Farmers Edge: Is It Worth Investing?

Farmers Edge (FE) is an ambitious digital start-up company that was founded in 2005 by Wade Barnes with the goal of helping small rural farmers. Farmers Edge sought to bring data-driven technologies to small farms in Canada and help struggling farmers optimize crop rotation and produce a larger yearly yield.

The company would use satellite imaging to monitor the state of soils, current weather patterns and predict optimal timing for planting certain crops.

However, what seemed like a good idea back then did not go as planned. Farmers Edge went public in March 2021 and launched an IPO with a promising starting price of $20 per share on the Toronto Stock Exchange. The company managed to keep its high starting price stable for the next month but experienced a slow deterioration amidst public rumors of poor management and corruption. 

Financial issues and poor performance

Today, Farmers Edge market cap stands at $110 million USD, which means that it has lost over 86% of its overall value in the past 9 months, as the company’s capitalization was about   $791 million in March. This raises a lot of red flags; a company with a sizable revenue growth doesn’t usually lose all of its trading volumes in such a short period. What happened?

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It seems that Farmers Edge experienced quite a turbulent year, both financially and within management. The company experienced a drop in revenues during Q2-2021, forcing investors to panic sell their stock. The company made its earning data available during Q2-2021 in August, which caused a sudden halving of the share price.

Using the data from Q2-2021, we can see that over $1.5 million of commercial contract subsidies in the second quarter of 2020 did not re-subscribe in 2021, meaning that the company lost a considerable amount of business over the year.

On top of everything, the ruling Chief Financial Officer of Farmers Edge, David Patrick, resigned from the company in 2021, stating that he wasn’t happy with the company. The departure of a CFO from a company is never a good sign.

Farmers Edge’s bad management and poor choices

Based on the low-performance score of Farmers Edge in 2020 and 2021, we can safely assume that the company isn’t doing so well. But, for the sake of posterity, let’s dive into the rumored mismanagement issues plaguing the company.

Wade Barnes, CEO of Farmers Edge, decided to employ friends and relatives in high-level positions within the company – his wife became CMO and his best friend, Trevor Armitage, became a COO. Unfortunately, neither of these individuals have had the proper training to perform well in their positions.

Upon closer inspection, we can reveal certain discrepancies in these high-level positions. Marina Barnes’s official biography previously stated that she encouraged the company to expand within CIS and US markets within 2009-2013 and that her push to expand had resulted in “multi-million-dollar sales opportunities”.

However, the company’s revenue from its Eastern European division accounts for only 2% of overall profits. Furthermore, official Farmers Edge documents now state that Marina Barnes has served as General Directory of the company’s subsidiary in Russia since 2016, resulting in some odd mix-ups.

The bottom line is that the CEO of the company hired incompetent and unprofessional staff to manage his company, resulting in the company bleeding money and taking a nosedive.

Farmers Edge’s incredibly high employee turnover

Perhaps it will come to nobody’s surprise, but the company which mismanages itself completely doesn’t seem to hold on to its employees. Farmers Edge has had quite a lot of high-level manager positions remain unoccupied for an extended period of time:

  • Joel Duda – July 2019 – May 2021: VP Technology
  • Perry Liu – March 2015 – March 2021: Investor and Board Observer 
  • Lori Robidoux – 2005 – 2021: CFO, Chief Corporate Development Officer;
  • Jorge Padua – 2016 – 2021 VP of Operations Latin America.

It’s always odd when such high-level positions experience such rapid turnover over a short period of time. It signals unrest within the company.

Negative customer reviews

It’s not surprising that a company with such financial problems and high employee turnover will also disappoint its customers. Upon closer inspection, we’ve managed to find a lot of customer and employee reviews, most of them negative.

Once again, management is to blame for the problems in the company. When you hire personnel that have not had the proper education to fulfill their given role, the company will suffer. Combine that with managers and CEOs who don’t seem to care about their business, and you get a bubbling inferno of embarrassment.

So, is it worth investing in Farmers Edge?

Absolutely not. At its current state, the company poses a huge financial risk to all investors. Q2 financial reports have shown that the company has continued to bleed money for several years. The company stock shares have taken a nosedive and don’t seem to have a snowball’s chance in hell to come up again.

Unless the company experiences a radical reformation (change of CEO, COO, and managers), the Farmers Edge holds too many red flags to be worth investing in.

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