RE: Canadian Coverage4 May 2024 06:49
IBB_Invest - I don’t suppose the excellent question on Canadian Coverage came from you, did it? Regardless, you cheery picked his response and completely skipped over the comments made on why the coverage is as it is. As a reminder, the point you were making a month back was that peers had up to 10 investment banks covering them indicating that i3e’s Canadian marketing was deficient(IYO). You also went on to say that they only had 1 third rate analyst covering them in Canada.
No one is disputing that more buying in Canada would be a good thing. All Majid has said is that the question is valid. He’s hardly going to say it’s a stupid question. Majid explained why there was less coverage than peers which you conveniently skipped over and its all to do with money and how much these investment banks can make out of the Companies they cover. This is discussed further in i3e’s response to the SPECIFIC comments you originally made in quotes below:
“The Canaccord Genuity analyst covering i3e is not a third-rate analyst… Investment banks have their own criteria to consider when allocating their resources. One criteria is the amount of income they might receive from trading volumes in the stock and potential investment banking income generated from the relationship developed with the corporate entity. Small cap stocks like i3 Energy have more limited trading volumes and in i3 Energy’s case as circa 90% of its shareholding is UK based, the majority of its liquidity is on the AIM market ... It is especially true for small cap stocks that institutional shareholders typically appear on the register as part of an equity raising process because there is not enough liquidity to build significant positions in open market trading without materially moving the price. The equity raised by i3 Energy to fund its acquisitions in Canada was all raised in the London market in 2020 and 2021, when the North American equity market for small cap Canadian oil and gas stocks was extremely limited. I3 Energy has grown its Canadian shareholding over time from circa 3% to just over 10% and we expect it to continually to grow organically, particularly the retail element. A significant growth in the institutional shareholding percentage will take longer and will likely be associated with an equity raise in Canada, for which the Company has no plans at the moment.”
So, in short you have not been vindicated, you cherry picked the answer, ignored Majids specific comments on coverage or at least did not understand them and took the snippet you did quote out of context.
A question for you – if Majid was really saying that increased trading in Canada was key and that the way to do it was by increasing coverage – he would do it surely? He gave no indication of doing this other than lobbying Canadian National Bank and indeed went onto say that they hoped to add another UK analyst!!!!
When you’re ready to eat a bit of humble pie – let me know, i'll w
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