RE: Update19 Feb 2024 13:35
Thanks, Mad.
Financial Journalist
While the drawbacks of CBs are widely acknowledged, it's important to assess the potential risks from all angles to understand the full spectrum of outcomes I have attempted to do several times. The real concern arises when CB holders opt to convert and dump, particularly in scenarios devoid of significant liquidity events, such as the anticipated Croda/Sederma launch. In such cases, the likelihood of an adverse outcome increases. However, for the intrepid or stubborn among us, who are willing to embrace some level of uncertainty with an optimistic outlook on the future, the only real worry is uncovering yet another basement beneath what was thought to be the bottom.
Such are the nerves; even a paltry £50k worse SBTX conversion has spooked investors, and that's without notification of them being sold. The thought has been enough.
It would be reassuring to know that CB holders believe in the potential that Croda/Sederma might unlock and are prepared to hold off on selling shares until after the commercial news from Croda becomes public. Without such assurance, it's entirely reasonable for investors to delve into the history of previous CB transactions with other companies, even though one could argue that SBTX is better positioned.
However, the timing of the CBs raises more significant concerns, suggesting that the SA/Board might be bracing for potential Croda delays stretching into 2025. I do not agree this to be the case. Yet, there are rational investors who understand that Croda might be keeping SA minimally informed, as is practical, leading SA to ensure SBTX's independence regardless of Croda's timeline. If Croda does launch in 2024, it would be an unexpected bonus. There's a possibility that SBTX might allocate the proceeds from these bonds to retire the CBs ahead of schedule, accepting any associated penalties if it means lessening shareholder dilution.
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