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13 July 2021 | Update

Case study: Ignite Limited

A company on the cusp of administration, rebirth, or takeover…

Ignite may be a speculative buying opportunity, however, at present the company should be watched for early signs of improvement. For now, we are looking to see if new management can execute on early initiatives. Upon seeing this, the share price has potential to re-rate significantly given the company is currently priced for failure.

For the high-risk investor, Ignite offers an opportunity to purchase stock at the company’s current break-up value (net tangible assets circa A$5m, market capitalisation circa A$5m). Ignite is a highly speculative investment, so before making a decision, seeking guidance from an adviser is strongly advised.

At this stage, the jury is out on whether Ignite has a future. The company has failed to deliver a return on investment to shareholders since 31 August 2007, thus the question must be asked, what has changed and why is this time different? Whilst Ignite has divested all non-core operations, returning the company to a more traditional model, there is still a great deal to be achieved before we can have confidence in the business remaining a going concern.

It is important to understand Ignite operates in an industry that is ‘all things people’, where the current Chairman, (previous Interim CEO) Gary Sladden, highlights ‘the company’s assets leave from the car park every day’…

Continue the study here.



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