We've been tracking sideways pretty much since mid April, and I feel as though there is some angst (particularly for those longer term investors who would be in the red) as to LVT's share price direction following the upcoming 4C/external Covid and market related factors. As others have pointed out we are pretty undervalued at the moment, which presents some solid buying opportunity for the long-term (EV/ARR hovering slightly above 3ish at the moment) for those that believe in LVT growing and expanding their presence because at some point in time, the declining trend that we have pretty much been in since late 2019 (last cap raise) will turn around as the commentary used in previous updates begins to materialize.
I've captured below the Market cap of LVT since June-18, and taken the average market cap over this period as a benchmark (approx 255m) to calculate what the share price would look like if we hit this number based on the current number of shares on issue.
At the benchmark Market Cap, LVT's shareprice would sit around 0.275-0.28, of which we were very close to in Early June.
Despite the Q3 quarterly update re-iterating; 'LiveTiles has no requirement to raise further capital to fund operating cash burn' and the most recent announcement suggesting their has been; "a material reduction in underlying Q4 operating cash burn and an increase in the closing cash balance as at 30 June 2020', there has always been debate as to whether or not future cap raises would be needed. I don't believe they will need to, but I was curious to do some analysis as to "but what if they did raise capital again". What would the shareprice look like at the same benchmarked market cap as previously mentioned. My findings suggest, that the indicative share price for any alternative would still be greater than the currently undervalued price of 0.215.
| Cap Raise | Price | Shares on Issue | Market Cap |
|---|
| 1 | 50,000,000 | 0.27 | 952,023,903 | 254,908,744 |
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| 2 | 100,000,000 | 0.25 | 1,002,023,903 | 254,908,744 |
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| 3 | 150,000,000 | 0.24 | 1,052,023,903 | 254,908,744 |
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| 4 | 200,000,000 | 0.23 | 1,102,023,903 | 254,908,744 |
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Anyway, not the most inspiring stuff.. but i'll leave this here for those who are interested. Looking forward to looking back at this time and realizing how undervalued we currently are
| Quarterly Update | ARR | Organic ARR | Non-Organic ARR | Change in Organic ARR | Market Cap | ARR Multple |
|---|
| 1 | Jun-18 | 15,000,000 | 14,600,000 | 400,000 | 3,400,000 | 234,999,585 | 15.67 |
|---|
| 2 | Sep-18 | 18,600,000 | 18,200,000 | 400,000 | 3,600,000 | 307,809,773 | 16.55 |
|---|
| 3 | Dec-18 | 22,900,000 | 22,500,000 | 400,000 | 4,300,000 | 169,983,815 | 7.42 |
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| 4 | Mar-19 | 34,500,000 | 26,100,000 | 8,400,000 | 3,600,000 | 290,410,871 | 8.42 |
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| 5 | Jun-19 | 40,100,000 | 31,700,000 | 8,400,000 | 5,600,000 | 291,992,203 | 7.28 |
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| 6 | Sep-19 | 42,900,000 | 34,500,000 | 8,400,000 | 2,800,000 | 270,867,086 | 6.31 |
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| 7 | Dec-19 | 52,700,000 | 39,600,000 | 13,100,000 | 5,100,000 | 236,135,351 | 4.48 |
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| 8 | Mar-20 | 55,200,000 | 42,100,000 | 13,100,000 | 2,500,000 | 222,799,904 | 2.80 |
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| 9 | Jun-20 |
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(20min delay)