Disappointment: Arba Robotics
Locust Robotics
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The developer of solutions in the field of radar continues to distance itself from the bombastic promises it published during the merger of the spack on Wall Street. The results are far from her own predictions, and also below analysts’ expectations. The forecasts for the quarter and the coming year also do not come close to the analysts’ expectations. At the same time, it turns out that the rumors about a collaboration with the electric vehicle giant Tesla, which boosted the stock by almost 50% last week – were not true.
In the fourth quarter of 2022, the company reported an adjusted loss on a non-GAAP basis of 19 cents per share on revenues of only $150,000, far below analysts’ expectations for a loss of 14 cents per share on revenues of $1.9 million. For comparison, in the same quarter last year the company lost 20 cents per share on revenues of $520,000.
The forecast is also very weak: The company expects revenues of only 5-7 million dollars in the coming year, significantly below the consensus of analysts who expected 40.7 million dollars. In any case, even those few millions are still on the deer fund – Arba hopes to win tenders from four car manufacturers and reach full production in the fourth quarter. Will she succeed? Not sure. Arba also expects an adjusted EBITDA loss in the range of $32-35 million.
The illusions sold by the company in the SPAC issue cost the investors a loss of 50% of the investment
It should be noted that at the time of Arba’s IPO, it sold illusions to the investing public. She predicted that in 2023 she would bring in 76 million dollars (and now, as mentioned, she predicts a mid-term of only 6 million dollars) and no less than 312 million dollars in 2025. So it is possible to sell illusions, but at some point you also have to meet the targets and the problem is who pays the price along the way This is the public of investors, who may have believed in the company and bought the stock at an excessive price. Since the IPO, the company has burned 50% of the investors’ money.
Of course she wasn’t the only one. The SPAK method allowed companies to ‘bypass’ the American Securities Authority, the SEC, and issue through the back door. And if in a normal IPO it is forbidden to publish forecasts, then in a SPAC everything is allowed, and the companies took advantage of it. But the result was a crash of all the SPAK shares by many tens of percent, sometimes even 80% and even 90%. Destruction of value in the full sense of the word.
But already last year it was possible to see that Araba was still not in the right direction. It expected revenue of $7.8 million in 2021 and $13 million in 2022, which just ended. In practice, it brought in only 3.5 million dollars last year (and only 2.2 million in 2021. By the way, the analysts expected it to bring in 5.3 million dollars this year.
Will she survive?
Arba has another 54.2 million dollars in the bank, after it burned 40 million dollars from current operations in the last year. If she continues at this rate she will survive the coming year. But what about the one after it? Maybe she will be forced to become more efficient and lay off employees and raise money.
In any case, following the overly optimistic forecasts, Arba was issued at a value of 664 million dollars (after the money), and this after it wanted to raise at a value of 723 million dollars. It now trades at a value of only 317 million dollars.
Another illusion: collaboration with Tesla
A week ago there were persistent rumors about a collaboration with the electric vehicle company Tesla
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. Arba’s stock jumped as a result by 48% that day even though the company’s response was ‘nothing to update’. But today it turns out that it was not real but just rumours. If you want – ‘buy on a rumor, buy on a rumor’, and it doesn’t add to the stock (to jump following the rumors – click here).
And what are they saying now in society?
“During the past year, we focused on innovation and strengthening our partnerships with leading Tier 1 companies, as well as running pilot programs in partnership with leading automotive companies, in order to speed up Areba’s transition to the commercial stage,” said Kobi Marenko, CEO of Areba after the weak reports. 1 Our companies are making significant investments to reach the production of radar systems. We recently received a standard mark in the Japanese market for our RF chipset, we started a development project with a leading automotive company, and in field tests with tier 1 companies and automotive companies in Japan, this is a new and significant market for us.
“We are satisfied with our progress in 2022. We have reached the exciting chapter of moving from the phase of proving the capabilities to the production phase, where we can provide our advanced solution to the market. We continue to gain momentum and see increasing demand from leading companies in the industry, and believe that Arba is well positioned for growth in the coming years.” Marenko concluded.
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