So when I got up early this morning, I was concerned by the market correction weve been warned about thanks to numerous mates on here & market speculators in the media. Then I got excited when I saw the notification bell for VR1 Announcement… which quickly turned into a what the when I read the fine print (for a CR).
Immediate thought was, Vection doesn’t need money, so maybe its needed for a substantial acquisition for a vendor that wants a bit of cash in addition to shares to join us. The also, weve had clarification from GO that there will be no CR’s needed. Was he lying to us, or has something changed ?
Further reading on here & thanks to @traderforever for sharing the details of the CR with us which if accurate is a raise of $15M dollars at 0.20. Also noted in that post was that included $3M selldown by a director.
This would’ve meant 75M additional shares had director not sold, but since he did (allegedly for now), at .20 = 15M units to get his $3M, so instead 60M added to the shares on issue which is now up to 1,093,000,000 (basically 1.1B units).
Why would a director sell some shares in this when it is really only just taking off ?
Then comes our knowledgeable friend @Bumpken to help make sense of it.
Not sure about you guys, due to recent gains made in VR1 I am feeling very pleased in my decision to invest here particularly this last month or 2. Weve had massive interest & numerous announcements demonstrating progress, contracts & income. That being said, If I had to pay the ATO tax on those unrealised gains (as they are paper profit only), then Im honestly buggered. I don’t have the cash today to pay that, so I would be forced to sell some shares on market.
Im not a director, so no one cares what I do if I sell, but had our director sold on market its never a good look. Had he dropped them into the bid to sell, then let us know later by way of announcement is an option, but going about it as part of a CR shows care in reducing dilution for all of us. When you think about it, per @Bumpken post, it makes sense that upon realising that the Italian tax system insists he pay tax on an unrealised gain he had little choice but to sell a few. Remember if it is GB / LB, then keep in mind they have the largest investment of anyone here & more reason for success than the rest of us combined. They still will own 348M units between them if they indeed sold $3M worth. Remember we have over 100 employees now, the wage bill of employees & that of the directors is relatively minimal comparable to others Ive seen on the ASX so even with their massive paper wealth, $3M is a lot of money to come up with particularly just for a tax bill.
IMO the need for cash to pay tax is a pretty understandable & plausible reason. Its likely when realising this, director approached the board & said, sorry guys but I need some cash to sort out the tax office. Which likely would’ve gone down about as well as it has on HC. In good news however, it comes at a time when market interest in this space is next level. Our share price the highest its ever been & people are knocking on the door to join us. Just 3 Weeks ago he would’ve needed sell double for the same result. Yes, I absolutely would’ve preferred much rather it be done in a few weeks / months, but I guess had little choice.
Trading of late has been different as brokers seem to have gotten involved on market. As result of theirs & retail buying, price has risen toward fair value faster than expected mostly due to the limited on market supply (even with 1.1B units on issue), there are only 5M for sale on ASX, daily churn around 20M. Someone just jumped the queue & now has 75M units. These 2 ways to look at this… If they sell them, were going backward no doubt, BUT there are other brokers who missed out on the CR, who still want to join in & will be there to help absorb them. On the other hand, if those shares don’t come to market, anyone else will have to pay up, so onward & upward we go. It takes money to make money. Anyone with vision knows how big this new Metaverse space is likely to become. I very much doubt they are here for pips. They are here to see their money double or triple & sooner the better, so who knows may even continue to buy on market to keep the momentum.
If we go back to I suspect lowest is previous ATH @ 0.24, x 1,093,000,000 = $262.3M m/cap
Never know, but if we stay as we are @ 0.275, x 1,093,000,000 = $300M m/cap
Just 1 persons opinion here, so please make up your own mind. Come tomorrow / Wednesday when the TH is lifted, remember it’s the exact same co as it was on Friday. Difference is yes we will have a few more shares on issue, but an extra $15M in the bank ready for whatever opportunity comes.
These guys have proven time & again they are so far ahead of the pack in their way of thinking, they’ve already driven down the road, now around the corner while the rest of us are still at the lights wondering where they went. Give them a chance to do their thing. Enjoy the ride in the mean time. Whether you genuinely think its only been pumped for a CR, or that due to FOMO its out of control, then absolutely buy / sell, whatever you think... either way make sure you remember to think about what you thought you knew before this news & if you have any other reason to think any different about the direction we are headed in the future with this tiny hurdle.
Its my expectation in just 12 months to 24 months time we will be more worried about our capital gains & how to offset them thinking what a genius move to acquire that next element in the Vection Suite was as a result of the CR in November 2021. All the best.
VR1 Price at posting:
27.5¢ Sentiment: Buy Disclosure: Held
(20min delay)