OBC31 Dec 2020 06:28
A bit of a flurry of negative sentiment yesterday late afternoon and evening. Almost like a small group had decided to take out a short position on OBC and attack it following the recent share price rise...
I came across OBC a few weeks ago as an opportunity and still hold a large position, despite the recent rise. Here’s why:
- Market cap is still very low at £5m
- 18% share in ADVFN alone is worth nearly £1m. ADVFN share price rose 43.5% yesterday.
- £400k cash following recent placing, enough for 3 years runoff at least
- No debt
- Freefaucet was only setup just over a year ago and is already revenue producing. Only small amounts at £50k so far, but user numbers and revenues are growing all the time, enhanced by increasing interest in crypto currencies. Users earn crypto coins for online activity, including bitcoin, so it’s only natural that user numbers (and OBC revenues) will grow exponentially as sentiment in cryptos increases. The beauty of this setup is that the ever growing revenues from this stream have 100% gross profit margin. Something that could turn into a very valuable asset.
- Development and ownership of several different cryptos and blockchain techs. Yes, they are early stage, but cryptos are increasingly being accepted as the future, so their values are very likely to increase further and any one of them could become much more mainstream, which would be a complete game-changer. This is the exciting component for me as they could provide huge value going forward. Bitcoin is now pushing $29k and is continuing north, which shows how strong sentiment in this sector is and the ongoing direction it’s going.
- BOD have considerable skin in the game with over 40% holding between them. They also keep the overheads incredibly low.
A few shorters seem to have jumped on the fact that the recent large placee has sold a small proportion of their holding. They’ve seen it as an opportunity to spread fear and try to drive the share price down. Anyone planning to hold over the coming weeks will need to prepare for the odd attack from a group who have clearly taken out a short position. Why else would they all suddenly start posting negative sentiment at the same time? It will present some good trading opportunities I’m sure (possibly starting with a small drop on opening tomorrow that will then quickly get bought up), but there will no doubt be a bit of noise surrounding it.
For me, despite the noise, this has lots of reasons to justify the current £5m market cap and easily enough to push it north of a £10-15m market cap. It looks like there might be a few bumps along the way though.
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