The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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Anyone comparing TXP share price to BPC's in all honesty doesn't really understand how or why they are investing and if they've made a good profit they should sell up, pat themselves on the back and go away and learn a bit more about company valuations and how that relates to a share price before investing again.
TXP have around 183m shares in issues with a market cap of c.100m. For BPC to be valued at 10p per share post merger and after full dilution of CLN, etc when we will have around 4 billion shares in circulation would be a company worth around £400m.
£400m for a company that only produces 560bopd is a tall ask. When BPC go to spud I think most would agree a value of around £200m - £250m would be good going, so divide that by the number od shares you think will be in circulation at the time of spud and you have your share price. 5 to 6p after a merger at spud?
Unless they have another plan for funding that mitigates further share dilution, which is what most of us want to know before voting!!!! Give us a credible plan to come in around what we expected dilution to be and some of us will vote yes.
And take Resolution 3 off the table!!!
Have 50 mill in the bank and less need to dilute though in that case.
"..That is why I am predicting 8-10p in the run up to the drill."'
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If we do a farm-in pre drill for say 50% and get diluted accordingly having many more billions of shares in issue, do you still expect 8p-10p per share? No, I didn't think so.
'10p pre drill pessimistic' - what are your feels then? I would be delighted with 10p before the end of 2020. What are your thoughts Wotitsworth
Personally I think 10p pre drill is pessimistic. Euphoria normally sets in and FOMO takes over. As you say, DYOR
This opportunity is not dissimilar to TXP or SOU from a risk reward stand point. In June 2016 SOU was 17p. By Sept 2016 it was over 90p. TXP 7 months ago was 13p. It is now 56p. I sold SOU on the rise at 77p and still hold TXP. I bought pre the rises on the back of the potential drills they were about to undertake. The CERP/BPC business has a similar opportunity with the drill in q4 to be transformational. That is why I am predicting 8-10p in the run up to the drill. Thereafter it obviously depends on the outcome but in summary there is scope for the CERP/BPC merged business to multiply after the merger in the run up to the q4 drill. Dyor. Good luck, Brighty