RE: Tech10 Dec 2020 07:36
Let's look at some facts. Over the last 12 months David Levi has spent twice his gross wage on Ethernity shares. He has a substantial percentage interest in the company.
This is his life work, his pension, his personal fortune and no doubt that of his family. So how will he reward himself? Ethernity are heading for a substantial re-rate I think that now is obvious to all. How far it goes is anybodies guess but I believe that £5 a share on the crest of the wave is the bottom marker.
However I don't think that there will be any opportunity for David to sell. Full market disclosure in a fast moving, secretive sector may never happen. I conclude that beyond bonuses and performance payments dividends are the only way for David to realise true reward.
The first I speculate will be a small maiden dividend on interim 2022. Likely 1p a share it will attract dividend speculators as profit will escalate exponentially from 2021 onwards. The profit will be very predictable with recurring royalties and staged payments so they can release funds with confidence.
Ethernity are uniquely placed holding patents over concepts now crucial to economic future problem solving.
The head count will increase but nothing like the profit. Ethernity don't need people for this model. There won't be any huge production capacity investment. Margins are high on repeat products, up to 100%.
I conclude that dividends are a certain way to distribute wealth to those controlling the company. At the same time distributing wealth to shareholders.