Sapan Gai, CCO at Sovereign Metals, discusses their superior graphite test results. Watch the video here.
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Or you could argue that it is in his best interests to say that given that he knows how many people and past investors have lost money in MODE and he needs to try and keep them onside.
He's never going to come out with negative or low expectations is he when there is money on the line for him and his city mates.
Still pointless to speculate, imo as there is little to nothing to go on, so anyone's guess is as good as the next one's at this stage.
I will be happy with any gain from here given I wrote this off long time ago, so anything above the suspension price will be a bonus
gla
JR does seem very confident of vocal that mode/r8 will improve and there is no reason for him to post this kind of stuff unless true / he believes it will happen. Giving he is the main share holder in both company's that's a good sign in my book....
Its a straight swap so mode take a 2.5mil cut off the 50mil valuation at listing of Redwood bank. Redwood bank is off books valued at varying prices where you look, say 300million is what happens on listing of redwood (possible). Would be a 6x gain on mode/shares in it so im right in saying its good that redwood is listing at 50million as no one has valued it that low so it should create the instant rise . maybe why JR reposted this tweet.....
https://twitter.com/moneyroots1234/status/1693736946617500041?t=7IRi0w5zy8UjnfWm7yjBVw&s=19
Crober33 agree if they mentioned crypto today it would explode but the latest hype may be over by June.
This issue if Redwoods valuation goes up is they may ask for more equity which would mean we end up with even less. Increased valuations before the merger do us no favours.
Last year - and they have grown since
In this, Lynton Green (Deputy Chief Executive & Director of Corporate Services) stated that Redwood Bank is now valued at £120 million.
They just have to mention crypto and looking into it for it to explode imho
With bitcoin rising like it is this could be something special,I think there be a lot of positivity and interest here and could open up at any price been a long wait but could be worth the waiting
Crober33, I don't see how it is possible.
To give Redwood £50m worth of shares they need to issue them, lets say they issue them at todays market price (no premium or discount scenario).
If they wanted to give the R8 shareholders a bigger share, lets say double then the Redwood purchase would no longer be £50m it would be £25m.
***en39, valuation seems in line with what i'd expect shares may peak at 4 or 5p but then may drop once the dust settles
Hoping for more than 4%
I hope you're right it feels like it would be a simple exercise based on that and we just own c.4+% of the new 'merged' business.
£100m would be realistic if they have a growth narrative of 'crypto'.
GLA
***en39, if they raised £50m it would be to purchase redwood shares and the redwood share holders would get the money.
the rns is clear that it is going to be a equity swap. all raising £50m would do would mean they had £50m in the bank account with nothing to do spend it on.
they have no need to raise money for what they have proposed.
if they do an equity swap the value of the new company will have an increased turnover, profit and balance sheet so would never be worth £2m. what it would be worth is the million dollar question, personally i think it may peak at £100m and then drop to about £25m.
if it listed on a day like today where there is a lot of crypto hype and they could make use of the licence then a lot of people will invest blindly like they did with mode at ipo so could see a a much higher market cap. the hype may be over again by june though and nothing suggests they can or will make use of the licence.
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Redwood bolsters executive team ahead of proposed RTO
07 December 2023
Source: Redwood
A banking leader with more than 30 years’ experience has joined Redwood Bank at an exciting time in its short history.
John Eastgate, who has previously worked in C-suite roles with OSB Group and Shawbrook Bank, is the new Chief Commercial Officer at Redwood Bank, which recently announced a proposed reverse takeover.
Edinburgh-born John is looking forward to contributing to Redwood’s story and believes the Bank has strong foundations to build on.
“Redwood’s size was one of the factors that attracted me to the bank. I wanted a role where I could be an influence, not be lost in a huge business. Redwood has created a core of belief in its people, and it’s important you don’t lose that core - you grow with it, and I’m keen to support that.
“The proposed RTO is a huge opportunity for Redwood and will provide a platform to grow in the years ahead. I’m excited by what I can bring to that.”
Gary Wilkinson, Co-Founder and CEO of Redwood Bank, said: “John has joined us at a very important time and we are delighted to welcome him to the team. He is a strong leader and his experience will be invaluable as we enter the next exciting stage of the journey.”
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Somebody has to put the £50m into the company to create the new shares at a positive value.
If no extra cash comes in then the £2m company is still only worth £2m no matter how many shares are issued.
R8 have to raise £50m for the RTO, its still not clear how they are doing this.
***en39. they issue more shares and swap it for the shares in redwood bank, absolutely zero funding is required.
in simple terms they are likely to issue another £50m worth of shares to make £53m business, redwood shareholders then become the majority shareholders and we become the minority. we can hope that they do something to make the deal sweeter for the existing r8 shareholders but the likelihood is they look after the majority and if something is done it will be pretty minor.
then in terms of share price the market will decide if the market cap of £53m is high or low. people are speculating multi bagger scenarios but for it to end up in a multi bagger scenario the market cap needs to move.
i see the deal as a quicker cheaper vehicle to get redwood to market without the volatility of going through an ipo. why are they doing it? a majority shareholders of r8 are also the majority shareholders of redwood, maybe they want to offload shares once on the market which they can't do currently or maybe they see a longer term opportunity or need funding through new shares at a later date.
if they utilise the crypto licence this may add some value but no one knows if this is possible or what value it would add.
Surely they will update us on whats going on and the terms of the RTO prior to June? / completion ? has to be well on the way now ¬!
Thanks I had forgotten that they had stated that it's shares not debt.
But how do the new shares come into existence to generate £50m the funding must come from either existing shareholders (us) or new shareholders which is more likely.
***en39 the rns says exactly where the money is or isn't coming from "Â the consideration will be satisfied entirely by the issue of new r8 shares". based on this no money changes hands, redwood bank share holders will become the majority shareholders in r8.
Nobody can say that as we don't know where the £50m is coming from for the RTO.
New institutional shareholders (on what terms)
Retail Shareholder H fund raise (probably too small to move the dial)
Debt (on what terms)
Another method
We just have to wait and see but I am hoping for something that doesn't dilute us into insignificance.
GLA
@***en39 so what do you think will be the opening price when relisted with what we know?
Everybody is taking on maximum risk with this so would like a significant return on the risk taken when buying at 2-4p.
Lets see if the Crypto narrative plays out, the UK are still very far behind other parts of the world (no ETF's, no relaxed tax rules, no airdrops, no staking, no on/off ramps, no green lights for any CEX's or DEX's)........ They have a long way to go and its not really on the UK agenda.
GLA
Would be happy enough at 8p and think will get to that soon either at relisting or shortly after if not higher, redwood do seem to be processing nicely
What would be the minimum you would all be happy with?
2p
4p
8p
10p?
or need more?
Think most see value added with the crypto license and with the directors seeing a future in it
Interesting comparison using very crude numbers Redwood has about 5% of the Tesco Bank Assets (£570m vs £9.9bn) & Deposits (£4870m vs £8.5bn).
Tesco just sold for £600m which would crudely put Redwood at £30m.......
In reality banks are more complex than this but £50m RTO feels like top £ for whoever is selling out of that side.
GLA