The missing factor not being noted here is the total amount of the raise. These relatively small raises typically attract higher discounts because otherwise there's little incentive to take them over buying on the open market. Very large placings offer unique chances to own chunks of a company not usually practicable to acquire in any reasonable time frame (without the price being pushed up by the incremental purchases to reach the target equity sum). But this amount could have been acquired reasonably easily. So a steeper discount is required.
The fact that they only raised such a small amount is indicative of how close they feel they are to full funding. Note that with a backer like CEZ publicly sniffing, EMH could have raised substantially more and thus at a lower discount. But ultimately this was a small parcel of necessary cash to get across the finish line.
Those moaning about dilution from CEZ's eventual buy-in must realise that this was always inevitable with this and indeed any junior mining project taking on a large resource. How else did you expect them to fund the damn thing? As always, if you're going to use metaphors make sure you bear in mind that even if the pie is sliced into more slices, if it's a bigger pie, then your personal take changes proportionally.
Thus, full government investment (which is what this is) has several effects. First of all, it opens up a far bigger pie in terms of the project being approachable without multiple piecemeal funding agreements (see many other mines that did not get state backing around the world). And this partner opens doors (read: permits) which would be problematic in any territory given the sheer size of Cinovec, an aspect that investors continue to underestimate despite it being central to a national political debate (again: Cinovec is HUUUUUUUGE). Secondly, state involvement has a carry-forward effect of derisking further development of the mine. The lithium ain't going anywhere, and once the state is financially-tied to its success, watch the doors fly open. Thirdly, state involvement opens doors to top-tier offtakers like the big car manufacturers and battery plants. Fourthly, the added confidence that all this brings should send the shares soaring after the issue of equity for CEZ. When assessing the investment case, knowing all of the above is secure is a major, major boon. This is what powers equities like this forward.
No doubt many of you are selling/have sold to await the 'dilution' of the CEZ issue, but I'm not bothering and indeed have increased my position in the last few weeks. Because the announcement will come out of the blue, and the share price is already depressed. The market cap currently stands at approximately £28.6m, which is paltry by even the most conservative estimates of Cinovec's worth.
I also heard the name Ineos being bandied about (there were rumours about various majors visiting the site). I think it's very likely, but bear in mind the larger firms are very risk-averse still, and will want the current consortium to prove up the asset before they pay for it. This does mean they pay more, yes, but they have very different investment criteria to juniors. This is exactly the market gap that Reabold was created to exploit, so we shouldn't act surprised when we see it!
Also worth bearing in mind that any permissions granted for additional work will go to the new buyer who will need the same. So it's worth carrying on precisely as if the current consortium will drill the second well and beyond, since what they'll be selling is the entire concern.
There are many shapes any ultimate deal could take of course, but there's no sense in beaching themselves early and robbing themselves of the power to say 'no' to the wrong bid.
All this said, I am most certainly of the opinion that a bid is where this ends up.
iWant, you raise an interesting point but many of those numbers are pretty arbitrary. I saw the same article you did about international Spotify pricing, and I couldn't find any lower than 3 Euros, or $3.36, which is 68% above your stated $2. Worth remembering that this is a volume business, so the difference between $2 and $4 isn't $2, it's 100%.
On the other part of your calcs, the 1m subscriptions example is very low, even on a per-country basis - Brazil's population is c212m, Indonesia c270m, India 1.37 billion. Even a very small market penetration into each of those adds up to HUGE revenue, especially when you add in Japan whose use of Direct Carrier Billing is very high and whose Spotify subsciption prices are in the $7-8 range. Spotify reached 100m paying subscribers globally this Spring and this is continuing to grow rapidly.
The real pricing models at work here are likely to be more complex, with some take for the MNOs and possibly a discounting arrangement between Spotify and the MNO's - we can't know. But it's a huge name trusting Bango with their payment lifeblood, and the emerging markets you mention all have populations with increasing GDP per capita and disposable income. Combine that with the fact that Bango's existing business more than covers its costs and costs do not scale with new business, and you see why this is so potent and so profitable.
Indeed - the backend has been stress-tested into multiple billions of dollars worth of EUS without problems. They've also confirmed previously that upgrading it further is not expensive to do. It's built to scale.
