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A profit guarantee isn’t the same as actual future profit, so it only makes sense to assess the most recent financial year’s (FY) profit of any company being acquired. Take Digital Symphony, for example—its latest PAT (profit after tax) was only around $1.5 million, yet it’s committing to a profit guarantee of $4.5 million. That’s a nearly 3x jump, which raises the question: how realistic is this target?
Another crucial point is funding. Every acquisition requires capital, and Catcha’s current cash balance sits at just over $5 million. This means they’ll likely need to secure additional funds through borrowings (which come with interest costs) or a rights issue. Investors should be aware of the potential dilution risk if a rights issue is used to finance these acquisitions.
After touching the low of 28 sen which was totally rejected and rise even in a bear market, Uncle believe Catcha is now entering a new multiyear uptrend cycle. The company is going on a M&A spree and buying companies when everyone is fearful like Warren Buffet and paying low price multiples (e.g. PE 9 only)
US market Dow Jones S&P500 Nasdaq all huge jump today. Great timing for the start of the uptrend in Catcha. Only during bad market sentiments are major catalysts like m&a's not reflected in the share price and where the opportunity to buy at the bottom presents itself