RE: Dilution 1:131 Jul 2020 12:10
Cheapsharesboy, the market is forward looking.
1) a 50% dilution, theoretically for a market capitalisation to remain the same , twice the number of shares equates to a 50% drop in share price.
2) Forward looking, most of the 8billion or more will be burnt through at current rates by the time it becomes cash flow positive. Some of the 8b are debt with interest repayments, not assets.
That is just a start. I look at it purely as a stock/company and will not future guess as it is pure guesswork being utterly opaque(2 wave, more countries or vaccine). Another fund raising could be needed imo, all depends on many unknowns, just do a cash flow rough projection.
Most importantly do not fall in love with a stock/company. The market is always correct. If it falls from £3 to £2, a rough stop is advisable unless position is small. If you stop at £2.90 out on a long 10,000 , you can buy 13,200 shares, and if you get stopped out at 1.90 there, you cand pick youmuch more here at 1.64 increasing your holding by over 50% with the same cash.
If course there is a case for averaging down, do it where it counts, pivot/support etc but can be risky buying into a falling knife, ideally wheren it starts to turn, better vision. Maybe a better idea to leave 10% to 20% for the risk takers and buy more assured.
Good luck all as most are currently long and hurt by it.