Weebit Nano (ASX:WBT) share price falls as losses accelerate 180%

Growing losses are seeing investors sell their shares in the company

| More on:
A man looks stunned as a cloud explodes from his head representing the CogState share price crashing today in

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Weebit Nano Ltd (ASX: WBT) share price is under pressure today after the company released its full-year results for FY21.

At the time of writing, shares in the computer chip developer are trading for $2.64 – down 4%. For context, the ASX All Ordinaries Index (ASX: XAO) is 0.12% lower.

Let's take a closer look at today's news.

Weebit Nano share price slumps as R&D expenses jump 3,400%

Here are some of the highlights from the Weebit Nano results:

  • Nil revenue for the period, which is the same as the prior corresponding period (pcp). The company cites being in the "research and development stage" of its operations as to why this is the case.
  • Losses before tax of $11.3 million – up 180% on the pcp. This was driven by a 3,400% jump in R&D expenses to $5.3 million, a 378% rise in sales and marketing expenses to $1.3 million, and a 23% lift in general and administrative expenses to $4.6 million.
  • Basic loss per share of 10.1 cents – up 77.2% on the pcp. Tangible assets per share are 17.19 cents. This is 328% higher than the pcp.
  • Net operating cash outflow of about $7 million.

What happened in FY21 for Weebit Nano?

The biggest story of the financial year overall and that affecting the Weebit Nano share price was the COVID-19 pandemic.

CEO Coby Hanoch conceded the pandemic had an adverse impact on the company in 20/21. He said:

…Ongoing COVID-19 restrictions and lockdowns have slightly delayed our original development and commercial timelines. Travel restrictions have prevented our engineers from being able to work alongside [development partner] Leti in the fab, as well as hindered our ability to have face-to-face meetings with potential customers and production partners. In June, we had our first international face-to-face meetings in more than a year, and hope these will increase in FY22 as vaccines are rolled out and restrictions continue to ease.

Besides the coronavirus, other major stories that affected the Weebit Nano share price included a capital raise via a share purchase plan and an important step in the commercialisation of its ReRam chips.

What else did management say?

Hanoch also had the following to say:

Weebit Nano made substantial progress towards first commercialisation and productisation over the past year, despite dealing with challenging operating conditions. In FY21, we achieved key technical milestones within both the embedded and discrete markets, broadened our development partnership with Leti, advanced negotiations with potential customers and partners, and were included in the S&P/ASX All Technology Index and the S&P/ASX All Ordinaries Index.

Weebit enters FY22 well funded to execute its commercialisation program, including securing first commercial agreements, transferring its technology to a production fab, technology qualification, and progressing the development of a solution for the discrete memory market.

What's next for Weebit Nano?

In what may be significant for the Weebit Nano share price going forward, the company says it is on the "cusp of commercialisation". It expects to announce revenue in this financial year.

Hanoch says the company's products will "address the growing global demand for faster and more efficient memory technology for use in almost every application – everything from smartphones and consumer products through to cars, IoT and artificial intelligence".

Weebit Nano share price snapshot

Over the past 12 months, the Weebit Nano share price has increased by around 380%. Year-to-date, however, it is down 0.38%.

Weebit Nano has a market capitalisation of around $340 million.

Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Fallers

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Burgundy Diamond Mines, Clarity Pharmaceuticals, EML, and Zip are sinking today

These ASX shares are ending the week in the red. But why?

Read more »

A worried man holds his head and look at his computer.
Share Fallers

Why 29Metals, Brainchip, Platinum, and Premier Investments shares are falling today

These ASX shares are having a tough time on hump day.

Read more »

Man with his head in his head because of falling share price.
Share Fallers

Why 29Metals, Atlas Arteria, IDP Education, and Mineral Resources shares are falling

These ASX shares are having a tough time on Tuesday. But why?

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why ALS, EOS, NRW, and Patriot Battery Metals are dropping today

These ASX shares are starting the week in the red.

Read more »

A man looking at his laptop and thinking.
Technology Shares

Why are these ASX tech shares getting smashed today?

Owners of these two stocks are missing out today.

Read more »

a man weraing a suit sits nervously at his laptop computer biting into his clenched hand with nerves, and perhaps fear.
Share Fallers

Why AGL, Brickworks, IGO, and New Hope shares are dropping today

These ASX shares are having a poor session. But why?

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Share Fallers

Why Amcor, Arafura, Brainchip, and South32 shares are tumbling today

These ASX shares are having a tough time on hump day. But why?

Read more »

A young woman holds an open book over her head with a round mouthed expression as if to say oops as she looks at her computer screen in a home office setting with a plant on the desk and shelves of books in the background.
Share Fallers

Why Aussie Broadband, Liontown, Metals Acquisition, and Seek shares are falling

These ASX shares are having a poor session. But why?

Read more »