We quite like the idea of RBL, a marketplace that enables artists to get noticed, and to get paid (at least that’s the idea, many a marketplace winds up enriching the platform rather than the contributors).
But that share price pop yesterday ($2.72 at the bottom, to close at over $3.60)…
1) You have to take it on faith that the revenue trajectory is only reverting to trend.
2) It remains loss making. The FY profit result gives the appearance of a growing business that’s made the transition to positive earnings, as opposed to one that had a bumper 1H but resumed business as usual (loss making) by the 2H.
That much faith given valuations is quite an ask.
3) Management themselves have guided to a challenged half, so you won’t get confirmation for some time yet, either way. We’ve highlighted the relevant bit, namely that 1H FY22 revenue growth will likely be negative.
That’s raises the prospect of dead money for a while, and like a lot of companies that join the “stronger 2H club” simply sets them up for downgrade risk.
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