Browsing through this week’s collection of 52-week lows, I noticed that 1-Page Ltd (ASX: 1PG) has fallen even further in recent times, plunging past previous lows to hit $0.19 at close yesterday.

Today's prices are a stark contrast to 1-Page's former heights. (source: Google Finance).

Today’s prices are a stark contrast to 1-Page’s former heights. (source: Google Finance).

I was initially interested in 1-Page because it raised a fair chunk of cash a while ago and I thought its market cap might be significantly below its cash on hand. It is, with Net Tangible Assets of around 24 cents per share.

Yet expenditure has also increased sharply, with payments to suppliers and employees coming in $5 million higher (more than double) in the first half of 2016, compared to the first half of 2015. Revenues grew 50% during the same time – to $163,771. This suggests investors are expecting more heavy expenditure, which is why the company is trading at a discount.

When I wrote this article on unprofitable tech stocks in April I didn’t expect 1-Page to fall as far as it did – but that’s what happens when companies spend heavily and can’t generate sales. Foolish writer Mike King warned investors in June to beware the ASX tech wrecks, which shows 20 formerly promising tech stocks that have failed to live up to investor expectations in the past year.

The situation has been so bad that SEEK Limited (ASX: SEK) founder and start-up investor Paul Bassat (quoted in Mike’s article above) warned investors that the valuations for many newly listed ASX companies were ‘egregious‘ and that many of them ‘(are) not ready to be listed‘.

Buyer beware.

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Motley Fool contributor Sean O'Neill has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.