What a terrible day for DSE holders, including myself. The ASX has become an unsafe place to put your money. I have unfortunately been through a string of dodge companies in the last few years, and the number of dodge companies doesn't seem to be decreasing. Lack of transparency, and insider trading appears to be common.
Looking at the SP, we can see someone was willing to sell out days before this announcement. It makes me wonder when DSE really did become aware that UOL Brazil had decided to pull the backup from their "inactive" email accounts. It would appear to me that someone knew ahead of time. If the company was trading without releasing this information to public, then they should have something to answer for this.
It also makes me concerned that if the "inactive" accounts have been removed, then what about all the active accounts that perhaps didnt sign up to backup. Perhaps they will opt out when they realise they are paying for something that they didnt sign up for. Time will tell.
Secondly, I notice that the financials dont make much sense. This last quarter we should have had revenue from 750k "paid" users. However, our revenue was only $1.1 mil. If these users were truly "paid users" then even with a trial period, this does appear low. Now that we are down to 350k customers, DSE estimates an ARR of 4.6mil. That would translate to a quarterly revenue of 1.15mil, which is interestingly equivalent to this last quarter revenue. How is it possible that with less than half the user number we can still generate the same revenue moving forward? I find this quite interesting, as it creates the question if DSE truly ever actually had 750k customers that were paying. This is very reminiscent of a similar situation with Getswift.
Overall, I am very disappointed with management, and how they have deceived shareholders. I believe the company should be investigated to see when they were informed that user numbers from UOL were decreasing, and see if shareholders were told immediately, or whether the company was trading while significant information was withheld. I feel that the possibility of a class action should be considered if the later is the case.
DSE Price at posting:
4.4¢ Sentiment: None Disclosure: Not Held
