A month ago, I said that if increased volume could be continued, we might see the share price rise to 5 cents over the coming couple of months. It's now hit 5 cents. I'm a bit surprised by that (that it happened so fast) and it is safe to say that it has continued to rise on low volume from it's lows of around the CR price of 2.4 cents only a few months ago. I suspect it will continue to bounce around a bit and we may see a bit of a pull back but as a result of the movements over the past month or so, I am more optimistic that the share price may increase further.
The market cap is currently about $5.2million. This includes rough cash in the bank of about $1 million. That means the market is estimating the value of the company and it's potential at about $4 million. I still think this is a bit low. I honestly believe a share price of closer to 8 cents at the moment would be a reasonable price for the company. There will obviously be a rerate the moment any sort of agreement is signed with a clothing manufacturer.
I think the the share price was always going to bounce of it's lows of about 2.4 cents after the CR because NC6 would have money in the bank and that was just too low a valuation. However, I think the CR (in particular the placement of the shortfall) introduced NC6 to a number of new investors who got told a good story and see how undervalued the company is at present and the potential it holds. That's why buyers have been picking up an extra $1-5k here and there. I am hopeful this will continue.
Regardless of what happens, I'm reasonably happy at the moment. I first bought NC6 at 12 cents. I thought commercialisation would happen much faster than it has and I was buying on the promise of the company. I've averaged down hard, and in fact, more than half of my shares I picked up at about 2.5 cents around the time of the CR, so my average is 4.43 cents now. That means I'm in the green for the first time, pretty much, since I first bought. It's a good feeling and I can now imagine what it will be like when the share price spikes once we get an agreement with a clothing manufacturer.
I wouldn't be surprised if the SP slowly increases over the coming months while this India lockdown thing gets sorted and the company moves towards agreements and larger-scale manufacture. It might not, but I wouldn't be surprised. I think given the potential of the company, anything under 8 cents is a pretty good deal, so there is plenty more room for people to snap up bargains in the foreseeable future. There are very few sellers, and off-screen sellers are pretty rare as well. I think the momentum is in our favour at the moment.
Despite the lockdown, I am hopeful of some sort of agreement being reached to supply free samples to a clothing manufacturer this year. We got a business update recently, that was pretty informative. With any luck, the quarterly due out this week will provide further information (at least about what we can expect over the coming 3-6 months.
The last quarterly said:
"Once lockdown restrictions are eased, the strategic focus will be on 1) working with Grasim Industries to ensure the fibre technology scales successfully 2) increasing supply of microbial cellulose to convert into commercial quantities of fibre 3) establishing agreements with clothing brands to purchase initial quantities of fibre."
As far as I'm aware, the lockdown restrictions are still in place, to a greater or lesser degree, in many parts of India. Despite progress being made recently, I think we are still beholden to the lockdown situation in India in terms of when agreements with clothing manufacturers are made. I think we might see Grasim gearing up despite substantial lockdown measures, as the Indians have previously been prepared to relax restrictions for factories. While terribly costly, the Indian economy will eventually need to open up a bit. They aren't as wealthy as places like Australia, and they can't sustain the strict lockdown indefinitely.
Fingers crossed we get progress soon while not unnecessarily risking people's lives.
*LOL while I was writing that, we dropped back to to 4.8 cents. Still in the green though, so winning!
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