Bidstack shares fell for a second straight day following the announcement their broker Stifel revised revenue and EBITDA forecasts shortly after the company announced their US strategy.
The announcement relating to Stifel’s forecast adjustments came just hours after Bidstack said they were expanding into the US with new sales hires and the appointment of Jude O’Connor to lead the expansion.
“Our new accelerated growth strategy in the US strategy is the next stage in Bidstack’s evolution. Bidstack has now grown sufficiently as a business that it is ready and able to tackle the huge, untapped opportunity for in-game advertising within the US market,” said Bidstack CEO James Draper.
“Our plans build on our recent significant progress in our technology and we expect they will drive meaningful additional revenue for the Group in the near to medium term.”
However, the companies plans to ‘tackle’ the US comes at a time the company is yet the make any real headway in their current markets, generating just £2m revenue in the first half. The company said they were targeting £100m revenue in the medium term – a big ask from a company that’s taken years to generate £2m in a $196.8bn gaming market.
There will also likely be concerns the new hires will mean higher administrative costs, cash burn and the possibility of further fundraising.
The group had £3.6m in the bank 30th June 2022 and had burnt through £3.4m in the first half of 2022.
Given Bidtack’s strong following of private investors, the limitation for only institutional investors to see the research note issued by Stifel, and the sheer lack of detail included in yesterdays RNS, will have increased nervousness among Bidstack shareholders as to what the revision in outlook actually was.
Bidstack shares were trading at 3p on Wednesday morning, down 11% on the day and 38.5% year-to-date.