It is sad that SLX has become a plaything for traders that have no interest in the vision or exciting background to the stock.
Serious investors need to consider what the fair value of the stock before deciding to come on board.
This can be done with some simple calculations using assumptions you are comfortable with.
Examples shown below
I think the assumptions I have made are somewhat conservative.
Conservatism: 50% chance of commercial viability confirmation by 2028 seems conservative based on commentaries on the forum and by GLE. The alternative to success assumed in the calculation is also ultra conservative that there is also a 50% or 30% chance that the company has $1 price given remaining prospects. It should be noted that the discount rate only needs to account for the time value of money since risk is taken into account in the probability of success (implies discount rate should approximate return on 5 year government bonds).
If you don't like my scenarios you can play around with your own.
We need more serious investors.
|
Column 1 |
Column 2 |
Column 3 |
Column 4 |
| 0 |
|
Scenario A |
Scenario B |
Scenario B |
| 1 |
Estimated Share Price in 2028 with commercialisation confirmed [P28a] |
$10.00 |
$20.00 |
$7.00 |
| 2 |
Estimated Share Price in 2028 with without commercialisation [P28b] |
$1.00 |
$1.00 |
$1.00 |
| 3 |
Probability of commercial operation confirmation by 2028 [Prob] |
50% |
50% |
70% |
| 4 |
Expected fair value in 2028 [EFP28=P28a x Prob + P28b x (1-Prob)] |
$5.50 |
$10.50 |
$5.20 |
| 5 |
Discount Rate for time (not risk) [D] |
6% |
6% |
4% |
| 6 |
5 yr time discount [TD = 1/(1+D)^5] |
0.747 |
0.747 |
0.822 |
| 7 |
|
|
|
|
| 8 |
Todays Estimated Fair Price for SLX [FP22=TD x EFP28] |
$4.11 |
$7.85 |
$4.27 |
(20min delay)