RE: Disco19 Jan 2021 15:12
Good post Trends.
There’s a common misconception, that just because a share price and MCap are very low, that a company is ripe to be “taken out” with a lowball offer. This isn’t the case imo, particularly with companies in the O & G sector.
When a company like Chariot is targeted or approached as a takeover target, ALL assets will be taken into account when setting a value, irrespective of what the share price or MCap is, OR whether the “market” is valuing it correctly or not.
Assets such as licenses, 2/3D seismic data, risked and unrisked oil or gas ALL have a predetermined value within the industry and all of these have to be taken into account when making and offer, otherwise current owners will just laugh it out.
In Chariots current case, virtually NOTHING is priced into the MCap and this has been the case for several years (as we have been priced at cash in the bank until recently) imo. Just because the “market” has us valued at £33m, doesn’t mean an offer of £150m (just an example before anyone jumps on this) is out of the question when all the assets are valued correctly.
Even when Chariots share price rose to £3 back in the day, many (including myself) didn’t sell because it wasn’t valued correctly When compared to its peers and other companies with similar assets and at the same stage of development.
We are in a similar position now imo with almost every part of the business discounted to next to nothing. I appreciate there’s work to be done to monetise our assets but at the moment the market is either ignoring the asset value OR the potential, or both.
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