That's the point here: Bango has passed its inflection point, so any new deals announced are straight to bottom-line. It's a crazy situation really and very, very exciting.
Same goes for any new business on the data insights part of the company. It's almost entirely profit now.
This is one of those companies that has been investing in itself and thus not showing a paper profit for a long time, but once it hits inflection and starts showing off what it's been building, releases blockbuster profit numbers. This exactly the model of the silicon valley firms that Ray Anderson is intimately familiar with. Ray is a long-view kind of CEO and we are now starting to see the fruits of what he's been gradually investing in all these years.
Most exciting time in Bango's history for sure.
Amazing news, and goes to show the kind of doors that Bango are now able to open. Market still seems yet to have clocked how big this is getting, given the PE ratio remains so modest.
Still posting vague negatives and avoiding the question, earache? Let's try again...
Do you still hold shares here, and if so why?
Shameless!
Earache, you are still avoiding the question. So once again. If you are so convinced EMH is a bad investment, do you continue to hold equity here, and if you do, what are your reasons for not following your own implications and selling out?
It's astonishing how you continually ignore this, disappear for a few days then post another screed of 'but what if' doomsaying. You're verbose and eloquent so I'm not inclined to suspect your motives, but I do think you need to explain yourself for all of the fear and doubt you spread here whilst claiming to be 'one of us'.
Come on. Time to come clean.
Back on the up. There remains significant institutional and board money in Bango, with very few shares publicly traded. There is a reason the BoD regularly buy more, and the II's don't sell.
Bango got battered by a huge headwind from the US that saw tech companies across global indices take a huge dive in late 2018/early 2019. It's a fool's errand to try to work out company-specific reasoning when a whole sector declines.
Bango is better positioned than most with no debt, huge tax writeoffs from prior year and a huge contracts pipeline. This is a nice simple investment case and now more than ever, given the market cap is so very modest for a tech stock with this kind of trajectory and a stable cost base.
Rathlin.
Worth remembering that some of that will be institutions (of which Reabold has a highly unusual number) adjusting their exposure and risk based on many factors outside of Reabold's actual company performance. They're complicated businesses and the way they manage their holdings is arcane to those outside their doors.
Really can't attribute conspiracy theories like 'being held down' when there are scarcely any trades and, if you guys haven't noticed, AIM is having an absolutely abominable week.
Top tip: Keep a separate watchlist of all the 'Traders ****s' shares that are traded to death. It's worth monitoring as it explains a lot of macro movements.
Additionally, as much a many AIM investors refuse to believe it, brokers wishing to act as Market Makers are extremely highly regulated and audited in this country, and can do permanent damage to their businesses if caught doing any funny business. They won't risk their business over one company. Anything beyond that implying foreign buyers somehow manipulating UK markets requires a proposed mechanism to be worthy of debate.
Sorry to bite your heads off but I see way too much of this. Just take solace that EMH is holding up well in a time when AIM is getting battered, and we have a poster called Earache on this very popular forum penning daily trashing columns about the share he supposedly holds.
Earache: If you think this company is such a terrible investment, why do you hold here?
Folks, as I said in my previous post, don't let him keep doing this without questioning his motives.
If you're going to spam this board with repetitive 'what if' doom and gloom, stop dodging the question. Will everyone please join me in harassing him till he answers.
Do you still hold, and if so, what are your reasons? He'll keep wriggling out of it. Don't let him.
... eh?
Just catching up on the weekend's posts. Earache seems to have an amazing ability to avoid answering the same basic question:
If you think this company and share are such a bad bet, why do you still hold?
If you continue to avoid that question and just pen long screeds that essentially amount to 'but what if it all goes wrong and the state takes everything' then I'm going to have to filter you which is a shame as you've made some handy contributions over the years. But your continued determination to be some hero of 'balance' whilst never explaining anything about why you hold the shares really undermines your every keystroke.
