The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
You would like to think they will notify us once they have exercised the option, its not as if its 10-20k, we are talking millions so they absolutely should let us know. The vwap must be down $5 by now, or maybe one more day.
They will need to generate some cash from somewhere shortly as the cash balance only had to the end of October or so.
Not £49k. That was the original investment but sold half on IPO for a tiny profit.:
· On 20 January Vela subscribed £49,000 for 700,000 shares in Ethernity Networks Limited, half of which it sold almost immediately at a profit of £600.
Found this online, hopefully shed some light on things for everyone:
Here is an example of how to calculate the Volume Weighted Average Price (VWAP) of security:
Suppose a security traded 100 shares for $50, 200 shares at $60, and 150 shares for $70 over a specified period. Thus, to calculate the VWAP, we first need to calculate the sum of the products of price and volume for each trade:
$50 x 100 = $5,000
$60 x 200 = $12,000
$70 x 150 = $10,500
Next, we add up these values to get the total dollar value of all trades:
$5,000 + $12,000 + $10,500 = $27,500
Finally, we divide the total dollar value by the total volume of shares traded:
$27,500 / 450 = $61.11
So the VWAP of the security over the specified time is $61.11. This indicates that, on average, each share of the security traded at $61.11 during that period. It takes into account both the price and volume of trades.
Joe take a break, your constant negative recently is boring.
Musk15 - we don't know that the vwap is at $5 yet, it's not as simple as taking the last 10 trading days closing price and getting taking average, it's to do with the volumes as well. Admittedly i do not know how its worked out but it may be a case of the vwap still being over $5 so could be the reason the option hasn't been exercised yet.
I agree Jimmy, its not huge dilution but $4.8m (although depending on SP the actual $ dilution will be less if the SP is under $5) shares is still a chunky amount but on the flip side the exercising of option would show we have shares at $5 so should boost sentiment?! Although this didn't happen when CIZ exercised their option at $10 to be fair.
Yeah lets look positively here (especially you Joe). if we had the maximum amount of shares of 960,000 the value as of closing price last night would still be £1.8m ($2.16m), while that doesn't represent the value we wanted currently, that's still £1.8m more than many including the market had attributed to the SGSC investment.
Looking more positively like Musk15 has said, once we have the shares lets sit and wait and hopefully watch the SP and subsequently our investment increase. You never know maybe CDT will release some news which will help further!
But first things first we need to exercise the Option when appropriate.
Yes, like i said yesterday once we exercise we have a definitive value to give to the SGSC investment which had bee previously valued at zero by the market
Generally speaking yes, you would expect to see an uplift in SP when someone has bought in higher but like we saw here when Laiker got rid of his shares for 0.4p our SP didn't react in an upwards trajectory!
I get that but with respect, if it was guaranteed shouldn't the SP be a lot higher?? In the meantime how do we pay for the retrospective trial and ongoing costs? Use the loan facility and have further dilution etc. These are all valid concerns which if CDT comes off takes those concerns away. All I'm saying is everyone dismissing the CDT investment are missing the point.
Agreed OAK. How long until we find out whether CIZ1B biomarker performs and what if it doesn't? Will we still need to ignore the fact that nearly £2m has been invested in CDT and offers no return? Very naive to ignore the fact CIZ don't have enough funding in the hope something comes off.
On the flip side if (hypothetically) CDT SP went up to $20 and doubled the money invested I'm sure slowlyslowly won't be saying it doesn't matter!
Yeah agreed, based on a very simple method of taking into account the closing prices of the last 10 days the average is less than $5, but as Dave has pointed out i don't think that is how it's calculated.
But if the average is below $5 there should be no delay in exercising the option to get the maximum amount of shares UNLESS the BoD know something we don't and our interest in AZ1656 is about to commercialise to an extent we get more than the potential £4m we agreed with CDT.
Thats right Volvie, a low SP in CDT isn't the end of the world. There is opportunity here like you say, lets exercise the option for the maximum shares we could possibly get of 960,000. Once exercised we will then have a value of this investment to attribute in our investment portfolio.
Obviously if the CDT SP continues this slide it won't be ideal but we have seen a lot of volatility in the SP.
Only problem is it would need our BoD to be paying attention if the SP heads higher for a short amount of time to sell some shares!
Looks like we should be exercising that option next week of the CDT sp remains so low. Highest volume day yesterday there yesterday as well. So with 960,000 shares it will be a waiting game for the SP to hopefully rise above $5.