4 Reasons I Knew Dubber (ASX: DUB) Was A Dumpster Fire

Recently, I was asked to talk about Dubber (ASX: DUB) on Ausbiz. Dubber is one of the worst listed securities in Australia, I never been long or short the stock. Currently, the stock is suspended from trade while the company investigates what happened to around $26 million that was supposed to be in cash. Whether or not Dubber ever comes out of suspension, it is still a shame that it remains listed on the Australian Stock Exchange.

In order for all investors to learn from the disastrous share price performance of Dubber (~$4 to 22c to Suspended from trade) let me explain 4 simple ways I knew it was a dumpster fire.

Dubber Has Trash Gross Margins

Over the last four years, Dubber’s gross margins can be easily calculated by subtracting direct costs from revenue, then dividing that number by the revenue. Its gross margins were as follows:

FY 2020 gross margins of ~32%

FY 2021 gross margins of ~49%

FY 2022 gross margins of ~30%

FY 2023 gross margins of ~54%

At no stage did “revenue less direct costs” ever come close to eclipsing employee expenses. But more importantly, no software business with any competitive advantage would have such low gross margins. It simply is not possible. If your gross margins are averaging somewhere from 30% – 50% then you are essentially reselling some other kind of product or service.

Dubber Was Constantly Issuing New Shares

Over its listed history, Dubber was constantly issuing new shares. This is how it funded its ongoing operations. Even if it wasn’t a dumpster fire of a business, this level of constant dilution would ensure that shareholders have a tough time.

Dubber’s Potential Was Overhyped

Back in 2021, Dubber took advantage of a lofty share price to raise capital at $2.95 per share. As part of that capital raising, it included this slide in its capital raising presentation.

Now, I don’t know about you, but to me the above slide seems to suggest that the company is on a path to earn $100m in revenue or ARR by 2023. It explicitly says “the larger the company gets, the faster it grows”.

In actual fact, FY 2023 revenue came in at $30m, which was 20% growth, down from 25% growth in FY 2022.

Dubber Had Corporate Governance Red Flags

There are actually quite a few corporate governance red flags for Dubber. Indeed, major Dubber shareholder Alex Waislitz said back in 2017 that “one newly appointed director resigned after only a few months and the other has a close relationship with the existing CEO.”

Subsequently, in October 2022 Dubber was suspended from trade for failing to lodge its audited accounts on time. Then, when it did lodge the accounts, it had to disclose that its revenue was a whopping 28% lower than it had disclosed in its (unaudited) Appendix 4E.


To invest in Dubber you would have to ignore very many obvious signs that the stock was going to decline over time. The Dubber share price should never have reached as high as it did. In my view the reason the Dubber share price got so high is because sophisticated people promoted the stock to people with low intelligence. The main conclusion I reach from analysing Dubber is that lots of people invest in stocks in accordance with the greater fool theory: they buy a bad stock in the hope a bigger idiot will pay a higher price in the future.

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