THE ANALYSTS of Taking Stock say that SSL Venture Capital (SSLVC) will have to answer for its decision-making in choosing companies to acquire. 

The company has been the centre of attention recently, as analysts and investors wait to see if it will be purchased by Micro-Financing Solutions Limited. If purchased, this would be the second time the company’s ownership has changed hands. 

SSLVC was listed on the Jamaica Stock Exchange in August 2018, following a reverse takeover of failed music publishing company C2W. It then acquired equity in Blue Dot Data Intelligence, Muse 360 and Bar Central. 

Muse 360 Integrated Limited stopped operations in August 2019 and Bar Central in December 2020. SSLVC recently sold 30 percent of its shares in Bluedot back to the founder, Larren Peart for a reduced cost, and the other 20 percent to start-up company, Yes Iyah. 

Equities Trader at JMMB, Clive Charlton

Speaking with Kalilah Reynolds on Taking Stock, equity trader at JMMB, Clive Charlton said these decisions have raised questions about the company’s decision making and leadership. 

Business writer at the Jamaica Observer, David Rose, added that SSLVC currently has more liabilities than assets. He noted that having sold its stake in Blue Dot, and with Muse 360 and Central Bar no longer operational, the company has no way to pay down its liabilities. 

Money services firm Micro Financing Solutions has offered to buy the company for much less than its market value. 

Charlton said that even if SSLVC is acquired by Micro-Financing, investors might still feel the pinch. 

 “When you look at the financials, even if it is taken over, even if Micro-Financing is successful at buying out the majority shares… there will still be potential losses for investors,” said Charlton, noting that SSLVC has been in the negative for the past three consecutive years.

“They have faced challenges with their portfolio holdings, non-performing and under-performing but they have faced other challenges with respect to them being listed on the Jamaica Stock Exchange. Things like this don’t work well, in terms of how investors see the company,” he said. 

While acknowledging that venture capital business comes with high risk, he was adamant that even if the company is bought, its management must be taken to task about its decision making. 

“Micro-financing  may spend the money to take over the company, but you now have to ask: who has been leading the company, who has been making the decisions for this company?” he questioned.

“You bought Blue Dot for a certain value, then you sold it back to the very same person you bought it from for a reduced value. What thought process went into this decision making in the first instance?” Charlton continued.

“What was your outlook on your own company when you bought this company in the first place? When you bought this company, did you have the capital to invest in it, did you have the technical know how?” he added. 

He said these are important issues that need to be addressed if stakeholders are going to continue investing in the company. 

SSLVC’s stock price, which had seen a surge after news broke that Micro-Financing had made an offer to acquire it, fell again last week. 

CEO of Profit Jumpstarter, Keisha Bailey, said that is to be expected. 

“If the deal doesn’t go through, those who would have bought up the stock in anticipation of a done deal are going to suffer losses. Because as the deal falls through, the stock is going to take a hit,” she explained. 

“Overall, a company like this that is struggling with cash flow problems and profitability problems, in the long run, will continue to struggle from a price perspective as well,” she added. 

The board of SSLVC is said to be considering the offer from Micro-Financing. 

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Watch THE ANALYSTS discussion on Taking Stock: