Quickflix shares slump 25 per cent after private equity firm sells out

QuickflixTroubled DVD rental and online streaming company Quickflix has seen its share price collapse a further twenty five per cent today, just a week after venture capital firm Cashel Capital Partners ceased to be a substantial investors in the company.

Quickflix shares today slumped to a record low $0.0015, giving the company a market capitalisation of $2.72m, after being worth $16.2m a year ago.

Asked about the further share slump co-founder and chairman of Quickflix Stephen Langsford conceded: “Our share price is volatile. Quite evidently its disconnected to the strong growth in streaming volumes and new customer signups we recently reported.”

Last week one of the company’s biggest investors Singaporea-based Cashel Capital Partners, sold more than 65m shares in the company.

The Quickflix share price in the last 6 months. Source: Google Finance

The Quickflix share price in the last 6 months. Source: Google Finance

As recently as July, Cashel had owned 16.65 per cent of the company, serving as a buffer to help the management last year ward off a coup after minority shareholders tried to oust the company’s board of directors.

Langsford declined to comment on the sell out of Cashel.

In January 2015 Quickflix reported it had 136,670 paid subscribers, while unofficial estimates put the number of Australian subscribers, using VPN services, to access Netflix at around 200,000.

The share price fall comes as the company continues to try and capital raise, after last year’s failed attempt to raise $5.7m to fund an extensive below the line marketing effort to ward off growing competition in the space, brought in just $650,000 from investors.

Last month Langsford told Mumbrella he would continue to seek investors to fight off the likes of Netflix, Stan and Presto.

“On the capital raising we completed the first part of that just prior to Christmas,” Langsford told Mumbrella. “That was the rights issue among shareholders where we signalled if there was any shortfall then it would be available for the company to look for other shareholders.”

Late last year StreamCo, the parent company of rival Stan, took a $1m stake in Quickflix with redemption rights should the company face a “liquidation event”. Since then Quickflix’s share price has continued to slide.

Nic Christensen 

Update: Cashel has provided the following statement on their sellout with spokesman Tony Smith saying:

“There has been a change of portfolio manager that no longer has the brief to invest in companies that have this profile.

“It has no reflection on the company as an investment but more to do with the positioning of the strategy of the fund.”


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