Sometimes investors are perfectly comfortable with sticking to loss making companies as long as the company can generate consistent growth. However, at the same time, the rate of cash burn at a loss making company is something that investors need to be wary of.
That brings us to the subject of the company 23andMe Holding (NASDAQ:ME). Over the course of the past week, the stock has moved strongly as well and managed to deliver gains of as much as 14%. However, in this context, a look at the rate of cash burn might give investors a good idea as to where the company stands.
At the end of the period ending in June this year, 23andMe Holding reported that it had a cash balance of $770 million. However, perhaps more importantly, the company also reported that it had zero debts. In the previous financial year, the company had burned through $90 million worth of cash.
At that rate, 23andMe Holding has a cash runway of 8 and half years. That is a considerable runway within which the company can grow and may even turn profitable to make the cash burn inconsequential. Hence, the 23andMe Holding stock might be worth tracking at this point.
See what other oil and gas investors have discovered in the energy field: Allied Energy Corp. (OTCMKTS:AGYP). AGYP is a gem because it is pumping oil from Texas and providing needed product as major suppliers are short in meeting demand in oil and gas. AGYP is different because it now produces barrels from proven well sites located on American soil.