The stock market is turning ugly for former pin-up Blur (BLUR:AIM). The small cap issues its second revenue warning this year after January's scare which sends the share price down 40% to 167.5p. The services exchange platform business's path through Aim's seeming Elysiam Fields are turning out to be laced with mines.

Another great chunk of revenue is moving to the right as projects become increasing complex and longer to execute, putting the brakes on revenue recognition. Previously booked $3.6 million sales will no longer be included in the 2013 figures, slashing the expected top line to $4.8 million. Analysts had been expecting $9.5 million. The changes are down to Blur adopting a more conservative accounting policy.

But what really seems to be spooking the market is talk of a future cash call. This is not entirely unexpected, as Shares flagged at the start of May. Yet sceptics might argue that is not the carefully planned fund raise to fuel future growth like its $11.5 million placing almost a year ago. This time round has necessity written all over it.

With $5.6 million net cash on its books investors might be over-playing the desperation, yet they are clearly concerned about dilution. Just how big a discount Blur will have to offer institutions to pull off a successful placing is anyone's guess, but as the shares collapse, it'll likely be at a lower price than last May's 150p level, and miles below the stock's record 792.5p, hit just four months ago.

BLUR GROUP - Comparison Line Chart (Rebased to first)

How did it come to this, investors might ponder? 'The root cause is success rather than fail,' argues Panmure Gordon's respected technology analyst George O'Connor. 'The front end of the organisation is operating at a different speed (light speed) than the back end. Projects submitted to blur's Global Services Exchange have increased in value, complexity and duration, a trend that is continuing into 2014.'

Full-year results are due next week so more detail are likely then, but for the time being, even house broker N+1 Singer is refusing to guess at future revenue trends, saying 'we are putting our estimates under review until a further update.'

Issue Date: 12 May 2014