This might seem like a boring piece of document but for the ordinary punters out there, take note. This shouldn't materially change much now after just going through a cap raise.
Sidenote: Sorry to dumb it down again for the other insto on here and experienced investors... but we need to give more clarity for the mum and dad retail investors.
What a Google search will tell you: Number of shares x share price = market cap
This is correct calculation but wrong equation. It is the most basic thing that people trip over, when determining if a company is worth the investment.
The correct simplified mathematical equation: MC / issued shares = x
MC = market cap or pro forma enterprise value x = share price
As you can see, share price is not part of the equation. It is "x" which is the answer. Hence those who speak of "share price" but wrong context unknowingly letting others know how little they actually know.
What gets worked out whether a company is overvalued or undervalued is "MC". This is what every single investor pay huge amount of money and complete diligence to work out. To know this value is what gets the rich getting richer. What is the value of the company that the market should price it at and is it (market cap) currently overvalued or undervalued? At what price will it be in 3months time, 6months time, 12, 2yrs, etc?
Hence when AZL was being priced by the market at 1.4c/1.5c share price, it was wrong to look at the share price to calculate the market cap. The correct approach is to estimate the MC, say $150M enterprise value and calculate from there what the share price should be... hence at $50M market cap at the time, it was obvious it was undervalued and the share price was likely to increase x3. Sure enough it did.
Where are we now today? What is the correct MC, based on the economics the PFS will show us and at what pro forma enterprise value shall we give the company once first production drill is completed in January 2024 knowingly that the company now has a healthy 'going concern' post oversubscribed funding round?
Time will tell, as "confidence" or lack therefore needs to also be considered.
This post is a reminder that numbers does the talking. Don't ignore these official releases over hyped announcements.
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