👉 Background: Dubber is a voice recording software company that was founded in Australia in 2011. It specialises in call recording and connects with platforms like Zoom, Microsoft Teams as well as Telstra, Optus and Vodafone. Yep they help with the: This call may be recorded for training or quality purposes.

👉 What happened: There have been a couple of major red flags for Dubber Corp over the last few months.

• It was meant to lodge its annual results in August this year… but it didnt 🚩
• It released ‘unaudited results’ - which are results not properly reviewed by an independent 3rd party 🚩
• Dubber’s shares were suspended at the beginning of October 🚩

👉 What else: Now, the annual results have been released but they warned that the revenue from the unaudited results was actually overstated by $10m. Eeep. And investors were NOT happy.. In fact, they were quite panicked so the share price dropped more than 30% at one point.

What's the key learning?

💡While it’s important to demonstrate that you can generate revenue, it’s equally important to show you can collect that revenue. So bad and doubtful debts are the black sheeps of the profit and loss statement.

💡Bad debts arise when a business reluctantly concedes that the debt isn’t recoverable from a customer (after much pestering..). But a doubtful debt is a little bit better.

💡It’s kinda like a flag - “hey, this debt is looking like it may turn into a bad debt.. but we’re still hopeful”. But in the eyes of investors, it’s as a good as gone. And that’s part of the reason why investors have whacked the company with a major sell off.

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