The PointsBet Holdings Ltd (ASX: PBH) share price is fast approaching 12-month lows after sliding 16.7% year-to-date and down more than 40% from its February all-time highs.
At the time of writing, PointsBet shares are trading for $9.62, down 3.9% from yesterday's closing price.
Let's take a look at some potential factors that may have stunted shareholder value for PointsBet.
What's weighing on the PointsBet share price?
Immense cash burn
PointsBet represents one of those loss-making, high growth narratives.
While many loss-making companies might take a more disciplined approach to capital management or making strides towards profitability, PointsBet has seen its losses balloon.
In its FY21 results, the company reported a 159% increase in revenue to $194.7 million. This was driven by a triple-digit uplift across key trading metrics such as betting turnover and active clients.
However, its strong growth came at a hefty price tag.
PointsBet reported a 314% increase in losses from $39.7 million in FY20 to $164.3 million in FY21.
Capital raising overhang
PointsBet has actively tapped into the pockets of its shareholders for more capital to sustain its growth trajectory.
The PointsBet share price made its debut on the ASX in June 2019 after successfully raising $75 million at $2.00 per share.
The company initiated a $122.1 million capital raising in October 2019 to fund its marketing, technology and US business development endeavours.
PointsBet raised another $303 million in September 2020 following its transformational deal with NBC Sports in the US.
More recently, PointsBet raised $400 million in August to further its US growth plans.
Weakness in broader tech
The ASX tech sector has struggled to outperform the broader market in 2021.
The S&P/ASX 200 Info Tech (INDEXASX: XIJ) is up 4.6% year-to-date compared to the S&P/ASX 200 Index (ASX: XJO) which has rallied 10.7%.
Many leading ASX 200 tech shares such as Afterpay Ltd (ASX: APT), Zip Co Ltd (ASX: Z1P) and Xero Limited (ASX: XRO) have largely flatlined in the past few months.
The underperformance of tech and high growth names could be another factor weighing on the PointsBet share price.
