Member Info for HarChris

‘Next week it may only be worth £60m’

And one month later it’s now only worth £53m…

It sure won’t take much from the BOD to see this double quickly at least.

Marc, I mean this in the nicest possible way.

If you’re investing for the long term do yourself a favour and learn the difference between share price and market cap - it’s a very basic thing to understand but essential… Blencowe are a tiny outfit share price-wise, the 3.5p vs our 4.5p means nothing, they have less than 200 million shares in issue.

Compare us with Far or Afritin, but not some tiddler valued at a few million.

Oops, here’s the link: https://twitter.com/jasongoepfert/status/1573656248842698757?s=46&t=SAURVDTYrk1c8bFG2Tum2g

Own up Chaebol, how much of this $18B is yours?

The big risk currently is with the miners, not Bitcoin itself. Despite all that you’ve just said there is an energy crisis looming this winter in Europe, fuelled by the use of natural gas by Putin as a weapon of war… you then have the looming housing crisis as you allude to, something that is currently considerably worse in the US than in the UK.

There are enough mounting pressures to doubt Bitcoin recovering before 2024. Of course we’re too far away from that to say it with any conviction but historically many factors have come together for Bitcoin to rally (and when it does it really rallies) and it’s hard imagine that’s likely to happen this time until around the time of the next halving.

So you then have to ask yourself, is the miner I’m invested in capable of making it through to 2024 with a Bitcoin price ranging between $15k and $25k? If it is then great, you shouldn’t have a problem, in time it will very likely come good and multibag from today’s share price. But if it’s not then it’s probably seriously worth considering selling up and playing it safe at this point in time.

Personally I’m stepping up my research now to understand where the recent ATM placings leave the likes of Corz, Hut8 etc and will start taking a few positions at any further weakness

(despite all the red flags for me currently I’m leaning towards Chaebol’s pick, that Mara is the bet to go with… money talks in this space and they are best positioned to ride out this storm if it turns into a miner killing tsunami).

There’s a number of factors going on here . Rather than DA being simply out of his depth and completely clueless I subscribe to the DRB theory that he’s doing things on his terms… because, well, because he can, because he knows the cash is there and he won’t be turning to the market for funding at any point in the next year or so and so along as he gets the execution right the share price will recover in a moment’s notice.

However the market won’t see it that way. Silence alone does not cause uncertainty but the numbers to date, the dramatic fall in revenue, the double revenue guidance downgrade, these are not auspicious. You then get doubt quickly creeping in… is DA competent? Does he know what he’s doing? Does the silence suggest he’s literally sitting on his backside twiddling his thumbs wondering what on earth to do and what direction to take?

Now suddenly the dispute becomes a bigger issue. If DA doesn’t know what he’s doing can we really trust that novacyt really do have strong grounds to assert their contractual rights? Suddenly what seemed like an obvious position of strength (should at least settle but likely receive some compensation too) becomes a major drag on the share price with potential insolvency being priced in.

And finally the wider economy is in an absolute state. Is it likely to affect novacyt? With no debt, oodles of cash and a fairly recession proof sector, no, it isn’t likely to hurt novacyt. It may even be to their advantage but given the above points is that how the market is going to see it? No it’s an added risk to compound the uncertainty already piling on this investment.

So yes if DRB and myself end up being right then all will come good in time, on David’s terms and by his timeline.

For that reason next Thursday is very important. He’s been in the post a while now, for our theory to hold true there would need to be signs soon that DA knows what he’s doing, that there really is a plan being hatched and executed behind the scenes.

Poor results and an empty presentation and doubts will certainly be ramped up my end.

There’s no mitigations or restrictions in place whatsoever and a laissez faire attitude to covid in general which heightens the risks to the nhs dramatically.

In terms of novacyt we know they aren’t going to be pulling in hundreds of millions like in 2020 and 2021 but we will likely see a boost to revenues, especially in sales to hospitals overseas and unicef etc which might catch the attention of investors on the sidelines.

The point being though Steve that if between now and Nov23 we sell more than we produce then the average price of V needed to in order to be able to pay Orion in full drops considerably.

It’s not a given though, obviously. But another factor to be aware of…

Apologies that should say we would then need to generate just $9m*** free cash between Jan and end of Nov…

Even better.

That’s not true Steve, more than anything we just need to drive sales hard next year… selling 2/3rd of the extra inventory at $40/kg gives us $22m extra cash. We will end the year at about $11m so we would then need to generate just $11m free cash between Jan and late November to cover the Orion payment in full (will be $46m total - $4m already paid).

With costs expected to be $30/kgV next year (factoring in weaker rand) we need no where near $15/kg net as long as Fortune is able to increase sales.

Using Arc’a figures 17 Ramd through 2023 would bring costs down by ~$2/kgV to $29.9/kgV, obviously even higher rand like we’re seeing brings them down further.

Also worth noting… we own 74% of Vametco but 100% of Vanchem. This year’s production of 4000mtV comes in at 3300mtV once that is factored in however next year’s 5200mtV (middle of range) is split between the two plants, giving a total of ~4500mtV, an even bigger increase of nearly 40%.

