RE: Email Draft to Chika26 Oct 2020 11:28
For those who want to join me ... (Part 1 of 2)
"Hi Chika,
Hope you’re well.
I have been a Bushveld investor for XX months/years and I am writing because, whilst I’m a big fan of everything the company is doing, I am keen to suggest ways to improve upon the communication and RNS communication strategy in order to close the gap between the company’s inherent value and its stock market valuation.
The main reason for the extent of this gap between the inherent and stock market valuations is due to the fact that the RNSs are (1) typically written in such a way that is hard for prospective new investors to easily understand; (2) they often include too much information per RNS; and (3) they are too irregular [and can be poorly timed].
Re point (1): I believe the reason why the RNSs sometimes only make sense to those who are already invested and also very familiar with the company is because they are viewed in a very literal way as being what needs to announced to the market for regulatory reasons. This is a very narrow-minded view that is doing the share price no favours. Whereas the companies that do well on AIM view RNSs as opportunities to promote the share to market participants who may not know anything about the company, and to convince them to research further and eventually invest. These companies also use RNSs to give bite-sized messages of positivity to keep investors updated and happy to continue staying invested despite everything else they may see going on in the market. It’s important that Bushveld adopt this change of mindset to future RNSs for stock market success. It should not take a forum of longterm investors deciphering the best bits of the RNS between themselves, because those sorts of places are already an echo chamber, where few potential new investors frequent.
Points (2) and (3) link in with the above and with each other. When RNSs include too much information, the best messages can drown in the thousands of words that are published at the same time, minimising the impact they would have had otherwise on the share price. To avoid this, there should be more frequent RNSs, with bite-sized chunks of positive info and progress, released at intervals across a period of time, rather than keeping quiet for weeks if not months on end, before a ‘mega RNS’ is suddenly dropped.
How to achieve this? I would suggest splitting up the RNS updates between Bushveld Minerals (incl Bushveld Vanadium), Bushveld Energy (which may even include the updates from Invinity and Enerox), and possibly a separate one for Bushveld Belco. This could still be followed up by the ‘mega RNSs’ summarising this altogether at quarterly intervals if required. But I feel splitting out the different component parts of Bushveld will help the market realise the current BMN valuation is far too low."
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