Supply@Me Capital Share Forecast January 2022 – Time to Buy SYME?

Shares of independent fintech company Supply@Me (LSE:SYME) are in the red today, closing at 0.1560p as January 6^th (17:59 GMT). SYME shares have continued to decline in value as the market gives the business the cold shoulder, over the past six months.

Supply@Me Capital – Technical Analysis

According to Supply@Me Capital’s financial statement, the market cap of the company is at £59.513 million with total assets worth $220K. Revenue for 2020 was £416,000, indicating a potential 10x increase.

Moving averages such as Exponential Moving Average (10)(0.1641), Simple Moving Average (10)( 0.1731), Exponential Moving Average (20)(0.1660), Simple Moving Average (20)(0.1645)and Exponential Moving Average (30)(0.1691) are sell action. On the other hand, oscillators such as Relative Strength Index (14)(44.5673), Stochastic %K (14, 3, 3)(28.5217), Commodity Channel Index (20)(−40.6618) and Average Directional Index (14)(22.0363) are neutral.

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Recent Developments

Supply@Me Capital is a well-known fintech company that specialises in inventory monetisation which is a fairly complex business. It allows other companies to cover the costs of their suppliers before actually selling any products. Products are held as collateral normally, but via Supply@Me Capital they can do the same thing without taking on debt. Customers seem to agree as evidenced by management expecting total revenue for the year to come in at £3.9 million to £4.9 million.

Througout 2021, the company made tremendous progress and has made progress agreements with parties worldwide. According to the latest trading update, Supply@Me Capital is working on the signing of a binding agreement with its first funder for the previously flagged inaugural Italian inventory monetisation transaction. Its recently acquired monetisation platform Trade Flow is also doing better than expected.

The company recently announced a new £5m loan with an additional £2m available as of early December which will undoubtedly provide some breathing room, as well as bolster the balance sheet. This also caused the shares to increase in value following the announcement. However, the loan comes with a ten present interest rate. Supply@Me Capital’s financial health can be adversely impacted as they do not have profits to cover this expense. The slowdown in growth can also cause some problems. Supply@Me Capital may have to turn to shareholders to raise additional capital in the future through an equity issue. This can further harm the SYME share price if the company cannot use the raised capital effectively.

Should You Buy SYME Shares?

Investors will have to wait before they get any concrete results from the business. Supply@Me Capital is expected to continue losing money for the next two years according to City analysts. Some investors have also been wary of investing in the business as it is taking longer than expected for the group to start earning returns. The company has relied on shareholders in the past to provide funding to keep the lights on. This is evidenced by the fact that the number of shares in issue has increased from 9m to 27bn over the past six years.

It is pretty hard to make an accurate judgement on how the company will fare in the future. While the business is still unproven, the rising level of revenue clearly shows it has a platform that customers are interested in. The recent acquisition of TradeFlow has added an investment advisory recurring revenue stream.

While investors are curious by Supply@Me Capital, they should be aware that it remains dependent on third-party funding. The shares could potentially turn to zero if the third part capital were to disappear. Considering this, now is not the time to buy SYME shares for your portfolio.

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