It's business has been in the field of Mobile marketing and Mobile Payments and for a while the business may have had a case for being undervalued. Essentially the business had relative to its market capitalisation a substantial cash balance and a decently profitable business.
However this changed in 2015 as the company announced it was in discussions with a party on an offer for the company and the shares jumped up.
Subsequently the offer was withdrawn and since then the company has been a bit of a muddle. It has lost both its Chairman and CEO and the Payforit initaitive amongst Mobile Operators has been declared by the company to have a significant negative effect on revenues.
To counter this the company has made much of its intention to pursue an acquisition strategy.
So the message has been - we have some cash, the business we have been in is not looking good and we are desperately looking to throw money at something else that might work.
Little wonder then that the indicative offer in 2015 was at €20 and the share price is currently less than 6p
However in the RNS on the 25th November 2016 the company announced that it felt that whilst the Payforit initiative had damaged the business it did not look as bad as it might. With some job losses the company could be profitable and potentially could grow and that the plan to throw money at an acquisition was off the table as it was no longer seen as necessary. The company also announced that as of the 25th the company had in excess of €7m in the bank, and I note the market cap is under £6m.
The shares are often hard to trade, there is still the potential for management to do something stupid and they are not suggesting that there is a wizard wheeze to make millions overnight.
But management seem to have a better business than they believed a short while ago. They seem to have decided not to throw the shareholders money at anything that might save their jobs and the cash in the bank, depending on the day it gets looked at is greater than the market cap of the company.
So whilst I wouldn't recommend anyone buys any, I equally wouldn't see it as an act of pure folly to have a small position.