Did Changing Sentiment Drive Glance Technologies's (CSE:GET) Share Price Down A Painful 80%?

Glance Technologies Inc. (CSE:GET) shareholders should be happy to see the share price up 13% in the last quarter. But that is meagre solace in the face of the shocking decline over three years. In that time the share price has melted like a snowball in the desert, down 80%. So it sure is nice to see a big of an improvement. The thing to think about is whether the business has really turned around.

View 7 warning signs we detected for Glance Technologies

With just CA$208,929 worth of revenue in twelve months, we don't think the market considers Glance Technologies to have proven its business plan. This state of affairs suggests that venture capitalists won't provide funds on attractive terms. So it seems that the investors focused more on what could be, than paying attention to the current revenues (or lack thereof). Investors will be hoping that Glance Technologies can make progress and gain better traction for the business, before it runs low on cash.

We think companies that have neither significant revenues nor profits are pretty high risk. There is almost always a chance they will need to raise more capital, and their progress - and share price - will dictate how dilutive that is to current holders. While some such companies do very well over the long term, others become hyped up by promoters before eventually falling back down to earth, and going bankrupt (or being recapitalized). Glance Technologies has already given some investors a taste of the bitter losses that high risk investing can cause.

When it reported in August 2019 Glance Technologies had minimal cash in excess of all liabilities consider its expenditure: just CA$3.7m to be specific. So if it hasn't remedied the situation already, it will almost certainly have to raise more capital soon. With that in mind, you can understand why the share price dropped 41% per year, over 3 years . The image below shows how Glance Technologies's balance sheet has changed over time; if you want to see the precise values, simply click on the image. The image below shows how Glance Technologies's balance sheet has changed over time; if you want to see the precise values, simply click on the image.

Of course, the truth is that it is hard to value companies without much revenue or profit. What if insiders are ditching the stock hand over fist? I'd like that just about as much as I like to drink milk and fruit juice mixed together. It costs nothing but a moment of your time to see if we are picking up on any insider selling.

A Different Perspective

Glance Technologies shareholders are down 69% for the year, but the broader market is up 18%. Of course the long term matters more than the short term, and even great stocks will sometimes have a poor year. The three-year loss of 41% per year isn't as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems. We would be wary of buying into a company with unsolved problems, although some investors will buy into struggling stocks if they believe the price is sufficiently attractive. It's always interesting to track share price performance over the longer term. But to understand Glance Technologies better, we need to consider many other factors. For example, we've discovered 7 warning signs for Glance Technologies (of which 4 are major) which any shareholder or potential investor should be aware of.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CA exchanges.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

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