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Given the serious prospect of being left holding 'unlisted shares' It would be useful to gather general views on what people see as the benefits / disbenefits of this
/discuss
The benefits to the management of the company are that they can save money on the legal requirements and obligations of a public listing, and devote their attention and other resources to building the business. They have said it will take $100 mill in funding and 5 years to get proof of concept system running. The disadvantage of an individual holding a few shares is that there is no obligation by the management to say how things are going, and no market for the individual to find a buyer at a fair price. A shareholder becomes a private investor in the company. Everyone makes their own decision, but maybe selling now creates value for an individual to harvest the loss and reduce a gain taken on another position that worked out.
Main risk of this share for me has always been dilution. Moreso in a private company as you dont have that obvious route to market to sell to bail out.
I dithered about buying here as it was open that the new funding was coming and that would dilute - but the assets /prospects wood me.
My main private company concern is I dont have an exit and in the meantime they can reduce my holding by having funding rounds to which I am not invited - but to be fair I was worried about this pre privatisation.
Personally I will sell but I am holding out to see if I can get a better price or something else happens - 150p and I would take it gladly at present - but others target is clearly lower and they are clearing off sub £1 out of impatience and uncertainty of any offer.
Thanks Nelson. As you say the trickiest part of this for me is the lack of an exit route. However, anyone prepared to buy stock at £1.50 despite knowing that £100M is needed just to get to 'proof of concept' must surely feel that there is huge potential here
I accept that capital may be tied up for a good while but what am I missing here?
RE "What am I missing here". Well, a question... where are they getting £100m from?
The company seems to have been constructed on a business plan of "fake it till you make it" and unfortunately they have not made it in time.
The 150p "possible" offer is just a weird charade, nobody will actually be getting that money. I could be wrong there but the fact you can buy as many as you want for under £1 tells you that. The market is not always spot on but I have never known it to be this wrong.
AndyH81 - "I could be wrong there but the fact you can buy as many as you want for under £1 tells you that."
It wouldn't be under £1 for long at the quantity required for 29.9% of the company. In fact the average would probably be much higher, due to the quantity of available shares.
Thanks Occam. I get the company benefits of not being listed but suspect that they will be more to do with corporate flexibility than reporting obligations. However you are right on this. I'm still interested in what everyone thinks about being essentially a small private investor in private companies.
In many ways it will still not be a small company if it needs $100M just to get to proof of concept. Anyone investing that much is going to want some certainty on future benefits and rewards. So does that suggest that my small parallel investment is still both secure and potentially profitable?
We've said before that private investors don't usually get a chance to get in at this stage - this is a start up so could fail completely, but it could also be the next Tesla/Apple/Insert other company here! I'm hopeful that the offer will actually happen, and I think it is just possible that the price might exceed the offer price as PI's take the last chance to buy in. News one way or the other will hopefully be forthcoming this week.