Wellnex Life - general discussion, page-13

I really don't understand the optimism here and to be honest feel your better off selling now and waiting to see any positive momentum before buying back in - even if its at a price thats 30-50% higher.

I've kept my eye on this one from early days and at one stage intended to be a holder but can't imagine that eventuating now. But lets do a rough back of the envelope valuation - They purchased BSA for ~$5mil half scrip half cash so lets assume that represents fair value (having faith in the old CFO/new CEO's negotiations here), they raised just under $3mill, yes I'm rounding both of these up, feeling generous. So come to $8mil. I believe of the $11mil they received from the liquidation of the dryer project they have ~$4mil left (this has come out of my head from a prior glance at latest annual report). So on a approx. net tangible asset basis they have a valuation of $12mil. They have provided no forecasted projections of earnings only that they hope to be break even in the last quarter of next year so at this stage I don't believe it would be appropriate to apportion any valuation to a DCF calc.

Lets ignore that with the exception of Zack all senior management are still their from the good old days that saw over $80mil of wealth destruction (again based on the accum. equity write off in their last Annual report). I believe all this money was shareholder wealth/CR's as opposed to any loss by founders/exec management.

Lets provide the benefit of the doubt say they will be successful in turning this around and say I've made some mistakes and add a 50% premium - so company valuation comes to ~$18mil... well that's still half today's valuation of $38mil at 12.5c/share... So before I would even bother doing some real due diligence I would probably want to see it get to 5-6c/share... but then you want a reasonable discount to your proposed intrinsic value before buying so where do we land 3-4c/share?

I imagine I will cope a fair bit of abuse for posting this logic but would love for someone whose a current shareholder to reply with their own valuation model and how it leads them to continuing to hold/seeing any upside. Reading the recent posts the logic seems to be "I've lost 90% of my money so might as well leave the last 10% in" which lets be honest is pure emotion and stops you from putting that money into something with a better track record of results.

Look forward to the quality responses.