The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Just a brief Fact Check since my user name was included in the post from asimpleinvestor.
At no point did I state that we were on for a 550% rise! I did however, call out some individuals on twitter and other boards for making baseless claims of this nature.
I have also previously stated that a period of consolidation was no bad thing given the recent rapid increase in SP.
Thanks to the magic of LSE, all of this is available to read back and confirm if you click on my username.
Looks like a bit of the initial excitement over last weeks rise has quickly worn off!
As I mentioned briefly last week, these occasional lulls in movement do at least allow for some consolidation before the next rise. There is plenty of "potential news" on the radar. We just need to see what's its worth (in terms of order value).
Correcting a typo (although 550% would be lovely!)
"As I mentioned earlier. Its all to be taken with a sizable pinch of salt. I saw a post earlier suggesting a MCAP of £40m (That would require an increase of circa 250% from todays price!!!)"
Hey. Search #LST in Twitter. There is also a bit of chatter on ADVFN (I am not a member there so can only see limited content).
As I mentioned earlier. Its all to be taken with a sizable pinch of salt. I saw a post earlier suggesting a MCAP of £40m (That would require an increase of circa 550% from todays price!!!)
No idea what it is (potentially the MM's filling large buy/sell orders) but its really put the breaks on this afternoon. At one point it looked like we were heading for 3p.
Not to worry. Lets see what next week has in store. Lots of noise on various chat boards and twitter about the SP heading for 6p plus in the next week or so. I know most of it is ramping rubbish but its nice to dream a little :)
Its nice to see a bit of volume changing hands at these levels. It helps build a decent base for the next rise.
That said there is a huge amount of shares held by II's and retail investors who bought way above the current level so we have quite a way to go.
My view is that the SP was suppressed significantly by the last fundraise (understandably), however, the initial drop was pretty aggressive and unnerved potential new investors who on SP movement alone had no reason to get involved with LST (hence the low MCAP vs order value and a period of months with little to no movement).
There is still some uncertainty around how much of the tendered business will convert and drive the SP northward by multiple pence and this remains a complete unknown until an RNS lands. I suppose you could in theory buy on the basis that X% of the tendered business will land in the meantime?
What we are seeing right now is a load of short term investors chucking in the beer money on the rise and then claiming to be warren buffet (including the ones try to cross post about other "opportunities").
For now: the business is relatively well funded, there is news to come regarding orders and the SP sits below market value if looking at the order book vs MCAP.
Based on the disparity between the MCAP, order book and margins, the SP could be multiples of the current price and still present decent long term value. Hopefully the news will spread today and new buyers will take the opportunity to buy at a heavily discounted level.
I am surprised to see the trading so modest this week. After a rough year or two the business is in decent shape with a solid order book, directors bought in and II's locking in decent volume. I genuinely don't see why this couldn't be 4p today and still represent a good value long termer.
The penny has to drop at some point!
There seems to have been a flurry of activity online this morning with a few target prices banded about (most north of 3p).
Its nice to see a bit of confidence after a tough few weeks. Still a long way to go for long term holders but it looks like we have turned a corner and could see further sharp rises (only 6 months ago the SP was over 6p).
It looks like the penny has finally dropped and new investors have spotted the disparity in MCAP and true value.
In reality the SP could be 3p+ and still represent good value for buyers.
The drop on the announcement of the fundraise was massively overdone and has essentially just made it easy for II's to pick up volume on the cheap before allowing the SP to rise back up.
The investors who have been here for 2 or more years know the score here. VELA needs time, as nothing happens quickly and we certainly don't bank on an RNS meaning a deal is done or money is in the bank.
For the new investors caught up in the twitter ramping, don't throw the kitchen sink in on this rise as it will level off and like many long time investors here you might need to sit on your shares for a good while.
Good old leaky AIM market.
Its good news for holders (good to see something is actually happening), however, I will celebrate once AZD1656 is sold as we have seen far too many dangling carrots in the last 24 months that turned out to be a non-starter.