Bilzerian's Ignite reports aren't the good news he claims

Jon Pill
Posted on: January 21, 2021 10:33 PST

Editor's note: Many of the views expressed in this article are solely those of the writer and are not necessarily those of, its owners, or its employees or affiliates.

Delving into the social media of trust fund kid Dan Bilzerian is always a fascinating journey into male fragility. No slight is too small for him not to hold a grudge about. And every tweet and Instagram post feels like he is at war with reality. Especially when it comes to his company Ignite, which has taken a bit of a roasting since he took the company public.

The success of his business is another illusion he has to curate carefully. It is like the beard which he cuts to square off his weak chin or like the women he pays to smile in his Instagram posts.

The stakes are much higher when it comes to Ignite. Bilzerian relies on investors to prop the company up. The business still doesn't show any signs of being able to stand on its own two feet yet, and it seems to have him jumpy.

Bilzerian tweeted out a picture of the front page and a half of Ignite's unaudited Q4 financial report caption, "Ignite announces a profitable 4th quarter, I guess the press and the dumb f**king YouTubers were wrong. Shocking."

But this needs to be taken with a healthy pinch of salt.

Hating the haters

The cryptic references to "press" and "YouTubers" are aimed at specific content. Bilzerian almost certainly veiled them to avoid giving oxygen to his detractors.

The "press" refers to a Bloomberg article that covered Ignite's financial apocalypse in which they lost $50 million in 2019. "YouTubers" most likely refers to a video by "SunnyV2" that went viral late last year.

Of course, the actual meat of the report — even the small amount he showed us on Twitter — doesn't in fact contradict Bloomberg or "SunnyV2" at all. The business can hardly be called profitable on the basis of what we've seen. Despite this, the pretense worked. Ignite's share price leaped from CA$0.67 per share to CA$1.54. Unfortunately, that jump is already in the process of disappearing. The stock closed today at CA$1.15 per share.

It is difficult to tell whether Bilzerian genuinely doesn't understand his own business reports when he tweets like this. Equally likely is that he does understand and is simply spinning the bad news as best he can.

Understanding Blitz's twittering

The first thing to note is that the report it unaudited. Which can mean anything from "just needs the auditor's signature" to "every word needs rewriting."

The other thing to note is that the "revenue," which is much touted for the first half page is a meaningless number. Revenue is simply the money that flowed into the company. What matters is profit. i.e. how much of that revenue is left after accounting for how much money flowed out of the company.

Did Ignite make a profit in Q4 2020? Let's dive a little deeper.

Ignite did make a "net income" of $4.9 million in Q4 2020, according to Bilzerian's report. However, one should compare that to the previous three quarters, in which Ignite lost $21.8 million total. Put together, that's another losing year to the tune of around $17 million. Not as brutal as the $50 million loss in 2019, but not something to brag about. It still means the company is over $65 million in the red.

Further clouding the $4.9 million number is the statement that "earnings from operations were break-even." Meaning that the $4.9 million didn't come from the sales of CBD products and vodka.

In fact, the report is rather shy about where this "net income" derives from, but most likely it represents Ignite writing off debt or selling more shares. It certainly does not speak to the viability of Ignite as a business concern.

This is all more Bilzerian bluster. While it remains possible that Ignite could at some point be able to make money for investors, Bilzerian has yet to prove it. His triumphal tweeting is clearly premature.

Featured image source: Twitter