Equity conversion, page-50

Luis, it is you who needs to look at Valuation 101. The prime valuation metric is earnings. Lynas' earnings have always been negative. Therefore you can't move to stage two which is to apply a P/E ratio, as there isn't an E. That's Valuation 101.

Valuing a company without earnings is all about assessing investor expectations, not what a bond holder keen to get out can get from a distressed company. Think about it from the other way around, if the company had earnings which justified an SP of $4 and Mt K had converted at $1.25 (the original CP), would that have dragged the SP down?

With nearly twice the shares on issue, a slight improvement to the loss by the reduction of the interest and one threat of bankruptcy out of the way even if only a slight one, the SP could be expected to settle around 3c - 3.5c IMO.

kitty, from the other thread, I only wish it had been my excellent commentary you were complimenting, but as I never said that the chances of converting the debt were poor you must have been looking at someone else's.

As for an ASX200 inclusion, the lowest MC is currently $455m, with 5.7bn shares it would need an SP of 8c to get there. Well within the bounds of the optimists.