The Brainchip Holdings Ltd (ASX: BRN) share price had another difficult month in August.
The semiconductor company's shares lost 11% of their value over the period.
This latest monthly decline meant that its shares were down approximately 65% on a 12-month basis.
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What happened to the Brainchip share price?
Investors were hitting the sell button in August following the release of another abject update.
That update revealed that for the six months ended 30 June, Brainchip delivered revenue of just US$115,606. This averages out to be a cool US$19,268 per month, which is likely to be less than most CBD cafes pull in.
But they don't trade with a ~$600 million market capitalisation, because that would be outrageous.
They also don't post half-year losses of US$17.15 million because nobody would be willing to fund that sort of cash burn.
Why is Brainchip still commanding such a large market capitalisation?
The market is of course forward-looking and valuations reflect future potential.
It seems that there are still enough speculators out there who believe Brainchip could have some game-changing technology that will make them rich. That's despite the company competing against absolute behemoths that spend billions upon billions on research and development and have the best talent in their roster.
It is also worth noting that we have been here countless times before. If you spend time and go through Brainchip's annual reports for the last five years, you will see how the company has promised the world numerous times and delivered nothing. Something always seems to get in the way and the company dilutes shareholders by tapping LDA Capital for funding to stay afloat.
Did you know that Brainchip had approximately 1 billion shares on issue at the end of 2017? It now has almost 1.8 billion. And you can bet that this number will continue to rise in the future.
How long shareholders will put up with this is difficult to say. But with the company's new technology due to be released in the very near future, Brainchip's day of reckoning will arguably be drawing closer if revenue doesn't start to reflect its valuation.
