RE: RE:LG22 Dec 2020 19:45
Interesting optimist - with consideration of your comments regarding market cap. You're right squiring companies do drop on announcements of acquisitions and I've been pondering this one accordingly. I'm by no means an experienced investor but my understanding is that share price drops for the squiring company because the purchase is normally at a premium to the existing value of the acquired company, and secondly because of any detrimental impact on liquidity, capital, dilution if there's a find raise etc etc. In this case I believe only one of those is applicable as limited debt is being incurred for the purchase, debt is being written off as part of the exchange of shares, and therefore dilution becomes the only issue. Further to this, I believe it to be rare where the aquiring company manages to increase turnover so dramatically as part of the deal. I therefore personally think that once this share price will only go one way once the deal is announced. Happy to be corrected wherever applicable and thought I'd put my 2pence worth in for some constructive discussion. The most painful thing for me is the possibility of having to wait until June for them to be obliged to submit any accounting info for the last 6 months, as I believe that this would go some way to helping boost the share price and fear that share price may continue to languish until this is published. I am hopeful however for the future and look forward to seeing what's coming. I must say I'm also glad that I wasn't part of those buying at 18p and completely understand the huge frustrations of so many people. Shareholder communication is certainly not great. Hopefully this will improve too as they have more to report. Good luck all