Shares in digital logistics and transportation management hopeful Yojee Ltd (ASX: YOJ) dropped 18% today after the software startup issued a clarification to a market update from earlier in the week today.
What prompted the clarification is not known, but a regulatory authority may have requested it after the company issued two separate price sensitive announcements on October 3 and 4, inter alia, promoting its success in signing up clients.
Over October 3 and 4 the stock rocketed more than 50% just on the back of these announcements, although virtually no detail was provided in terms of the amount of revenue these deals would bring in or other financial benefits.
For the year ending June 30 2017 Yojee brought in just $133,000 in non-interest based revenue and posted a loss of $1.96 million. It posted an operating cash loss of $1.3 million for the quarter ending June 30 2017 and had cash on hand of just $3.1 million at the end of the period.
According to Commsec it has a market value more than $100 million with the shares changing hands for 21 cents. So far Yojee has delivered little other than self-promotion that has supported the share price. However, given its cash position and financials buying shares looks a very high-risk bet to me.
Another rocketing stock in the digital logistics management and transportation space is GetSwift Ltd (ASX: GSW). It has surged nearly 1,000% over the past year, despite also having relatively little in the way of revenues.
I would be a seller of these two businesses if I owned them, as the valuations look based on self-promotion rather than real world cash flows.
