Today's ASX announcement marks the end of an era, and a new strategy for former market darling 1-Page Ltd (ASX: 1PG). Listed in 2014, 1-Page enjoyed a meteoric rise and CEO Joanna Riley was feted in media publications. At its peak, the company boasted a share price of $4.94 and a market capitalisation of almost $800 million:
This was despite having only $400,000 in revenue and losing $19 million after tax in financial year 2015.
Ultimately the business performance never lived up to the hype, even though 1-Page announced 'major' contracts with Sears, Amazon, Red Bull, Starbucks, and more.
Many have commented on the seeming similarities between 1-Page and current market darling Getswift Ltd (ASX: GSW), a company whose share price has also risen well in advance of its revenue growth. Getswift has also announced major, unquantified, deals with big international clients including Amazon.
While Getswift's future is not yet written – the stock is currently suspended – 1-Page's future was sealed in September last year when it sold its core 1-Page business for $1. After a suspension lasting many months, 1-Page announced this morning that it was entering the medical marijuana business via an acquisition of HAPA in Germany.
1-Page will issue 90 million shares and pay 1.3 million euros to the founders of HAPA, who expect to open their first medical marijuana clinics, in Berlin and Dortmund, within the next two months.
Following the acquisition there will be around 240 million 1-page shares on issue, so the HAPA founders will own ~37% of the company. 1-Page will have around $23 million in cash and will change its name to European Cannabis Corporation.
There have been a number of stark lessons in there for those who have owned companies like 1-Page or other similar businesses like Reffind Ltd (ASX: RFN) – Reffind was one I owned. Hopefully 1-Page's future looks brighter for shareholders than its past does.
It just goes to show you can never count a "software company" out…They might transform into a medical marijuana company instead.
