1. All banks, global or local, cover stocks large and small because they hope for investment banking fees. We are in an era where nobody pays for research anymore. It is why small caps are woefully covered . You are completely right, Citi is there because they hope to be the banker that brings them to NASDAQ or does a capital raise or factors LVT's receivables etc etc. But the way it works is that the global banks make bets on who they think are winners . For every company that a bulge bracket investment bank agrees to cover, they reject twenty. They are trying to allocate their time and resources to the companies that will grow into large companies generating lots of banking fees. Yes, in a way, the top tier global IBs are scum balls just there for the fees, but they are very selective scum balls staffed by smart people. The rejected companies go to tier 2 firms (still good). Most go to tier 3 firms and some end up with tier 5 bucket shops. I'm not a fan of Citi........but it is a data point that Citi think this grows into a large company.
2. All of our analysis is based on cash flow. Capitalizing R&D will not impact cash flow and will not affect our valuation of the company. See Para 1.2 of C4 asx announcements.
3. A better COA, allows a company to spend more on R&D. In tech world, this is a very good thing.
4. The company (LVT) is headquartered in New York. The CEO is based in New York. It is a global company with more than 80% of revenues from outside Australia and the US is the company's single largest market by far. NASDAQ valuations are higher, the capital markets are larger and a NASDAQ listing reinforces product credibility. In our humble opinion, a dual listing on NASDAQ would be a very good thing which would result in a higher stock price. It is however expensive to do (those damn investment bankers) and management seem to have higher priorities for cash
You mentioned listing requirements.The listing requirements for a NASDAQ Global listing are: 1. Market Value of listed securities $75 million or Equity of $30 million 2. 1.1 million publicly held shares. 3. Market value of publicly held shares $20 million 4.Number of shareholders : 400 5. Operating History of 2 years LVT meets all those criteria . The US is used to a share price in dollars rather than cents,(to avoid egregious spreads) so we have a minimum share price requirement of $4...thus the NASDAQ share would have to equate to 10 Australian shares (its called a reverse split and is very common). Then appoint 4 market makers (for a fee) and its done.
LVT Price at posting:
55.5¢ Sentiment: Buy Disclosure: Held
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