Why is Bid Energy (BID) a market darling? Because it rose from 20c to a high of $1.76 in less than a year? This looks like another BUD in the making and true enough, you have BUD holders and ex-holders in this stock.
BID fell 32.8% today on news that its Chairman resigned. And it was the heaviest traded volume day in over a year!
This is speculation without good reason. If you actually track the valuation of BID against its financial progress (which wasn't really all that hot) at yesterday's close of $1.34 prior to the 44c loss today, yesterday's market cap was at $170m, 19x revenues and not even making any money yet. Compared against unloved Catapult that has already proven business success with wearables deployed across many elite sports clubs, at today's improved closing, CAT's market cap still a paltry $159m with already $86m annual revenues.
BID prices have been driven by excessive speculative money chasing the next hot stock. And the Chairman's resignation and volume selling provided the catalyst for people to lose faith and unload. If you read my previous posts, I have said that I never like the energy optimisation solution space - people are too focussed on the growth and revenues but these businesses will have difficulty generating good cashflows to justify their lofty valuations.
