QANTM Shares Hit Hard

QANTM Intellectual Property Ltd’s [ASX:QIP] share price plummeted 32.54% today.

What caused the drop?

QANTM announced revised forecast earnings for the 2017 financial year, with total revenue likely to be down roughly 10% from earlier estimates, while EBITDA (earnings before interest, tax, depreciation and amortisation) is also expected to drop 16% from initial numbers. According to management, an unusual seasonal downturn and a soft start to 2017 are to blame.

Managing Director Leon Allen said:

We are obviously very disappointed to be providing the market with this update, particularly in our first year as a listed company. At the half year our expectation was that the costs we have taken out of the business would offset any softness experienced in our revenues. A decline in activity since this time, however, has resulted in today’s update.

What now for QANTM?

The company will be looking to bounce back from a poor opening year, with positive factors including reduced expenses, free cash flow, and a marginally positive balance sheet.

The problem is whether QANTM can make amends with a stronger performance moving into 2018. Investors will need to decide whether they have as much confidence in the company’s future as the board.

Ryan Clarkson-Ledward,

For Money Morning

Ryan Clarkson-Ledward is an Editor at Money Morning.

Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects.

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