On Novembner28 Facedrive released it's Q3 report. The Q4 and annual report was due to be released on February 28.But Facedrive management thought it better to keep the financial figures to themselves.The only message from FD management received was that FD replaced it's CFO.As they agreed with the content of an earlier blog on Wordpress EconothonII dated December 25 that stated operating expenses were overstated and operating revenues were understated.Shareholders may have objected to downplaying the potential of Facedrive and the Facedrive share price.It almostv seems that Facedrive management is trying to make financial matters look worse than they are and keep the share price down.This,of course, is ludicrous as the stated objective of the CEO and the board of directors is to maximize profit and shareholder's equity.This behaviour by management is not doing that.What can the rationale for hiding the performance of Facedrive when it appears to be on an upwards trajectory?
My last blog on Wordpress (Blogdaleup) dated February 15,2022 showed that FD had made quite a few astute acquisitions when the Facedrive share price was higher.Yet little information was shown to shareholders on companies like Foodhighway,Steer and Tally. But what was clear is that although there was a substantial amount of revenues and adjusted EBITDA in Q2 and Q3 management made efforts to overstate expenses and understate revenues.In other words management downplayed their earnings.Consequently this blog applauded management for letting go the ultra -conservative CFO that clearly was understating e.p.s.That aside,this blog was expecting a report for Q4 better than Q3 based on the trajectory of revenues and adjusted EBITDA shown in the first 9 months of 2021.Although the end of the pandemic in 2022 meant that mobile food delivery would gradually be reduced in Q4 the business from their sit- down restaurants would increase.It is likely most analysts saw increases in mobile food delivery for Q4.And any decreases in mobile food delivery would only take place in Q1 2022.
When will Shareholders get their Annual Report?
In my Feb.15 2022 blog I predicted that revenues would likely be up to $12 million in Q4.And if management made an attempt to control opertational expenses then e.p.s. could be as high as a loss of ($.02)- ($.03) for Q4 and a loss of ($.27) for 2021.This would be an encouraging sign for shareholders and new inverstors.This could even send the Facedrive share price towards $3.00.Only an extraordinary event could knock FD off this path on the operational side.So why would the CEO not at least provide shareholders with a corporate update explaining why there was no Q4 and annual report?There was no significant event to change the path on the operational side between Q3 and Q4.There were some changes to the share price but that should not affect opertational performance.So the trajectory seen in the first 9 months should provide the best estimate of Q4 results.But shareholders need the CEO to confirm this in a corporate update or the release of Q4 results.
Going Forward
There have been quite a few changes to Facedrive personnel since Q2.And it can be seen how this could upset the CEO.Nevertheless skipping a quarterly report and the annual report is inexcusable.At least a corporate update might explain the rationale for this behaviour.But this blog believes that the CEO has until May 28 (the date of the next quarterly report) to correct this situation.Now it is likely that dominant shareholders are preparing an ambush by calling a Special General Meeting to discus filing an interim performance report and electing a new CEO.Until then it is impossible to predict the share price.
