The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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Phoenix have said they are in for the long term. My guess is they will give it 3 years and if no sign of turnaround then offload to the next sucker. There has been no information from the company in the form of interim updates so we are left guessing how well the company is doing. They have installed a new Head of Auction Department and auctions seems to be quite an active area, however my guess is that retail is taking a battering, especially as the latest news from the 'high street' is not good. SG were making handsome profits in the past from investments, until like a Ponzi scheme it collapsed. Trying to make money from legitimate retail when overheads are still huge is going to be very hard. To get to 20p a share the co has to be worth 100 million. That is just fantasy. Collectors are dying out in many countries, market prices are slipping for most material except the very rare items and SG is severely hampered by the excesses of recent years. I think the very best SG can hope for is to make a very modest profit to keep Phoenix interested and survive into the 2030's.
Under AIM's rules, as far as I am aware, if Phoenix was to buy out the rest of SG, they would have to offer at least the highest price that the stock has traded at in the previous year. However, Phoenix have already publicly declared not only that they are in this for the long term, but that they have no intention of selling out. Having paid out so much already for this stake, I cannot see any reason for Phoenix not keeping their word - they certainly cannot sell out at today's price. Until SG issues RNS's which give investors reason to hold the stock, the price will not rise. As the next RNS is due at the end of September, that is a long time to wait. Phoenix's way out it would appear, is three-fold: a. oversee a number of decent trading statements that lead to a material price rise for the shares. b. lower their stake to perhaps 51% when the price has risen enough. c. sell out, if they wish to, if the price rises high enough. I would imagine they will not even consider selling out before the stock price is well into double figures.........perhaps 20p - 30p range? This stock is so illiquid that it could get there sooner than some of you think. Let's face it, it fell from much higher levels very quickly after all..