Thread by @talkcentss

Had a great conversation with @YoungInvestor03. What a kid, man.

Can’t go to school, but continues to learn.

We have started unpacking Renergen Ltd together #DYOR

Let’s check out some facts. 👇🏽

(Thread) 👇🏽
#DYOR

Renergen Ltd ($REN)

• 7 years young
• Negative earnings
• Negative cash flow
• Diluting shareholders

Yip, it’s a negative for me.

Don’t run away kicking and screaming just yet, like @YoungInvestor03 said to me, he has more time on his hands and he is willing to take on more risk.

Two things to consider here, are you:

•Risk averse
•Risk tolerant

*If you’re risk averse, then this stock isn’t for you

$REN
Let’s unpack what we have learnt so far:

• Sales revenue has been dropping since 2018
• 26% decline in sales growth from the prior year.

Not looking pretty, where’s those accountants now??

$REN

•Net income negative for 5 years (2017-2021)

In 2020 = NEGATIVE net income
(R52 million)

Average 5 year negative net income. (R191million)

Yes,
that’s shareholders getting diluted right there, or company must take on debt - probably both (double whammy)

Dilution or Debt

1. If I company is growing, it’s natural for them to take on debt for expansion.

2. Or you can raise capital from share issuance

*Shareholders are diluted if the latter.

Yip, $REN shareholders are being diluted, you are funding the companies losses. Yay!

Type of investor?

Now, you may be saying SELL, SELL.
But hold on.... where’s your conviction? Or did you buy a meme stock?

If you buying meme stocks, you aren’t an investor, you are a speculator.

Know what type of investor you are. Be honest with yourself.

Risk-reward ratio

More risk = more reward
Less risk = less reward

Do you believe in management to make it a success, or are you just hoping?

If you trust them, then you deserve to be rewarded in the long run- if they succeed. You could benefit greatly or you could go bust.

Capital Expenditure (Capex)

Follow the money

$REN has been operational since 2014.
So they need funding to grow, probably like what @MissNthabeleng is trying to do.

If you have conviction in the founders/management’s success then go for it. Those lessons are yours to learn

Management

It’s management’s responsibility to invest the capital prudently, they may fail, they may not.

Know this
• Managements t/record
• Insider capital
• Length employees tenure
• Pay scale
• Compensation

KeyTakeaway:
Know what your are investing in.

Thanks for making it to the end,

We’ll update you as we learn more @YoungInvestor03 has homework to do. Please feel free to give him companies to look at