The risk of speculative shares

The green line is going down… what should I do?

I have just sold one of my speculative share investments. I really believed in the technology and the company was Australian owned and operated.

With many shares of this nature you are really hoping that the company can turn their dream into reality and ultimately a steady revenue stream. However many companies wont make it out of R&D phase without significant capital raising and loans to fund the development to commercialization.

In the meantime other larger multinationals are just waiting around the corner to snap up any technology or IP that was developed for a bargain price.

Okay so I’m sure your dying to find out what the speculative share is? FBR or Fast Bricks Robotics is a company which has designed a robot to build houses in days rather than months. It also claims to be able to build houses to Australian building codes and standards, while minimizing brick wastage and improving safety.

Anyway I bought in when the shares where roughly 20 cents, and have held them for almost 6 months now, watching the share price steadily fall to 11 cents and now almost rock bottom 4.4 cents at time of writing.

I could have sold at the 11 cents mark and maybe take a 50% hit to my investment but I thought announcements and major deals with corporations would be done by now. Alas I cannot see any way a company that is burning 18 million a year with no solid revenue stream can survive past another 6 months.

True to form a recent capital raising was done to raise 5 million more… but again this will not solve the underlying problem of a decent revenue stream. Lucky for me I did not over invest and was just a small amount in the grand scheme of things but it could have been money better spent in other shares.

So I will just have to take my lesson and spread the word know when to quit, trust your gut, learn your lessons and don’t over commit yourself in any stock.

I will give you an update on my other speculative share and if that too will be sold… at the moment I’m holding on tight!

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