The SP will increase if somenoe wants to have a controlling interest or take over the company.
In the past the takeover price offered was $4.4 per share. There were 700 million shares on issue valuing AIO at 3 billion (700*4.4). However the buyers would have taken over the AIO debt of 6 billion.
After the recent sahre placements the company has received hard cash of $2.5 billion. Other things being constant AIO could be valued at 5.5 billion (3 billion as noted above plus 2.5 billion in new cash) by the same bidders.
AIO now has 2.8 billion shares and at today's price of 1.6 the company is valued at $4.5 billion. To reach a market cap of $5.5 billion each AIO share needs to be valued at $1.9.
Please also note that the low and rjected $4.4 bid was received not during the boom when the SP was over $10, but after the GFC had just started and there were some debt concerns.
Today AIO is in no danger of liquidaion, has monopolistic assets and good management as far as running profitable operations are concerned (although they were financial market illetertes until they learnt their lesson).
AIO is winning huge new contracts each month and their investments in new systems, technologies, logistics and innovations will increase efficiencies and revenues.
During the next S&P rebalance AIO will move in the ASX 100 and then institutions will need to increase their stakes.
If there are no unforseen events or a recurrence of the GFC, I see $2 being wiped out soon. AIO should not entertain any bids below $3.
Good luck. I have made over $25k on AIO but unfortunately I lost all of it on GDN in hope of them striking gas and becoming a millionare.
I hold KAR which will touch $100 by the year end and BLY which next week will prove to be another AIO type slow but sure winner.
AIO Price at posting:
$1.60 Sentiment: Buy Disclosure: Held
