In the meantime would it be worth considering sinking a small shaft and a working mine in order to access some of our valuable assets. Considering the area's expertise ( ex coal mining) and modern technology, this might not be as expensive as one might imagine. This could be worked along side, and as well as our current plans for mine, tunnel and harbour. It would be self cash generating. Products could be sold to the home market. We would at least have some income instead of relying solely on borrowed money. It would give some exposure to our products plus I could buy some for my tomatoes. Am I being too simplistic? What are your thoughts?
Hello Scotman, as an investor in sxx ,I care what the share price is and will be .
I was taking the market cap of 2 point 4 billion as read, whatever the ratio of debt to equity was.
The share price for our 2 point 4 billion pound company can vary widely depending on the number of shares issued.
So for the above m/cap if there were 10 billion shares I would be unhappy and if there were 4 billion shares I would be happy, and a sliding scale in between. So the price that new shares are issued at matters to me, and the factors that influence this also.
I can see the sense in waiting for better news in order to push up share price before going to the market with a placing price. At these volumes a penny can make a hell of a difference. As I've said before placing price needs to be below actual price in order to give some incentive. Otherwise they would just buy on dips (which I think some are doing already). This doesn't help SXX at all. Dilution nearly always benefit the company, very rarely shareholders.
These days I like the "what will be will be "approach. I really don't want to go back to the days of fishing out my Parry's Valuation Tables to consider discounted cash flows and the year's purchase of a £ in perpetuity (especially in metric!). The fact of the matter is no one on this board has any real influence over the end result come the day the finance arrangements are announced and the market, being the market, will do its unpredictable own thing, much as we've seen in the past. But I guess it's entertaining banter while you're waiting.
I was merely pointing out that the share price would depend on the number of share that had been issued. The dilution. --- You mean the share price will depend on the market capital of the company divided by the volume of shares issued? That's hardly rocket science. GK did his sums on a benchmark of 50/50 for the stage one monies. It's fair to say the MC will be what the MC will be and the sp will be based on that! Split hairs for ever but you're stating the obvious!
Negotiations for debt and equity have to run concurrently for a win win situation for both the equity investor and the company.
I agree. Do you think that they will be announced separately or together?
My original post on this subject was assuming that the debt and equity were in place on a 50/50 ratio and we were post a finance deal being announced. Gk had speculated that at this point the company may have a market cap of 2 point 4 billion and I was merely pointing out that the share price would depend on the number of share that had been issued. The dilution.
Equity investors have less priority than lenders in the event of failure hence are exposed to more risks. Highly unlikely for equity investors to go in post debt deal announcement because SP can go either way depending on how the market perceive the terms of the deal. Negotiations for debt and equity have to run concurrently for a win win situation for both the equity investor and the company.
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