CEO Ben Bilski on 32% drop in NAGA Group shares
After social trading focused online broker NAGA Group (ETR:N4G) reported late Tuesday that it was going to revise its 2021 and 2022 forecast figures based in part on new IFRS accounting standards for reporting crypto holdings, the company’s stock went into something of a nosedive, dropping by 32%.
Clearly, the current stock market environment is in the mode of shoot first and ask questions later. In the same release NAGA noted that it has actually done fairly well in the first half of 2022, with its core brokerage business generating more than €33.5 million in revenue in the first half of 2022, significantly higher than 2021’s €22.3 million in revenue.
But the markets seem to focus nowadays on bad news, not good news, and look to “sell now” and worry about buying back later in a very risk-off environment.
NAGA CEO Ben Bilski took to social media to both defend his company and strategy, posting a fairly interesting message which we will repeat below. His words seemed to have some effect on the market, with NAGA shares climbing a little part of the way back on Wednesday, up 6% to €1.69 per share.
Yesterday we published news that we had to revise our guidance of 2021 and withdraw our 2022 guidance mainly due to IFRS accounting adjustments related to digital asset holdings and negative market conditions especially in the crypto market.
Whilst the market / media reacts immediately negatively and raises eyebrows, I want to take a stand and look at the facts for NAGA:
We have grown our topline in 2021 by 100% compared to 2020. The year before it was close to 400% growth. In 2022 we have grown the top line by another 30%, we see a healthy customer signup trend and all this, during a market crash caused by an inflated economy which leads to increased interest rates which amongst others affects growth on a global scale.
Fact again: NAGA proved a growth of more than 10x in the last 3 years. Indeed, we estimated higher profitability and we expected higher contribution from our crypto segment, but one cannot go out now and paint a picture that everything is suddenly doomed.
It is true that only a few months ago the market was in a completely different place. Everyone was bullish, markets had hit all time highs. However, several events – especially the war – have created a new reality.
It is challenging we all agree, but at NAGA we believe that it’s not what happens but what you do about it that determines the outcome. This company has a solid fundament which it operates on – and we intend to win!
We have expanded our product segment and have a holistic platform ecosystem with NAGA Trader, NAGAX and NAGA Pay. We cover trading, payments and crypto – all regulated in each vertical with a very strong product offering. This is an asset, this is value that has been built up and ultimately this is our USP!
We live through the worst stock market crash of the last 50 years and yes, it puts pressure on us and our peers. But pressure makes us more focused and more determined than ever. History is written during the tough times, not during the good times!
We continue to see crypto as a major growth driver for the future, there are still high adoption rates of millennials and digital natives when it comes to investing and we still believe that super apps for finance stand to gain massive adoption in the future.
We continue to optimize, to build and to pursue the path we set out to pursue. We are here to stay and we will push harder than ever to become a stronger than ever company – especially when markets come back and confidence weighs over fear.
I am not standing down, I am not allowing frustration and short-term thinking to influence a long term vision in a market that is seeing the largest transformation in its history.
The situation affects us all and neither NAGA or myself are immune to this but I will never yield and I am here to keep creating value for everyone who is involved with NAGA – no matter what people might think or believe for now.