The BrainChip Holdings Ltd (ASX: BRN) share price is crashing down to earth with an almighty thud on Friday.
In morning trade, the semiconductor company's shares are down a massive 13% to 74 cents.
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Why is the BrainChip share price crashing?
Investors have been selling off the BrainChip share price this morning after the company released its third quarter update.
That update revealed that the ~$1.5 billion company generated cash receipts of just $118,000 during the three months. That's a touch over $39,000 a month, ouch!
Unsurprisingly, this means that BrainChip is operating at a loss and recorded an operating cash outflow of $3.8 million for the quarter. This brought its year to date operating cash outflow to $11.8 million and leaves it with a cash balance of $24.6 million.
Based on its current burn rate, this gives the company six more quarters of funding.
What's happening?
Management has blamed its abject sales performance on industry headwinds. It explained:
We are seeing the greatest amount of sales activity and engagement in the Company's history. However, the current global technology market has created economic dynamics that have extended evaluations, decreased budgets, and delayed introduction of new technology. These conditions have created a headwind for our prospective and current customers. We anticipate these conditions to eventually calm. We remain positive on future market penetration and broad adoption of Brainchip's technology.
Looking ahead, the company intends to focus on key sales targets and converting technical evaluations into paid licenses.
In addition, it is accelerating development of next-generation Akida IP and products to extend its supposed technological lead and market opportunity. Though, judging by its quarterly sales performance, the semiconductor market doesn't appear to have much interest in its technology.
BrainChip has been described as a meme stock in the past. At the moment, it is living up to this tag.
