The shipping company that loses money – the capital market

Retailers in Israel have benefited greatly from the corona crisis. While other companies suffered from repeated closures, food companies enjoyed an increase in consumption, their results improved and their shares soared. For example, the shares of

Rami Levi
-0.75%

Base:22,670

opening:22,690

Tall:22,830

low:22,490

change:734,550

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and

Shufersal
+ 0.48%

Base:2,481

opening:2,482

Tall:2,496

low:2,481

change:1,120,546

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Have jumped in the last twelve months by about 15%, and stock

victory
+ 0.91%

Base:7,473

opening:7,558

Tall:7,600

low:7,500

change:455,397

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Jumped by about 33% and

Tiv Ta’am
-1.65%

Base:673.3

opening:673.3

Tall:678.9

low:662.2

change:261,119

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Jumped 3 times.

The online shipping companies that are a complementary action for the purchase of writers have also shown a significant jump in the wake of the Corona, and at least one of them, Bering Bering (which sells better under the Quik brand) has accumulated an appetite and is interested in entering the stock market.

Quick operates as an online retailer in Israel (e-commerce technology), which markets fast consumer products (FMCG – Fast Goods Consumer Moving) including dry and fresh food, fruits and vegetables, butcher shop, deli, bakery, toiletries and pharma products, cleaning products and more.

The activity is carried out through an Internet platform that allows the company to manage a complete supply chain, without the need to invest in assets or inventory, starting from the stage of assembling the product basket by the customer and collecting the payment; Collection and packaging of the products, through an operational system operated by the company or through the supermarket companies, operates a delivery and delivery system for the customer’s home.

Although the company increased its sales significantly, from NIS 26 million in 2019 to NIS 86.7 million in the first three quarters of 2020, which is an annual rate of NIS 115.7 million per year (a 343% jump in revenue), the bottom line is losses Heavy. Moreover – the activity loses raw.

In 2019, the company recorded a cumulative loss of NIS 16.5 million, in 2020 the company already recorded a loss of NIS 27.7 million for the first three quarters, ie an expected annual loss of NIS 37 million (a jump of 124% in the annual loss). Apparently, the business model according to which she works will bring her profits only if she manages to reach very high volumes of activity and in the meantime she seeks the funding from the public.

Why would the public give her money? Why should the public fund its losses? The truth is that it’s all a question of price. The company is expected to go public at a value of NIS 300-400 million and it looks high, even very high given its results.