Bulletproof Networks (BPF) – How I reacted to new information

One of the decisions I am most proud of this year is my call to sell off my BPF shares in February after some disappointing HY numbers.  Previous articles on BPF have extolled the virtues of their annuity business and their high revenue growth rate.  I’d been cheering BPF for the previous year after seeing the stock price hit the mid 50s.

 

Then the HY17 results hit. What a shocker!  Revenue growth was only 13% YoY, and the company had moved from profit to loss.  Rather than procrastinating, I took action.  Despite being a fan of BPF, I was a fan of the BPF that was growing at 50% and had just gone profitable.  This was a different company.  I sold the next day for 21c

 

Since then, the share price has slid to around 8c, vindicating my decision to dump the losing stock.  My loss was small in comparison, having bought in at 25c.

 

Looking at FY17 numbers, there are some encouraging signs.  The company has returned to a positive EBITDA, and is nearly back to breakeven.  Unfortunately, they have had significant management changes and severely damaged their reputation.  We’ll see what HY18 numbers bring, but I have plenty of good opportunities to deploy capital elsewhere.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s