RE: Is Volatility Risk?26 Apr 2024 11:34
Hi Callum,
I am also a long-term investor, but sadly not as young as you. Yes, you're right, the fundamentals of the business are the most important thing. That said though, market movements can start to impact the fundamentals of the business. If your share price is low, you're in a weaker position when you negotiate with potential partners. You may also slow down your work schedule if the only way you can raise cash to pay for your development work is via a highly dilutive fundraise. (If the share price was high, your fundraise needn't be so dilutive.)
And that's the frustrating thing about where we are now. The management can talk about a 'strategic review' but I don't see how they can raise enough money to conduct phase 3 when the market cap is £15 million. Yes, they could sell the whole company but I fear that will be at a price that doesn't fairly reflect what we've got here.
Finally, don't give up on pharma - especially the big boys like GSK and Astra. They're very different beasts from the likes of Destiny and far less risky.