RE: 🔥 BLUE29 Jan 2025 16:30
Three reasons Mr Market is doubting the Leinster sale proceeds.
1. The sale hasn’t completed yet. A RNS said it had, but note 20 to the accounts said it was still conditional on a lot of things (not just GBML approval) outside the company’s control. How trustworthy are assurances that the deal will (future tense) complete? Could it all fall through at the eleventh hour?
2. The companies vending assets into CRML have done so for scrip locked in until the end of February. There is a false market in CRML shares until then – a few buyers, not many sellers. If everyone tries to monetise their sale shares at the earliest opportunity where will the price go?
3. There are significant amounts of warrants in CRML at $6 and $7 creating overhangs. Despite lots of hot air around its resources it hasn’t been anywhere near $10 since the autumn. Even if you believe the CRML $700M valuation (many don’t), what about the dilution?
It’s not just a straight up calculation of $xM proceeds guaranteed at some known future date, or x shares at $y in a very liquid, bankable counter. Hence the uncertainty, despite all the assertions from those here who haven’t done their homework that this is a company making deal.