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I haven't watched the prezzie yet - thanks for your replies. Thanks Blue
Nova should start a chain of testing centres in all major airports - Gold Standard Testing - it would give them very high profile and would cement the brand name globally. They have the cash to do it and the kit to turn around very high quality pre and post flight tests to pathology lab standards.
And it would make money too.
Thanks Blue
Suitable PE.
Well thats literally the £54 question isnt it? So the market looked at NOVA - to the moon valuation, then retracted as it became clear to everyone it was a one hit wonder, then fell heavily as the market was informed that even the DHSC didnt want the product (or in fact utilise it correctly) so PE went 20 down to 5 down to 2.
Now as testing becomes systemic, especially for travel, Delta is pandemic, and the one off opportunity looks like a 2 or 3 off, the PE is rising again as future earnings become more likely.
Ages ago, and i cant be bothered to find the thread, i said that if testing for travel becomes mandatory and NOVA can grab a decent part of this market, then the valuation would be £50-£75 a share at 20x earnings longer term, not next month or anything, and if they have reasonable % of US business, then a NASDAQ listing would take them there.
But yes thats a long way from here - but not fantasy.
70m shares at £70 a share is £4.9 billion - at 20x PE needs £245m of earnings to produce .
Thats the target, as long as top line revenue and bottom line earnings keep on going at say +25% each year then we are in the right share. Thanks Blue
I thought my first message got lost. OK twice the advice!
Hydro - ring your order in to a broker - they will place the order with their dealer - he/she will ring the MM and work the order for you at the price and size you want - its how it works in the market for larger orders - anyway they will appreciate something to do and talk about in the middle of August - i used to work as a dealer - they are probably drinking coffee and doing the crossword right now - keeps them employed vs the algos. Thanks Blue
Hydro - phone your bid in to a broker - instead of autotrading - give them a price and ask them to work the order - which means they will call across the room to a dealer - he / she will ring the market and speak with the MM and they will either get the trade done face to face or they will work the order for you and get it done. I was a dealer for a brokers - its how it works for larger orders - anyway gives them something to do vs the algos in the middle of August. They will appreciate it. Thanks Blue
DL is already on Twitter trying to raise interest in his new Hydrogen venture - jeeeez. Pump n Dump anyone ??
All shareholders will lose all their money - including me - the bonds will reclaim whatever they can as they now own the assets and the assets are in administration to protect from creditors.
Shareholders rank last in the list so we wont receive anything, not a chance.
Even if the company relists again it will be with a fresh capital table and different equity, so write it off.
Everyone said David Lenigas was dodgy but i though he was running a decent strategy - its only the corporate finance team that really know the picture.
£5k i will never see again.
Thanks Blue
I will add to my comment earlier - you will know when this is over because in very thin markets like these its easy to organise a bear raid. So take the NOVA price down to say 250p or even 200p - then buy whatever falls out of the market as a result, then the shareprice will rise again. If i was a trader i would do this at the then end of Aug or start of September, ready for some price moves Oct to Dec. So its just a guess from me - but dont be surprised to see a Bair Raid and then grab some shares at that point. Thanks Blue
Share price eroded daily.
I will give you one very good answer - its the summer - and most of the City is away on holiday. Market Makers get their risk positions (books) reduced by Risk Managers and especially true in illiquid AIM stocks. So the market is probably inefficient right now. If i want to sell say 25k shares in NOVA and the MM are running flat books then the trade goes into the market for a buyer - and if one doesn't jump up and take the offer then the market goes fishing - how - by lowering the price until a buyer is found - probably the people here on this forum saying that sub £3 is a bargain. Well it probably is IMO - but the MM dont care about the value of a business, its irrelevant - they match buyers and sellers - and given the direction of the market over the past 3 months any and all MM will be running a shortish book - so the fall in prices gives them a bit more book profit - so they really dont worry about the price drifting lower. Wait until mid September when decisions / trades are made again. Thanks Blue
I think its a bit more than £7.20 - more like £7.70 last time i asked. Also the Q16 machines are - i think about £250k for a machine and 6 months worth of tests - or they were 12 months back - i guess they can have moved on = down on pricing for the POC analyser machines. The NHS got the lowest price point - private contractors a slightly higher one.
