A few days ago I wrote about Moa and their latest Annual Results. There have been a few articles analysing these results (see below), and commentary from the investment industry.
Since then Moa shares have continued to drop on the back of sharebrokers downgrading their recommendation on Moa stock from “neutral” to “underperform“
The questions the media have raised seem to be around:
When they run out of money what happens next?
– do the existing shareholders get called on for more cash?
– will there be another issuing of shares, diluting current shareholders?
– will it be debt that is taken on to continue fund the company?
– will the Business Bakery and Pioneer Capital provide funds as a loan?
How will the new brewery be funded? Are they even going to build a brewery?
Will the main shareholders the Business Bakery and Pioneer Capital turn around, make an offer and buy out all shares and delist the company?
Will Moa merge with Stoke and Hancock’s to form the largest craft brewery in New Zealand? Or even Tuatara?
The questions I am currently thinking about:
With many people having Moa as their top of mind “craft / boutique brewery” in New Zealand does their current predicament and negative media attention cast a shadow over the whole craft beer industry?
Has this ultimately reduce the appetite of the public to invest in the (craft) brewing industry in New Zealand. i.e. if a brewery wanted to do an IPO, would they now be overly cautious and less likely to invest in a craft brewery, based on Moa’s performance?
On the flip side, even though we are seeing this negative angle, does it really matter as Moa have pretty much single-handedly raised awareness about breweries and craft beer in New Zealand to the general public. As much as the beer geeks might hate on them, the mainstream beer drinker in New Zealand now thinks about beer as more than just Lion and DB now.
Taking it to a random place, should the industry rally together and support each other to raise the awareness of craft beer which includes Moa. Do we (craft brewers) all have more to lose if they fall from grace in the eye of the public? Maybe this is something the Brewers Guild of New Zealand discuss on behalf of its members.
Moa shares tumble to new low
– 3:42 PM Thursday May 29, 2014
Shares in Moa Group, which raised $16 million when it went public in 2012, plunged to almost a third of its listing price after the boutique beer maker posted a wider full-year loss
“If you look at their cashflow statement they appear to be some way away from generating positive cashflow.”
Moa “unappetising” – analyst
– 1:00 PM Wednesday May 28, 2014
Sharebroker Forsyth Barr has downgraded its view on Moa Group, saying the company is an “unappetising investment case” and is expected to burn through its remaining cash reserves over the next 12 months, which may lead to a capital raising.
“However, we continue to struggle with the investment case in light of slow growth in key offshore markets and a trend towards lower margin products.”
Moa has turned a corner: boss
– 5:00 AM Wednesday May 28, 2014
“The company is looking at a range of financing alternatives and timing, and we will keep the market abreast of plans as soon as they are finalised,”
Yeah moa is dead now.
I can’t imagine how morale is doing in there. Particular with Geoff as a taxidermy specialist pretending it’s still alive.
It’s completely failed to launch and damaged the credentials of craft brewers. Probably because all along, Geoff is a for want of better words, a pimp and beer hustler. Not a genuine brewer. And Scott is waking up now, he got hustled.