General discussion, page-1907

I've just been looking at how some of the recent spinouts have performed after a demerger.

NiCo listed yesterday after being spun out of Metals X. The IPO price was 20c, it closed yesterday at 36c an 80% increase. As I write its 56c up 55% on yesterday's close, almost 3 times the IPO price.

Can we expect the same sort of returns out of Leo?

As I posted a while ago, considering it's only being offered to FFX shareholders, I think it'll be offered at a bigger discount than most other IPO's. So that would set us up for a good gain straight away.

It is amazing how often the market looks at a spin out in a different light to when it was part of the mother company. In NiCo's case, the assets are the same, the only thing that's changed is these assets are now in a separate company. It's almost like the spin out causes a reset, where the market has a fresh look at the assets and reassesses it's value.

I think the same thing will happen to Leo (and Firefinch for that matter). All of a sudden the market will see a new Lithium stock, a stock that is fully financed, has commenced building the project, and has 100% offtake. They'll then compare it's market cap to it's peers and bang - you get a rerate.

Sometimes the market is so dumb it doesn't see the forest for the trees until it's unscrambled, put in a separate shell, then all of a sudden the penny drops and the market sees the opportunity.

IMO after Leo lists, there'll be a big rerate and we'll start to see valuations closer to our peers. I fully expect the more astute investors to realise this and start accumulating as we get closer to the Record date.