 2014]
- CS 171 Final Project: Cryptocurrency Visualizations - Video [Last Updated On: May 3rd, 2014] [Originally Added On: May 3rd, 2014]
- Cryptocurrency Explained The Tech Guy 1046 - Video [Last Updated On: May 3rd, 2014] [Originally Added On: May 3rd, 2014]
- Know How 74 Cryptocurrency - Video [Last Updated On: May 4th, 2014] [Originally Added On: May 4th, 2014]
- CryptoCurrency of the World Unite! - Video [Last Updated On: May 9th, 2014] [Originally Added On: May 9th, 2014]
- BBT Presents: Ode to Cryptocurrency - Video [Last Updated On: May 13th, 2014] [Originally Added On: May 13th, 2014]
- Scryptify Cryptocurrency Video - Crypto Currency Exchanges - Video [Last Updated On: May 13th, 2014] [Originally Added On: May 13th, 2014]
- Bitpagar Cryptocurrency - Video [Last Updated On: May 16th, 2014] [Originally Added On: May 16th, 2014]
- How to Mine Cryptocurrency Safely - Video [Last Updated On: May 17th, 2014] [Originally Added On: May 17th, 2014]
- Bunnycoin - Innovative New Cryptocurrency - Video [Last Updated On: May 17th, 2014] [Originally Added On: May 17th, 2014]
- Nxt cryptocurrency platform: Proof of Stake mining system - Video [Last Updated On: May 18th, 2014] [Originally Added On: May 18th, 2014]
- Violincoin - The first cryptocurrency for musician - - Video [Last Updated On: May 21st, 2014] [Originally Added On: May 21st, 2014]
- The Cryptocurrency Store (Spanish/Espagnol) - Video [Last Updated On: May 22nd, 2014] [Originally Added On: May 22nd, 2014]
- Cryptocurrency: Get Mining! - Video [Last Updated On: May 22nd, 2014] [Originally Added On: May 22nd, 2014]
- How To Trade CryptoCurrency: Sign up to a safe and reliable exchange for trading CryptoCurrency - Video [Last Updated On: May 22nd, 2014] [Originally Added On: May 22nd, 2014]
- Cryptocurrency and Nonprofits with Eric Nakagawa - Video [Last Updated On: May 23rd, 2014] [Originally Added On: May 23rd, 2014]
- The Cryptocurrency Store - Video [Last Updated On: May 23rd, 2014] [Originally Added On: May 23rd, 2014]
- Bitcoin Song - The Cryptocurrency Store - Video [Last Updated On: May 25th, 2014] [Originally Added On: May 25th, 2014]
- Videoconferencia Cryptocurrency 201243946 - Video [Last Updated On: May 27th, 2014] [Originally Added On: May 27th, 2014]
- VideoCharla Jesus Ramos Cryptocurrency - Video [Last Updated On: May 27th, 2014] [Originally Added On: May 27th, 2014]
- Sudbury Cryptocurrency Conference, May 26th: Ethereum - Video [Last Updated On: May 30th, 2014] [Originally Added On: May 30th, 2014]
- 2014 Cubieboard 1, 2 - Mining Peercoins (SHA-256 based) Cryptocurrency - Video [Last Updated On: June 2nd, 2014] [Originally Added On: June 2nd, 2014]
- 2nd Salaries in CryptoCurrency - Video [Last Updated On: June 2nd, 2014] [Originally Added On: June 2nd, 2014]
- The Best Cryptocurrency Trading Platform - Video [Last Updated On: June 3rd, 2014] [Originally Added On: June 3rd, 2014]
- Cryptocurrency business forum - Video [Last Updated On: June 4th, 2014] [Originally Added On: June 4th, 2014]
- Cryptocurrency Opportunities in Southeast Asia | John KIM - Video [Last Updated On: June 7th, 2014] [Originally Added On: June 7th, 2014]
- Facebook Approves Cryptocurrency Tipping Apps -- Bitcoin Weekend In San Francisco - Video [Last Updated On: June 8th, 2014] [Originally Added On: June 8th, 2014]
- Wolf of Wall Street & Cryptocurrency w/ Patrick "PK" McDonnell - Video [Last Updated On: June 9th, 2014] [Originally Added On: June 9th, 2014]
- BankNote CryptoCurrency Review - Video [Last Updated On: June 13th, 2014] [Originally Added On: June 13th, 2014]
- CryptoCurrency 4 Housing for Father's Day! - Video [Last Updated On: June 13th, 2014] [Originally Added On: June 13th, 2014]
- Hyper CryptoCurrency Review - Video [Last Updated On: June 14th, 2014] [Originally Added On: June 14th, 2014]
- 0NE " EPIC " (HD dubstep mix) spot - a cryptocurrency with an Engine - Video [Last Updated On: June 15th, 2014] [Originally Added On: June 15th, 2014]
- Bitcoin,Litecoin mining rig cryptocurrency 2500W system, 6x 280x ASUS Beast 2014 - Video [Last Updated On: June 17th, 2014] [Originally Added On: June 17th, 2014]
- The Rundown Live #281 Tatiana Moroz (Chemtrails,CryptoCurrency,Anti-War) - Video [Last Updated On: June 19th, 2014] [Originally Added On: June 19th, 2014]
- Neutrality Coin New Alternative Cryptocurrency - Video [Last Updated On: June 20th, 2014] [Originally Added On: June 20th, 2014]
- Cryptocurrency Update - Buy Low, Sell High! - Video [Last Updated On: June 21st, 2014] [Originally Added On: June 21st, 2014]