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@MacTrader
That's an interesting idea. I'm sure GM must be reviewing all options now regarding how to resolve this issue in the best way going forwards. After the massive fall back in the SP to the £ 7 -£ 8 range GM commented:-
"Junior markets are sentiment led and despite fundamentals can react irrationally. IMO eventually sentiment will catch up with fundamentals. If they don’t then we can leverage these fundamentals in a different way to address the fickle nature of junior markets"
Not totally sure what that could look like but your idea is not a bad one. Possibilities:-
1. The Buy back to reduce Liquidity. Like this however probably better to spend on spend on acquisitions (maybe a bit of both)
2. A move off the Bourse to a bigger more mature market with a greater reach - love this idea
3. Encourage a partner they work closely such as AZN to BUY in and take a chunk of stock and reduce liquidity that way as a long term partner.
4. Once they have the future plan set talk to a major VC and see if they are interested in buying in again to reduce liquidity and support longer term SP growth.
Interesting times.... some good ideas...
Pork's
I would love hear more butchers. fascinating stuff.
Yes shorting has but not the amount and the use of bots and algorithms. The game has really changed at the expense of the small shareholder who faces volatility that is not normal for holding a share. Novacyt is an example. Cash, revenues and prospects are all good and the price has been trashed by computerised sells placed in volume to drive the share price down. I think it is scary..
Hasn’t shorting been around for decades Butchers?
The unfair nature in favour of the bigger investor/shorter has changed the rules for the stockmarket. At the moment we have loads of cash, new products and good revenues.
Nowadays that is the reason to attack a share to buy the shares cheap. It gives a headache for the management and robs the smaller investor. Novacyt are in a great position to stop this practice and enhance value. Or it will be rinse and repeat on any share price rise.
There is a process to follow in order to initiate a buyback and subsequent cancellation of shares.
The first thing the board have to decide is strategically what is the plan for the cash in hand? If there is no planned strategy then they may as well either a) reward shareholders with a dividend policy or b) buyback some shares at a limit price (450p and below for example) and cancel them to enhance EPS.
My guess is they have plans for the cash.
tkr234, are you suggesting that the share price is not allready on its ar*e? I beg to differ.
Agreed Butchers, that was the plan. It would be earnings enhancing in the short and long term plus the increase in the share price PRIOR to the big launches would protect us more from a low ball takeover offer.
B2H, agreed that the war chest wouldn't be the biggest at circa £90m after share buyback but for me I would like a smaller target we can organically grow with additional funds. If the target is already reaching it's potential then we will have to overpay. That's why they aren't rushing, we need to be savvy as we won't get too many chances.
We have brokers. It now makes sense after the recent drop to use them. Buying back 7.1 million shares at 5 pounds is 35 million approx. Earnings are increased by 10% in one foul swoop. The drop in liquidity would also make it harder to keep manipulating the share price. I would not be surprised if a share back led to a substantial rise
HarChris,
Even more impressive would be :
A 10% share buyback that would highlight to the market just how ludicrous the share valuation is, considering the content of the 'R&D and UK operational update' RNS - 23.04.2021.
This displays a wealth of R&D expenditure, and I think might be the reason why some posters might overestimate the present war chest for the M&A activity we are lead to believe will take place between now and Mid 2021.
For me it's share buyback OR M&A activity.
I think a share buyback would be one way of using the cash pile mactrader . But a better use would be an acquisition that would future proof the company after covid . Build on oncology and other outside labs , ie local doctors / health centres testing .
Either that or diversify a link to countries who are in more need than we are and focus sales and support in different companies who are suffering more than us .
Unfortunately covid isn’t going away anytime soon and to grow sales in India/Brazil / USA might be a priority . The cash pile we have could be used for staff/premises business development in said countries whilst the pandemic is ongoing .
IMO the q3 LFT is the biggie , the one that basically says “ is your vaccine working , are you protected , your antibody levels are low . Get another vaccine !
That could be the big one in my opinion .
Harchris I agree, not too much as funds are needed for takeovers and investment. Tkr, they are doing lots. Possible company changing products soon to be released in the lft tests.
Something will have to transpire before the end of June,or the sp will be on its A**E, company needs to give constant sales/tenders by way of RNS,S,not Twitter Twatter,market pays no heed to it.
If the shares fall below £4 again a 10% share buyback would highlight to the market just how ludicrous the share valuation is. 'Yeah that's right, we just bought back 10% of the company with a fraction of our cash pile!'
I doubt it will happen but a share buyback would be a real sign of intent, but you've got to find the sweet spot. Buying back too many and the market questions why you aren't reinvesting that money in the company.
Buying back 5% of the shares (3.5m) for about £15m would see the share price skyrocket in my opinion.
To protect the share price they buy back their own shares when someone else is shorting. It would help protect against a hostile takeover and make it dangerous for anyone to attempt a short. I think anyone with a mountain of cash should buy back their own shares when their is an attack on their company.
word missing...
would protect company.
doh!
sorry no - not a big fan. struggling to see how they would company.
The lack of shares is sometimes a liquidity problem when I.i are buying in. But the ability to buy shares would be great to halt the attacks by the .cum shooters. I would welcome it as a n insurance policy.
Does anyone else consider a small share buyback would be good use of cash. I am thinking 5% to 10% buyback which they should be able to do without hurting the bank balance much. It will protect us a little bit from a hostile takeover