Technology provider Whispir Ltd (ASX: WSP) was hammered by the market on Wednesday morning, sending the share price plummeting 18.6%.
After closing Tuesday at 78 cents, the tech stock sold for as low as 63.5 cents soon after the market opened for trade on Wednesday.
So what's going on?
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Not happy, Jan
It seems investors were not happy with the company's latest update, released before market open.
Whispir has been a high-growth loss-making business that has been trying to reduce its cash burn this year in response to changed market conditions.
But the update for the quarter ending 30 September showed that its cash receipts of $14.42 million is down 15% compared to the prior period.
The figure is also down 11.5% on the same quarter one year ago.
Why did the cash receipt decrease?
Whispir is a provider of cloud-based corporate communications technology. As such, it saw increased demand during the COVID-19 pandemic with many Australians working from home.
The outfit blamed this phenomenon for the reduced cash receipts.
"This quarter's result reflects the reduction in COVID-19 related revenues compared with the prior comparable period, and the impact of seasonality with the first quarter typically a softer quarter of the year," Whispir announced to the ASX.
"In contrast, cash receipts were up 38% against the same quarter two years ago – demonstrating that the business is still experiencing strong growth, COVID-19 aside."
Whispir's management insisted that its cost-cutting drive has been "effective".
"Operating cash payments across the three major categories of marketing, administration, and labour (excluding the annual short term incentive payments of $1.60 million which occur in this quarter only) total $14.56 million — slightly below the PQ of $14.84 million," stated the company.
"This is despite the weakening Australian dollar against the US dollar, which has affected a portion of the company's cost base."
Arduous march for investors
It's been a painful journey for Whispir investors in recent times, with the share price plummeting more than 71% over the past 12 months.
Whispir shares went for as much as $4.72 in July 2020.
According to CMC Markets, the tech stock is currently rated by one analyst each as a strong buy, moderate buy and hold.
