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Fitbug – shares soar (before suspension) on an RNS Reach ramparoonie

By Steve Moore | Wednesday 18 January 2017

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

On the back of an RNS Reach (i.e. not even deemed to merit a main RNS) announcement, shares in “digital wellness technology provider” Fitbug Holdings (FITB) roofed it to be 370% higher, at 0.775p, before a suspension of trading was announced. Hmmm.

The RNS Reach announcement is of “a customer win with a global financial services group in Asia”. This is noted to be an initial 1-year programme, with 14,000 devices shipped last month and the programme rolling out early this year.

If the aim was to spark the shares sharply higher, kudos for the announcement title (“New customer win covering 14,000 employees”) and use of “global” to describe the customer (which “wishes to remain anonymous at this time”). These suggest vastness but, natch, no actual financial information at all is provided.

This has long been the way here – remember contracts with the likes of Amazon, Best Buy and Target? Meanwhile, despite a rescue refinancing, I’d suggest the balance sheet is still without much ballast.

That announcement also showed the company still materially loss-making despite already “over 10 years' experience innovating the wearable health technology sector”. I’d thus suggest this remains a bargepole stock (and particularly so at a market cap anywhere approaching £10 million!). The suspension of trading at 3:20pm is stated by AIM to be “at the request of the company… pending an announcement”. Hmmm, we wait to see…

P.S. While it’s at that, the company might also want to get around to updating its Investor Relations page – it, for example, currently showing an issued share capital of 281.45 million, when in July the company updated (via RNS) that “total issued share capital will comprise 1,231,366,968 new ordinary shares”!

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