To be honest I understood that things might play out this way, that DA may well take his time and take a prudent more cautious approach to building out the company.

What I didn’t expect however is the extent to which the market would punish novacyt for this approach. Yes wider markets are in dire straits and that certainly has added to the downward pressure but in my head I thought if DA decided to execute his strategy in his own time, if he was to manage without shareholders in mind, then we’d be stuck miserably around the cash level / a little higher.

But no I didn’t ever expect under these circumstances for the share price to be this utterly annihilated.

Thank you for the kind words Crl, I completely understand the sentiment however. It’s very hard to seem like you know what you’re talking about when the share price is tanking, in this instance all the permabears will appear to know what they are talking about - things do turn though and those same people will continue shouting down stocks all the while they continue to rise day after day, week after week, month after month.

I’m confident things will turn around here, I think the odds are very much with us but I couldn’t for the life of me say when. There’s just too much uncertainty out there, the world economy is looking extremely fragile, there are crises like to unfold all over the place.

But what we can say is that a pound is worth a pound, whatever else is happening. Unless there are signs that novacyt are going to squander the cash pile away, unless we start seeing big investment with little to no returns to show for it, in time at the very least the market cap will recover, first to the cash figure and then onwards once investment turns into revenue and profits.

So yeah I think in time the share price will be well above where it is today but there’s an awful lot of work to be done if the long term holders, especially the ones that have held on all the way down from the £10+ level, are ever to claw back their money and see a profit.

Oh and as for the investor meeting, I personally expect substance this time. DA isn’t stupid, for all his mistakes so far he won’t be ignorant enough to set up an investor meeting just for the sake of it. There is no point, he isn’t a masochist, he won’t want even more flak. If he had nothing to say he could completely hide from us and there would be nothing we could do about it… but he’s not, he’s called this on, I’m fairly optimistic this time around.

Let’s not forget that almost every other small cap is tanking currently too, nothing has actually occurred in the past month to see such a dramatic further fall, it’s universal across the small caps.

At last count novacyt’s net assets were valued at £142’. If they were to lose the dispute, in say the next six months, once things had settled (I.e corp tax and vat rebate) our net assets will be valued at around £85m (that’s if the rest of the LTIP is paid out in that scenario) and if we win the dispute in full our net assets should be valued at say £205m.

Certainly could be argued, in the long run, that losing the dispute in full is priced in now and some.

Interestingly Corz hit new 52 week lows today, as did CLSK I believe. Arbk very close to new lows although arb still a good 10% off (is that to do with the strong dollar???).

Mara, Riot, Hut8 well above their own 52 week lows.

And in no way am I a company apologist, I have nothing good to say about them currently.

I do think however that £99m and no debt is a truly amazing position to be in and even the worst management given time should be capable of doing something with that.

That’s a bit unfair Johnny, my views haven’t changed and I continue to say that on AIM sentiment matters far more than fundamentals and as so there is no way of knowing just how low this might go. I’ll happily admit that. However given that there is so much cash at their disposal there is reason to believe that the mgmt will be able to start pumping out news when they’ve got their act together.

Im neither right nor wrong, it’s far too early to conclude where the novacyt story ends. As I’ve said numerous times there is an almighty opportunity here if the management are capable enough to take advantage of it - the jury is still out but the share price is an exaggeration of the actual reality at the moment.

Sure in time they might prove to be utterly incapable and the low share price will be justified, for now it’s not.

And it’s more than fair enough to put up a defence when there’s so much negativity on here.

2021 is irrelevant, as is 2020 (where we made a huge profit), 2022 is more relevant and it’s not looking wonderful. 2023 will be where we get to see what a new streamlines business with cash to invest is looking like, wi though covid revenue to rely on. We do not know what sort of outfit novacyt will be then, those of us heavily invested hope that management are successful in turning this ship around.

Novacyt have £99m in the bank at last count, that is about the figure a billion pound company would be able to raise, it’s beyond the wildest imaginations of any company even twice, three times our current mcap.

I do not accept that this is all over.

Unlike you I hold in the hope that things can change, which they obviously can. A slow start to one’s tenure (business-wise, not share-price wise) does not equal certain failure.

Novacyt we’re certainly a loss making company prior to covid, it’s too soon to know if they will return to being loss making going forward.

With such high margins on their products I would imagine they’ll be back making profit again soon

Whilst its hard to look at this as anything but deeply depressing and frustrating there is reason to believe that this is simply AIM taking advantage of a continual news blackout - and whilst it’s mighty frustrating, DA and the management know that in reality they are not running out of time, things do not need to turn around immediately for the company to stay in business, time can be taken over acquisitions and in terms of next strategic moves.

We are still very well placed to prudently build an internationally competitive diagnostics business, important to remember that as the share price dwindles lower and lower.

It’s too soon to write DA off just yet despite the inauspicious start… I’ll start worrying if the cash drops significantly and there’s nothing to show for it,