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MySQUAR: Finally, house broker Beaufort confirms “operating break-even” actually means “still heavily loss-making”

By Cynical Bear | Friday 11 August 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.

I always take house broker notes with a heavy pinch of salt as they will paint as optimistic a picture as possible so this morning’s effort from Beaufort Securities on its client, MySQUAR (MYSQ), surprised me somewhat with its honesty but it’s good to finally put the nonsense about “operating break-even” to bed.

When MySQUAR came out with that meaningless phrase in the revenue update RNS on 4 July, some took it as meaning that this Myanman giant would now be throwing off bucket loads of cash. This theory was somewhat quashed on 31 July when it raised £1.2 million at 3.75p but this was accompanied by talk about future investment in a mobile payments platform so it didn’t stop the believers from believing.

Well, today Beaufort have come clean as their morning note includes the following sentence:

“Beaufort now considers MySQUAR even has the potential to produce its first net earnings for shareholders as early as its financial year-ended June 2019”

Wow, it “even has the potential….as early as….year-ended June 2019”

What are you talking about Beaufort? I thought the business was at bloody OPERATING BREAK-EVEN!! I thought Eric Schaer was literally bathing in dollar bills being thrown off this cash-generating behemoth?!

And now you’re implying that, if things go really well, it may be profitable in the year after the current one. Great!

Well at least the truth is now out, not that this will be any surprise to any rational investor who wondered where all the cash had gone in the first half of the year, but it’s good that the house broker has now confirmed that this is merely yet another jam tomorrow, cash-guzzling AIM minnow addicted to ramping and placing.

Thanks for the honesty - I think I’ll stay clear.

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