AIM shares like this are very illiquid and this is a very popular messageboard. Remember that a far greater number read here and don't post. You are fuelling negative sentiment and undoubtedly have caused some to sell. It's all well-and-good to say 'Well if they sell because of a forum post they shouldn't be investing anyway' but that's a moronic argument, because you don't get to tell people what are good or bad reasons, and regardless their selling affects us all. Creating a negative atmosphere and fuelling peoples' anxiety about their money makes people less confident to increase their positions and more likely to sell up. There are no two ways about it.
If you were posting some amazing huge revelation then fine - facts can speak for themselves. But you're posting literally just 'what ifs' skewed to the negative, there is no actual content. And claiming it's 'for balance'... who are you trying to create that 'balance' for? Are you trying to be the Batman of the forum, self-appointed arbiter of Truth and Justice?
I am going to repeatedly spam every post you make with the same question until you answer it. I'm sure you won't want to because it means, shock horror, saying something positive about this company. God forbid you should put positive observations into this 'ramping' (stupid term) environment for something in which you have apparently invested a proportion of your wealth.
So let's try again, once more, with feeling:
If you are so negative on EMH, what are your reasons for continuing to hold shares?
I hope others will help continue to hold him to account until he answers.
Yep I said just a few posts ago that we'll now see permits 'magically' appearing all over the place...
I think you really discourage other investors with statements like 'a few more years of waiting'. If I believed there was no upside in the share price for 'a few more years' I wouldn't sit here with my money doing nothing. The share price should gradually build as the pieces come together for the Cinovec project. Permit grants, funding firming up, better numbers, offtake/partner agreements etc, all should provide good catalysts long ahead of actual production.
Imagine if they revealed tomorrow a deal had been done with VW. You think the we'd be waiting years for share price appreciation?
I appreciate you probably didn't mean it in this way but do watch out for language like that and the effect it can have. All the best.
Fascinating timing. So the fast loans Reabold gave to Corallian are now converted into equity at below-market rate (stellar bit of opportunistic capital deployment from RBD's BoD!), and Corallian are still able to go to the city and raise funds at a premium to their last raise. One must as the inevitable question: What has Corallian said to those placees to get such funding? Must have been damn tantalising to get that kind of premium. They're private so they don't have to tell us what they told them, but I strongly suspect we're about to see big news from Colter South.
Doull, you are absolutely wrong on that one. 'All the risk money' isn't in any one place, if you look at the big AIM risers there is no clear standout sector right now. It's true that lithium isn't as en-vogue right now but that will change when funding is secured and big pieces of the puzzle start coming together. Everyone is seeing the same news stories about electric cars and domestic energy storage. These stocks are going to go absolutely bananas.
I was there too mrcautious, it felt like a fund that would allow investment in the sector as a whole, but perhaps was ahead of its time. Realistically when all the investee companies needed funding, the dilution effect was compounded a lot for KDNC shareholders. I still think that will come good eventually, but I'm not interested in the shares.
EMH is definitely the best of the AIM-listed lithium exposures in my eyes. Every time we look at numbers the big one that stands out to me is: 'Studies are based on only 9.3% of reported Indicated Mineral Resource'.
It's so ruddy big!!!
AIM is quite understandably cautious about lithium since KDNC, BCN and EMH have all had their disappointments. With KDNC it's been death by a thousand cuts; For the other 2 it was funding, BCN had the rug pulled with funding problems and EMH had Babis making the share price tumble and making it hard to get funding when the project seemed in doubt.
It has caused a lot of very-understandable and fair skepticism from the AIM community. Meanwhile the huge buzz around the West Newton oil find is sloshing a lot of capital in the direction of the companies involved there (including my capital). Ultimately AIM liquidity is relatively finite at any given time. But the funding issues are dissolving as the race to secure lithium supply hots up, just as we all saw it was going to when we started looking at these stocks a few years ago now, and the UK lithium juniors are looking undervalued again.
I have built up my holding slowly over time here and I've never felt better about being so exposed in EMH. I'm already in profit so I don't have any need to stick around to 'recover' anything, but I'm extremely happy with progress and won't be taking any profits down here. I think you'll see the return of AIM confidence once ink goes on paper with these mooted funding arrangements, for both BCN (where I do not hold any shares right now) and EMH. Funding is absolutely everything for these big mining plays.