What would happen if ANZ were to dump SLA into a good news announcement?
Say tomorrow SLA announced a Ropren price of $2500 per course, which on 120,000 courses would bring 300 million raw revenues.. 70% goes to Solagran so $210 million in revenues for FY08/09. Even if you assume only 50% of this makes it to NPAT, that's FY08/09 earnings of $105 million.
What is the market going to price this at? Even if ANZ were to place a sell order for 55 million at limit of 40c... how long would it take for the market to snap this up? At 40c, Solagran is valued, fully diluted, at around 80 million dollars. So that's like paying 80 million dollars to get back 105 million in only one year. Then there's the rest of the earnings streams, which will only increase. Just shows how ridiculous the current SP is.
I think the market, with solid figures, will not be held back by large selling. Given a short amount of time, I think SLA will overcome the ANZ overhang.
SLA Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
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