The BetMakers Technology Group Ltd (ASX: BET) share price has been one of the worst performers on the All Ordinaries Index (ASX: XAO) on Friday.
At the time of writing, the betting technology company's shares are down 14% to a 52-week low of 26 cents.
Why is the Betmakers share price plummeting?
Investors have been selling down the BetMakers share price today following the release of the company's first quarter update.
For the three months ended 30 September, the company reported a 13% increase in cash receipts from customers to $23.8 million. Management advised that this is largely the result of the expansion of the Global Betting Services platform offering, underpinned by a stable Global Tote customer base.
However, the company continues to operate at a loss despite this top line growth. Due largely to its enormous spend ($17.7 million) on staff costs, the company reported an operating cash outflow of $5.9 million for the three months.
In addition, the company spent approximately $11.7 million buying back 29,126,884 shares during the quarter. This works out to be an average of 40.2 cents per share, which is now a 54% premium to the current Betmakers share price. Not the best use of cash for a loss-making company, it turns out!
Combined with other cash outflows, the company saw its cash balance fall from $87.55 million to $64 million at the end of September.
Short sellers will be smiling
Following today's decline, the BetMakers share price is now down approximately 70% since the start of the year.
One group of investors that will be pleased with this decline is short sellers. BetMakers has been one of the most shorted shares on the All Ordinaries all year and that remains the case today. At the last count, short sellers were holding 14.1% of its shares short.
