Flying Spark (TLV:FLYS investor one-year losses grow to 61% as the stock sheds ₪2.1m this past week

The nature of investing is that you win some, and you lose some. Anyone who held Flying Spark Ltd. (TLV:FLYS) over the last year knows what a loser feels like. To wit the share price is down 71% in that time. Flying Spark hasn't been listed for long, so although we're wary of recent listings that perform poorly, it may still prove itself with time. Furthermore, it's down 43% in about a quarter. That's not much fun for holders.

If the past week is anything to go by, investor sentiment for Flying Spark isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

View our latest analysis for Flying Spark

With zero revenue generated over twelve months, we don't think that Flying Spark has proved its business plan yet. You have to wonder why venture capitalists aren't funding it. So it seems that the investors focused more on what could be, than paying attention to the current revenues (or lack thereof). It seems likely some shareholders believe that Flying Spark will significantly advance the business plan before too long.

We think companies that have neither significant revenues nor profits are pretty high risk. You should be aware that there is always a chance that this sort of company will need to issue more shares to raise money to continue pursuing its business plan. While some companies like this go on to deliver on their plan, making good money for shareholders, many end in painful losses and eventual de-listing. Flying Spark has already given some investors a taste of the bitter losses that high risk investing can cause.

Flying Spark had liabilities exceeding cash by ₪6.6m when it last reported in June 2023, according to our data. That makes it extremely high risk, in our view. But since the share price has dived 71% in the last year , it looks like some investors think it's time to abandon ship, so to speak. The image below shows how Flying Spark's balance sheet has changed over time; if you want to see the precise values, simply click on the image.

It can be extremely risky to invest in a company that doesn't even have revenue. There's no way to know its value easily. What if insiders are ditching the stock hand over fist? I would feel more nervous about the company if that were so. It only takes a moment for you to check whether we have identified any insider sales recently.

What About The Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between Flying Spark's total shareholder return (TSR) and its share price return. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. We note that Flying Spark's TSR, at -61% is higher than its share price return of -71%. When you consider it hasn't been paying a dividend, this data suggests shareholders have benefitted from a spin-off, or had the opportunity to acquire attractively priced shares in a discounted capital raising.

A Different Perspective

We doubt Flying Spark shareholders are happy with the loss of 61% over twelve months. That falls short of the market, which lost 13%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. The share price decline has continued throughout the most recent three months, down 43%, suggesting an absence of enthusiasm from investors. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 6 warning signs with Flying Spark , and understanding them should be part of your investment process.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

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

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.