Barring a miracle on Friday, the Brainchip Holdings Ltd (ASX: BRN) share price is going to record a massive decline for the current financial year.
Since this time last year, the embattled semiconductor company's shares have lost approximately 55% of their value.
This has been driven by an incredibly poor performance both financially and operationally during the last 12 months.
Brainchip has reported less revenue than some CBD cafes and acknowledged that the first iteration of its technology was a flop. A very costly flop.
Will FY 2024 be better for the Brainchip share price?
Often when a company's shares lose half of their value over a 12-month period, value starts to emerge.
However, with the current Brainchip share price implying a $650 million valuation, the company still looks extremely expensive. Especially when you consider its abject track record of product development and the overwhelming competition it faces from behemoths including Intel and Nvidia.
In light of this, it wouldn't be at all surprising to see Brainchip shares lose another 50% of their value or more in FY 2024 if there's still no meaningful progress. Even then, it isn't hard to argue that a $300 million valuation is too much.
The company may have intellectual property and patents, but the value of them is a big unknown. As things stand, none of its rivals appears to see enough value or potential in its technology to consider a takeover. That's despite them spending billions on research and development each year.
And let's not forget that short sellers are clearly betting on a big decline even after the horror showing this financial year. As per the latest data from ASIC, 7.4% of its shares were held short.
Time will tell what happens in FY 2024, but it should be an interesting sideshow for non-shareholders to watch from the safety of the sidelines.