If i was running a testing set up in Heathrow i would match the machines to demand - so probably a mix of the smaller Q16 models running 14 tests every 25 minutes and one larger lab type machine doing sets of 32 > 96 at a time.
As for the valuation - using very rounded numbers - if we say £100m in cash and a business with £50m PTP then a PE of 10x should give a £600m valuation which is around £9 a share i believe.
So buying at £3 is value investing.
Thanks Blue
Looks like buying ahead of update.
It COULD be that Novacyt is booking meetings with institutions after next announcement - the brokers are on the phone arranging a video update once results are released. MM hear of this and off we go. Institutions ask how's it going ?? and the brokers say, "we cant be specific about details, but we still support the business case (wink)"
Thats how it works. Market buys into the update a bit and suddenly the market is short and prices start to rise.
FOMO = Nervous Site
Premiums at TO are usually around 30 40% - not 300% - that would be a massive premium - and therefore is very unlikely.
Thanks Blue
One note to add. If you do want to deal in size or try your luck on price then ring your broker and ask for a dealer to speak to the market for you - its literally their job to talk to the market on the phone and wither get a price in size - say 25,000 shares or simply haggle a bit - i can offer xx instead of yy . Dealers know the MM quite well, drink beers after work with them and if the market is not fast they generally will improve on your standard algo prices - plus human MM can make their own decisions - whereas Algo trades are simply 3 or 4 what if statements running on a server. Thanks Blue
Hill Seeker - its an AIM stock and post 2 x trading updates and pre annual profit announcement so i would imagine risk managers at the MM are basically setting the volume knob to 1 and waiting for the risk to clear - a stock with this volatility over the last 12 months is going to have red flags all over it and the risk team wont let the MM take much of a position either way.
Thanks Blue
Bill the placing is handled by the brokers - they dont want to eff about with Private Investors - its time consuming and has compliance issues. PIs dont count at all in the city - you / we are just fodder. Dont average down now - youwill be killed by an upcoming capital restructure an lose twice over. Thanks Blue
The alternative is Debt. There are quite a few specialist funds that loan to technology businesses, BUT, they take lien over the IP. If you miss your payments then they take the IP out of the business and leave behind the winding up mess to the Board. Its clever because that can cost quite a lot to do. Its then a high stakes game when you start to borrow against the family silver. Thanks Blue
Whoever the next Mint Capital is will not give the old Mint a free ride - they will definitely knock out Mint's shares using a capital restructure and that will affect all current ordinary shareholders - you, me, us. The rot has not stopped - its just starting - believe me - its the playbook for any professional investor coming in with new money. Thanks Blue
I bought £5k of these as a long term gamble at 8p- buy - ignore - then in 5 years maybe its worth a lot or zero. Its gone to zero pretty fast but that was always a risk. The capital table is wrecked, the business cant recover from this - yes it can attract new capital on strong results but that will require a raise and a capital restructure. If i was in the next raise i would consolidate at say 100:1 making the shareprice £1.00 and then kill off the current shareholders with a 5:1 new round of equity making us bagholders 1p shares today worth about 0.2p after. Thats the way it works - i would really not top up into this price fall. Thanks BLue
No its like this.
The underwriters get paid a fee to underwrite the placing - they then place the new shares with their clients - if the placing is oversubscribed they can come back for more shares but these are not underwritten they are just new bonus shares - the underwriters dont care if the share price goes up in the future - their job is to wholesale big blocks of shares out to the market and not get caught with any shares left on their books at the end of the sales process as they then have to own them as they are underwritten.
If the company is strong then underwriting is money for old rope - well new rope in fact - but its an easy fee.
Dont assume that brokers, MM, corporate finance banks care if the SP rises or not, they really dont, they care about their bonuses / commissions, their spread, their fees and their clients in that order and in fact private investors nobody cares about at all unless you can help with the previous list in a significant way.
I worked in investment banking - its the truth.
RB