Redbubble’s bubble is burst. Shareholders punish shares by 25%!

Nick Sundich, October 20, 2022

Redbubble (ASX:RBL), was once one of the ASX’s hottest Ecommerce stocks. But after breaking the $7 mark in early 2021, shares are now below 60c following the latest quarterly report.

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Redbubble is bleeding cash

The COVID-19 pandemic has led to an explosion in Ecommerce activity and it was a windfall for most companies in the space. The companies asserted that the activity would be here to stay even as the pandemic waned, but the reality is vastly different.

In FY22, the company’s Market Place Revenue (MPR) and Gross Transaction Volume (GTV) were barely 1% higher than FY21. And in 1QFY23, both went backwards, by 5% and 2% respectively. The company also recorded a big EBITDA loss of $14.6m after recording a $3.9m EBITDA profit in the prior corresponding period – a figure the company admitted was inflated by face masks.

Redbubble (ASX:RBL) share price chart, log scale (Source: TradingView)

Are better times ahead?

Redbubble shares fell another 22% today, which would suggest a lack of confidence in the company. Management told investors that it would experience revenue growth in FY23 and opex growth would slow down in conjunction with a slowdown in hiring.

How this year’s results will compare to FY20 and FY21 will be fascinating to see. But there will be a high hurdle to jump over considering the company made revenue of $349m, a gross profit of $134m and EBITDA of $5.1m back then.