The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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Starbright your making one assumption that the pizza is always the same its not. Ive tried really hard to explain this but your looking at too simply. If the size changes does that not effect how much in weight or actual size you get to eat ? If I have an 8 inch pizza and its cut into 4, or I have a 12 inch size and its cut into 5, do I get more actual pizza for the 12-5 than the 8-4 ? The size of slice is the VALUE OF THE SHARE
StarBright is correct, I believe what he is saying is that the share price is derived from the market cap, and the market cap is the only real metric that matters for valuing a company. The market values the company based off what is deemed to be the sum of their projects, the shares price is derived from dividing the market cap by the number of shares in issue.
The number of shares has no bearing on the market cap, UFO could do a share consolidation tomorrow if it wanted of 10:1, the market cap would stay exactly where it was (unless an external factor impacted it), but the share price would be 10x higher and the shares in issue would be 10x lower.
The pizza analogy is a very good one.
jemchipsa, the secret to successful investing is to find undervalued companies.
Some of you need to watch the pizza video...
Value of company (Market cap) = size of pizza
Number of shares in issue = number of slices
Whether you cut the pizza in eight slices (like Jen) or twelve (as suggested by Brad) the size of the pizza remains the same. The value of the company is not affected by the size of the slices. The value of the company is the discounted value of the future cash flows investors expect it to generate. It varies not according to the number of shares (slices), but according to investor expectations for future cash flows. The number of shares can be varied (for example through a consolidation or stock-split, or even a dilutive placing) without impacting the value of the company. It’s not that hard people....
StarBright our current MCAP value is £39,000,000 - the amount of Shares out there are 3,423,000,000
MCAP divide by Amount of Shares = 1.14p roughly which is our MARKET current price
what these brokers are talking about are what they think the MCAP should be and if the market agreed we would be closer to the share price that gave that value but we AREN'T. So either there is too many shares effecting the real value or the market doesn't agree with the brokers valuation.
The promise of quick price rises hurts this share in the short term, it delays the actual recovery of the price. We are getting far too many sells at what most would consider at low prices for this share. Part of the problem is the impatience of buyers thinking this is going to move quick and its not, then they sell due to frustration. I actually thought we would be slighter higher about 1.2-1.3 by the end of February. Yet here we are stuck at 1.1-1.2 misery and its not going away. I cant see of what is known to be coming apart from a few events that will buck this if people don't have a more realistic view on how this progress. Hence Im changing my view on being more longer term to get close to 1.5 now. There is excessive ramping of the share to be honest on here, and Im not saying its not worth a buy because it is but at least give people a more realistic view of what they are getting into.
JAdam - how is the number of shares in issue used in calculating the market cap of a company?
Starbright it is maths, the value of the MCAP of the Company by the AMOUNT of SHARES = CORRECT SHARE PRICE
If your MCAP isnt strong enough to cope with Amount of Shares you get an Incorrect Share Price which most people agree this is true.
How can you estimate a MCAP on non-profit prospects ? You guess and everyone has different views but the market is saying we are at the correct price. So either the amount of shares hurts or the MCAP is too low for this amount of shares ?
Jemchippa
Nothing is killing this share.
Also very kind of you to feel so much empathy for short term traders. We are all long term holds here BTW. 2 years plus easy.
UFO = Winner imo
Mt starbright know more than anyone else he is retired and 40. You absolute muppet mr silverspoon
“The Downside Valuation is due to too many shares out there for what value exists...“
How does the number of shares have an impact on the valuation (Market Cap) of a company?
The silver squeeze move on 1st Feb proved that the share can move to 1.6p within a few hours.
The Downside Valuation is due to too many shares out there for what value exists - there is no income yet and thats the combination that is killing this share. I am a fan of this share but we dont want people to buy who think this is a quick turnaround, I dont see this share moving in March lets not pretend we aren't just going to float around this price until the selling at 1.1 stops. That will be the first sign there isnt too many shares floating around once the daily 1.1 sales stop or decrease.
*Downside Valuation is higher than our current Mkt Cap (means we are undervalued).
Lol. Personally I don't have any technical analysis experience at all and can't tell the difference between a Doji and a pregnant one! But one skill I do have is that I am very good at reading people when I see them in person or video.
I've watched all of Bill's videos and he has always been genuine. That's why I feel very comfortable with being fully invested in UFO. Last year we didn't have the nice slick website and twitter picture updates we have now. All I had to go by was Bill and his interviews, RNS's etc.
Thankfully now we have the detailed Turner Pope Research Note which states the Downside Valuation is lower than our current Mkt Cap.
https://mcusercontent.com/d9ebd7c1aa0f3dbc5fab42eca/files/fa71d1c4-9a35-43c4-a9e8-8f4c7724f786/AlienMetals_Outlook_25.02.2021.pdf
Alien Metals' projects worth up to double market cap, suggests broker
https://www.proactiveinvestors.co.uk/companies/news/942312/alien-metals--projects-worth-up-to-double-market-cap-suggests-broker-942312.html
Interesting approach to research, post on a LSE board, watch a 2 minute video and decide. He popped up asking teh same on GGP a few days ago Max, must be a world leading body language expert lol
Interesting reaction. To me he looks very different to the many slick AIM CEO's who have pumped their shares and pocketed the proceeds...
Cheers Max
That's an interesting take on it!
Good luck Darren!
Max - just watched that youtube video and I've got to say, I wouldn't invest in that guy / this company with a bargepole.
As someone who has been in and around these tiny companies for 20 years, he strikes fear into my soul! He looks just like all the other CEOs who pump up their shares, sell out and leave the PIs holding the bag.
Not one for me but good luck with it all the same.
Thanks Max for taking the time - very useful